- DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

[Senate Hearing 107-233]
[From the U.S. Government Publishing Office]

S. Hrg. 107-233, Pt. 1 deg.

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

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HEARINGS

before a

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

H.R. 3338

AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 2002, AND FOR OTHER PURPOSES

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PART 1 (Pages 1-650)

Department of Defense
Nondepartmental witnesses

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Printed for the use of the Committee on Appropriations

Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate

_____

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COMMITTEE ON APPROPRIATIONS \1\

TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama HARRY REID, Nevada
JUDD GREGG, New Hampshire HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio TIM JOHNSON, South Dakota
MARY L. LANDRIEU, Louisiana
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
James H. English, Minority Staff Director
------

Subcommittee on Defense

TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi DANIEL K. INOUYE, Hawaii
ARLEN SPECTER, Pennsylvania ERNEST F. HOLLINGS, South Carolina
PETE V. DOMENICI, New Mexico ROBERT C. BYRD, West Virginia
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama BYRON L. DORGAN, North Dakota
JUDD GREGG, New Hampshire RICHARD J. DURBIN, Illinois
KAY BAILEY HUTCHISON, Texas HARRY REID, Nevada
MARY L. LANDRIEU, Louisiana

Professional Staff

Steven J. Cortese
Sid Ashworth
Susan Hogan
Gary Reese
John J. Young
Tom Hawkins
Kraig Siracuse
Robert J. Henke
Mazie R. Mattson
Charles J. Houy (Minority)
David Morrison (Minority)

Administrative Support

Alycia Farrell

\1\ Committee and subcommittee memberships--January 25 to June 6,
2001.

Note.--From January 3 to January 20, 2001 the Democrats held the
majority, thanks to the deciding vote of outgoing Democratic Vice
President Al Gore. Senator Thomas A. Daschle became majority leader at
that time. Starting January 20, 2001, the incoming Republican Vice
President Richard Cheney held the deciding vote, giving the majority to
the Republicans. Senator Trent Lott resumed his position as majority
leader. On May 24, 2001, Senator James Jeffords of Vermont announced
his switch from Republican to Independent status, effective June 6,
2001. Jeffords announced that he would caucus with the Democrats,
changing control of the evenly divided Senate from the Republicans to
the Democrats. Senator Thomas A. Daschle became majority leader once
again on June 6, 2001.

COMMITTEE ON APPROPRIATIONS \2\

TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama HARRY REID, Nevada
JUDD GREGG, New Hampshire HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
JON KYL, Arizona
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
Terry Sauvain, Minority Staff Director
------

Subcommittee on Defense

TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi DANIEL K. INOUYE, Hawaii
ARLEN SPECTER, Pennsylvania ERNEST F. HOLLINGS, South Carolina
PETE V. DOMENICI, New Mexico ROBERT C. BYRD, West Virginia
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky FRANK R. LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama TOM HARKIN, Iowa
JUDD GREGG, New Hampshire BYRON L. DORGAN, North Dakota
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois

Professional Staff

Steven J. Cortese
Sid Ashworth
Susan Hogan
Gary Reese
John J. Young
Tom Hawkins
Kraig Siracuse
Robert J. Henke
Mazie R. Mattson
Charles J. Houy (Minority)
Sonia King (Minority)

Administrative Support

Candice Rogers

\2\ Committee and subcommittee memberships--June 6, 2001 to July
10, 2001.

COMMITTEE ON APPROPRIATIONS \3\

ROBERT C. BYRD, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico
BARBARA A. MIKULSKI, Maryland CHRISTOPHER S. BOND, Missouri
HARRY REID, Nevada MITCH McCONNELL, Kentucky
HERB KOHL, Wisconsin CONRAD BURNS, Montana
PATTY MURRAY, Washington RICHARD C. SHELBY, Alabama
BYRON L. DORGAN, North Dakota JUDD GREGG, New Hampshire
DIANNE FEINSTEIN, California ROBERT F. BENNETT, Utah
RICHARD J. DURBIN, Illinois BEN NIGHTHORSE CAMPBELL, Colorado
TIM JOHNSON, South Dakota LARRY CRAIG, Idaho
MARY L. LANDRIEU, Louisiana KAY BAILEY HUTCHISON, Texas
JACK REED, Rhode Island MIKE DeWINE, Ohio
Terry Sauvain, Staff Director
Charles Kieffer, Deputy Staff Director
Steven J. Cortese, Minority Staff Director
------

Subcommittee on Defense

DANIEL K. INOUYE, Hawaii, Chairman
ERNEST F. HOLLINGS, South Carolina TED STEVENS, Alaska
ROBERT C. BYRD, West Virginia THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania
TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico
BYRON L. DORGAN, North Dakota CHRISTOPHER S. BOND, Missouri
RICHARD J. DURBIN, Illinois MITCH McCONNELL, Kentucky
HARRY REID, Nevada RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California JUDD GREGG, New Hampshire
HERB KOHL, Wisconsin KAY BAILEY HUTCHISON, Texas

Professional Staff

Charles J. Houy
Susan Hogan
Gary Reese
Tom Hawkins
Robert J. Henke
David Morrison
Lesley Kalan
Mazie R. Mattson
Steven J. Cortese (Minority)
Sid Ashworth (Minority)
Kraig Siracuse (Minority)

Administrative Support

Alycia Farrell (Minority)

\3\ Committee and subcommittee memberships--July 10, 2001.

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Wednesday, February 28, 2001

Page

Department of Defense: Defense health programs................... 1

Wednesday, March 21, 2001

Department of Defense: North Atlantic Treaty Organization issues. 345

Wednesday, March 28, 2001

Department of Defense: U.S. Pacific Command...................... 399

Wednesday, April 25, 2001

Department of Defense: Chemical Demilitarization Program......... 443
Nondepartmental witnesses........................................ 487

Wednesday, May 9, 2001

Department of Defense:
Reserves..................................................... 523
National Guard Bureaus....................................... 567

Wednesday, May 23, 2001

Nondepartmental witnesses........................................ 701

Wednesday, June 6, 2001

Department of Defense: Department of the Air Force............... 867

Wednesday, June 13, 2001

Department of Defense: Department of the Army.................... 911

Wednesday, June 20, 2001

Department of Defense: Department of the Navy.................... 959

Wednesday, September 5, 2001

Department of Defense: Office of the Secretary of Defense........ 1015

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

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WEDNESDAY, FEBRUARY 28, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
Present: Senators Stevens, Domenici, Hutchison, and Inouye.

DEPARTMENT OF DEFENSE

Defense Health Programs

STATEMENTS OF:
VICE ADMIRAL RICHARD A. NELSON, SURGEON GENERAL, MEDICAL CORPS,
U.S. NAVY
LIEUTENANT GENERAL PAUL K. CARLTON, SURGEON GENERAL, U.S. AIR
FORCE
LIEUTENANT GENERAL JAMES B. PEAKE, SURGEON GENERAL, U.S. ARMY

opening statement of senator ted stevens

Senator Stevens. Let me welcome all of you to our first
subcommittee hearing for this 107th Congress. I am delighted to
see the turnout, and nice to see everybody here ahead of time.
We meet to review the Department of Defense (DOD) medical
program and the Defense Health Program, or DHP. In just 1
year's time, we have seen tremendous changes in the DOD medical
program. Congress has fulfilled the commitment to our military
retirees to provide a lifetime of care. This benefit is now
authorized, established, and clear, and we must now find a way
to implement it and to pay for it and to be sure it happens as
promised.
In a year's time, the challenges facing the Defense Health
Program have only grown. In particular, the fiscal challenge
seems to change day by day, and always in increasing amount.
Senator Inouye and I and all the members of the subcommittee
put great value in military medicine. We honor and will fulfil
the commitments that have been made to our service members,
their families, and to our veterans and our retirees.
We will first hear from the service surgeons general of the
armed forces. This committee puts great stock, gentlemen, in
your views and your professionalism because you are charged to
make DOD's medical programs work, and we thank you for what you
do. As a matter of fact, each of us are beneficiaries of your
system.
Just last night we heard the broad outlines of what
President Bush is preparing for his fiscal year 2002 budget. We
are not going to press you today on the details of that budget.
We will receive those details on April 3rd. What we seek from
you today is your professional assessment of the current
challenges facing the Defense Health Program and your forecast
of changes for the next year.
Gentlemen, we always appreciate full and frank discussion
and we will look forward to sharing views with you today. We
will do our best to work with you, as we have always.
General Paul Carlton, we welcome you back, General. General
Jim Peake, congratulations on your promotion. We welcome you
here today. You have a most impressive background, General. We
are very eager to work closely with you. Admiral Dick Nelson, I
regret to be informed this is the last time you will testify
before this committee. You have been refreshingly candid and
open with us, Admiral.
Admiral Nelson. Thank you, sir.
Senator Stevens. We appreciate that. We commend you for
your service, your 34 years of distinguished service to our
country, and wish you and your wife Alice the very best. A
young man like you should not think about retiring.
Before we go to your statements, Senator Inouye, you have a
statement?

STATEMENT OF SENATOR DANIEL K. INOUYE

Senator Inouye. Mr. Chairman, I thank you very much. I wish
to associate myself with your remarks. I would like to thank
the Admiral for his service to his Nation. I wish you the very
best in the future.
General Peake, as I told you, the combat badge impresses
me. Did you know that he has a combat badge?
Senator Stevens. Yes.
Senator Inouye. General Carlton, we are always happy to
have you here with us.
General Carlton. Thank you, sir.
Senator Inouye. Mr. Chairman, my statement is a rather
lengthy one. I would like to have it made part of the record.
However, I believe that all of us here should note that this is
the first Defense Subcommittee hearing of the year and
understand this was done deliberately.
We could have had the Chiefs of Staff for the Air Force,
the Army, or the Navy or the Secretary of Defense, but we
decided to have you people first. This is because if the
quality of life of our men and women in the service are not
what they think is appropriate, then we are going to have a
terrible time meeting the requirements of our military family.
So we wanted all of you to realize that this subcommittee
considers your activities to be of utmost importance to our
Nation's security. Senator Stevens and I are not as young as
the three of you sitting there (Surgeon Generals of the Army,
Navy and Air Force). We have been around for a little while. We
were in World War Two, when all three of you were youngsters.
At that time, in my regiment only 4 percent of my men had
dependents. The men were all young. Patients in military
hospitals at that time looked like what the military was mainly
composed of, men.
Today we find that there are more gynecologists than
orthopedic surgeons, more pediatricians than anesthesiologists.
This is the way it should be because, as you know, today the
ratio of active duty to family members is a bit different. In
the Army 75 percent of the troops have dependents, the same is
true for the Air Force and the Navy. If we do not maintain the
high quality of life that you have been providing, we will have
trouble maintaining an adequate military force.
Oftentimes in discussing the security of this Nation, we
only seem to concern ourselves with things like B-2s, F-22s,
and cruisers. But when we come down to it, it is not the guns,
it is not the bombs; it is what you do that maintains our
security at the level that we should have it.
So, gentlemen, I join my chairman in welcoming you. I
assure you that we are looking forward to working with you.
Thank you, Mr. Chairman.
[The statement follows:]

PREPARED STATEMENT OF SENATOR DANIEL K. INOUYE

Good morning. I join the Chairman in welcoming General
Peake, General Carleton, and Admiral Nelson to discuss Military
Medical Programs. I would like to take this opportunity to
acknowledge Vice Admiral Nelson who is making his final
appearance before this Committee as Surgeon General of the
Navy. I thank Admiral Nelson and congratulate him, for his long
service to the Navy and the nation, and his assistance to this
committee. I wish him much success in his future endeavors.
I would like to extend a special welcome to General Peake
who is appearing before this Committee for the first time as
the Surgeon General of the Army.
I hope General Peake finds this hearing to be a worthwhile
experience, and that it will be the first of many fruitful
discussions.
The last session of Congress focused on many health care
issues including medical errors, patient safety, and for the
military health care system, the National Defense Authorization
Act, which authorized TRICARE to cover not only active duty
service members and their family members, but to expand its
coverage to include military retirees and their family members
and survivors.
Service members on active duty are concerned about access
to health care services for their family members. We must
ensure that the men and women who have committed to a career of
service to our nation, both present and past, have a health
care benefit worthy of their sacrifice. In order to provide
this key quality of life service to our newly-expanded
population, we must enable all members of the Military Health
Service System team to contribute fully to meeting this new and
greater demand for health care based on the professional
abilities of each team member.
Historically it has been the Military Health System that
has established successful new paradigms for health care, and
we must continue this proud tradition. The Military Health
System provides a far superior quality of life for our service
members and their families, but we must never forget to build
on our past successes to meet present and future challenges
successfully .
Continuing fiscal restraints require us to make the best
use of our resources while maintaining quality. I am
particularly pleased with the continued advancements made in
telemedicine and other medical technology, I commend the
Department Of Defense for being a leader of this innovative
modern technology.
Today, as we address many of the issues facing our military
health system, I would like to focus on beneficiary access to
military health care services, retention of Military Health
System personnel, implementation of the expanded TRICARE
benefit plan, and new technology initiatives. I look forward to
hearing your testimony.

Senator Stevens. Senator Hutchison, Senator Domenici, do
you have any comments to make at the beginning of the hearing?

STATEMENT OF SENATOR KAY BAILEY HUTCHISON

Senator Hutchison. Yes, Mr. Chairman. Before I get to my
line of questions, I would like to say a couple of things.
First of all, thank you very much. Clearly you are one of
the priorities that Congress is making for our military
personnel. As we upgrade quality of life, health care along
with housing and pay are the linchpins of that commitment that
we are making.
I am introducing a bill today that will extend the period
under which victims of the Gulf War syndrome will be able to
receive treatment and be able to, hopefully, get coverage. I am
very disappointed that we have not gone nearly as far as I
think we should to find the cause of the Gulf War syndrome, and
I think that we are on the cusp of finding that cause and I
hope that you will be committed at the Department of Defense to
helping us get the momentum to support the research that seems
to have some hope of finding the cause of Gulf War syndrome.
This is the tenth anniversary of the end of the Gulf War
and one in seven of our veterans have symptoms, some of which
are unexplained, but all of which occurred following service
and those symptoms were not present before the individual left
to go serve our country. I do not ever want it to be said that
we did not do everything possible to support those who have
served our country when they have ailments that they did not
have when they left.
Last but not least, obviously we are on a program now of
TRICARE for Life and improving TRICARE. I think that it was
right that we kept the commitment to veterans finally that they
would have health care for life. But we are going to be faced
with the appropriations issues, because there are shortfalls in
the funding that we now have if we are going to keep that
commitment.
But we are going to keep the commitment and we will find
the money and we just need you to implement that commitment
that we will have quality health care for life for our retirees
and the veterans who are entitled to it and those who are
active duty personnel.
I thank you, and I hope I am here for the questioning
round, but in case I am not I wanted to make those points.
Thank you.
Senator Stevens. Senator Domenici.

STATEMENT OF SENATOR PETE V. DOMENICI

Senator Domenici. Mr. Chairman thank you very much. I think
it is very important that these hearings occur early and, with
your permission, I would like to just make a little statement
that analyzes the shortfalls in the Defense Health Program that
have occurred. I think the big problem we have in funding our
commitments in the area of health is that the Defense
Department, for better or for worse, has underestimated the
inflationary add-on for these programs. They do it
consistently, and it is always extremely low.
We have a 5 year period of time when they estimated
inflation at 1.2 percent inflation and the actual inflation
rate was 4.8 percent. Now, frankly, with all the work that the
chairman and the ranking member do to put the right amount of
money in the appropriation bill, I do not think it is fair to
ask them to second guess you on the inflation rate and say,
well, we are funding everything, but we do not believe your
inflation rate.
I think the Department has to get on the ball and put an
inflation rate in that is realistic. In institutions of health
delivery, the cost is going up, perhaps as fast as in United
States generally.
I have a statement which details that this is underfunded.
Mr. Chairman, I think one of the best things you could do with
the ranking member is to insist and encourage the Department to
put the right number in. The Department puts the wrong number
in because they do not estimate the inflation in at a high
enough level. We fund it at the requested level, and then we
all get in a trap around here because we have to have a
supplemental to ultimately pay for it. Then, the appropriators
are asked, why are you having the supplemental?
Well, indeed, Mr. Chairman, we are going to have to have a
supplemental this year. You and I know that. The newest item is
that we are going to have to add $1.2 billion, and maybe $1.4
billion, as the shortfall for the health programs in this
Department. If you all would like to check that, that is a
question we would submit for the record. We think the 2001
shortfall is $1.2 billion, but it may be as high as $1.4
billion.
I think you should tell us whether that number is right. I
am going to go asking for the supplemental amount because I
think we ought to not leave these programs hanging without the
money behind them. That causes some grief. Sometimes it causes
delay, and in all cases it causes the health delivery system to
put their payment plan, hold it in abeyance until the money
comes.
So, Mr. Chairman, would you put my statement in the record
which details this. I have introduced a measure here; it is S.
395, and I want to call to everyone's attention to the $1.2
billion. When you do your supplemental I am sure you are going
to include this because it is a shortfall for the year we are
in over and above what you have appropriated, not because of
you and the ranking member, but because the inflation rate was
underestimated.
[The statement follows:]

PREPARED STATEMENT OF SENATOR PETE V. DOMENICI

Since 1994, budgets for the Defense Health Program have been
submitted to Congress without requesting enough spending to cover all
known medical and health care expenses.
DOD has been projecting an average annual inflation rate of 1.8
percent in the Defense Health Program, but the actual average rate for
the past five years is 4.9 percent. Just last year, DOD predicted 2.1
percent inflation for the Defense Health Program in 2001; experts are
predicting the rate to be 7.9 percent.
This has resulted in expenses being incurred but no funds to pay
the bills. Chairman Stevens has led Congress by funding these gaps with
additional spending, often in emergency supplemental appropriations
bills.
But the delays from inadequate budget requests means healthcare
providers do not know if or when they will receive full funding. As a
result, appointments for healthcare can be complicated, and the
services rendered can be delayed or degraded. A system that many
already find troublesome can become exasperating.
This problem affects an active beneficiary population of almost six
million, including 1.5 million active duty servicemen and women, 1
million retirees, and 3.3 family dependents.
President Bush has already pledged that he will fully fund Tricare
costs in 2002 at an estimated $3.9 billion, but it is not yet known if
he and Secretary Rumsfeld know about or have addressed remaining
funding gaps in the rest of the Defense Health Program.
The appropriations legislation introduced on Monday provides an
``urgent'' (not emergency) supplemental appropriation of $1.2 billion
for the Defense Health Program for 2001.
I also am making four specific recommendations for the Defense

Health Program for the 2002 congressional budget resolution:
--Sufficient budget authority and outlays to enable the enactment of
the 2001 appropriations legislation.
--An additional $1.4 billion in fiscal year 2002 to accommodate
actual inflation in DOD health care, rather than the
unrealistic under-estimate left by the officials of the
outgoing Administration.
--To accommodate future inflation, the budget resolution will also
provide the needed budget authority and outlays to accommodate
5 percent inflation for the next ten years for a total of
almost $18 billion.
--The Congressional Budget Office has not included additional
discretionary spending in its ``baseline'' for the ``Tricare
for Life'' program. The technical reasons for this are
esoteric, but the money is substantial--$9.8 billion over ten
years.
It is unacceptable to make health care promises but not to include
in the budget the money required to make good on them. The steps being
taken here will make Congress' word good.

SUPPLEMENTAL

Senator Stevens. Thank you very much, Senator. I do note
your introduction of the bill to authorize that amount and to
request it and I appreciate that.
In fiscal year 2000 our subcommittee added $1.3 billion,
$1.311 billion in supplemental. We are in sort of a cycle where
many of the medical costs come in supplementals. Senator Inouye
and I do not like that, either. We have to get to the point
where these moneys are put into a regular bill and we do not
face supplementals for health care costs, because it is very
hard to plan for expenditures in the beginning if they do not
come about until some time in July. With one-quarter of the
year left, they are not much good to the military.
Admiral Nelson, we are glad to have you here. We welcome
you for your last appearance. We would be pleased to have your
statement, sir.
Admiral Nelson. Thank you. Mr. Chairman, Senator Inouye,
distinguished members: First, I would like to thank you, and
thank the Congress, for the health benefit contents to the
National Defense Authorization Act of 2001. I think the
importance and the significance of it to our military
beneficiaries, the active duty, family members, as well as our
retirees who have reached age 65 and over, is extremely
important to the future of our military. So I thank you for
that.

COMPENSATION

I look forward to the full resourcing of the new benefits,
so that we can implement them.
My written testimony addresses many of Navy medicine's
accomplishments of the past year and I will not dwell on that
here today. But rather, there are two areas of concern to me
that I would like to discuss briefly with you. The first one
deals with our medical providers, both in their provider
satisfaction and also retention. During my years as commander
of a medical center and then these last almost 3 years as
surgeon general, I have become increasingly concerned about the
issues surrounding retention of our critical health care
specialists.
Last year, last spring, I asked the Center for Naval
Analysis (CNA) to do a study for us on that subject. I got the
results of that study, in December. Also last year, the three
surgeons general, in recognizing the same problem, asked the
Assistant Secretary for Health Affairs to initiate a flag
officer review board to review special pays for providers. That
board has not completed its work yet, I do not believe, but I
have looked at CNA, the single most significant issue dealing
with our provider's satisfaction today is the compensation. It
has been 10 years since a review was done of the compensation
package.
The impact that I am seeing in the Navy is a loss of
critical wartime specialties. The pipeline it takes to build a
surgeon or an orthopedist is 10 to 12 years.
Senator Stevens. You are talking about in uniformed
personnel, not contract personnel?
Admiral Nelson. Yes, sir, I am. I am talking uniformed
people in our direct care system, operating in our hospitals
and clinics.
I am concerned that, and the three of us were concerned
enough to ask for a review of retention and compensation. I am
hopeful that this year we will be able to bring forward some
initiative for action which will impact positively on
retention.
Senator Stevens. What is going to be the timing on that,
Admiral, do you know?
Admiral Nelson. I do not know that, sir. That rests with
the Department of Defense, Health Affairs.
Senator Stevens. We will raise it with them, and tell them
to be prepared to tell us. I think you are right. I agree with
you on that.
When was the last time those were adjusted, Admiral?
Admiral Nelson. 1991, sir. There has been--the study that
CNA did for us indicated that there had been up to a 24 percent
further gap in pay for like physicians.
Senator Stevens. Have you got any statistics about the
reenlistment rates and the attrition because of the loss of
adjustment in those salaries?
Admiral Nelson. Yes, sir. Yes, sir, I do. I have it for all
specialties in the Navy. There is a study going on now, at the
request of Congress, to look at all three services. I think
that is about complete, and we can provide that for the record
if you would like.
Senator Stevens. I would like to see that as soon as it is
ready.
Admiral Nelson. I can provide you the Navy study
immediately, yes, sir.
[The information follows:]

STABLE FUNDING

Admiral Nelson. The second area of concern to me and it is
one I raised last year. That is the need for stable,
predictable, and sufficient funding for the direct care system.
It is necessary for the three medical departments to run our
hospitals and our clinics, to make them the most efficient that
they can be.
Our military health system optimization plan emphasizes
maximum use of the direct care system for hospitals and
clinics, but adequate business planning and implementation of
that requires dependable resources throughout the year. I think
we have a responsibility, just as Senator Domenici said, we
have a responsibility to bring you an honest health care budget
request, one that recognizes the true costs of quality health
care.
We as services cannot thrive on the year-end emergency
supplementals. The year-end supplementals do not allow us
investment in the future. It allows us to take care of
immediate things, but not really invest for the future. We have
to get past the supplementals.

PREPARED STATEMENT

We are committed to working with this committee, to working
with the Congress, to improve military health care. I
appreciate the support that this committee has been over the
years that I have been surgeon general and I thank you very
much for that.
Thank you, sir.
[The statement follows:]

PREPARED STATEMENT OF VICE ADMIRAL RICHARD A. NELSON

Chairman Stevens, Senator Inouye and distinguished Senators, thank
you for the opportunity to review Navy Medicine's accomplishments in
2000 and plans for the future.
This has been a challenging and rewarding year for the Navy Medical
Department. We have successfully responded to many challenges placed
before us. We continue to face a period of unprecedented change for
medicine. Our health system must remain flexible as we incorporate new
technologies and advances in medical practice, struggle to maintain our
facilities, optimize our health care delivery, embrace new health
benefits, enhance patient safety, and increase our ability to provide
care to beneficiaries over age 65 in the coming months. Navy Medicine
has been working tirelessly to maintain our superior health services in
order to keep our service members healthy and fit and ready to deploy
while providing a high quality health benefit to all our beneficiaries.
As you know, healthcare is an especially important benefit to service
members, retirees and family members. It is an important recruitment
and retention tool. For active duty members and their families it's one
of the key quality of life factors affecting both morale and retention.
Additionally, the benefits afforded to retirees are viewed by all as an
indicator of the extent to which we honor our commitments. The expanded
health care benefits in last year's National Defense Authorization Act
were most welcomed by all our beneficiaries and will help restore the
faith of our retirees in Military Health Care. However, we must also
ensure the provisions are delivered and that sufficient resources are
available now and in the future to avoid making a commitment we can't
afford to keep.

Global Force Health Protection
The year 2000 has seen Navy Medical Department personnel assigned
to Navy and Marine Corps forces world wide, many of whom are deployed
with our underway ships or in forward areas. This year, thousands of
Navy medical personnel supported joint service, Marine Corps, and Navy
operations and training exercises.
Our medical personnel have provided humanitarian relief to many
countries around the globe. During periods of social unrest, Navy
medical personnel provided environmental and preventive medical
assistance in Guatemala, Columbia, Peru and Micronesia. In support of
our national strategy to assist governments pursuing democracy and
independence, our medical personnel assisted in Russia, East Timor,
Indonesia, Samoa, and Mozambique, coordinating humanitarian relief,
epidemiology, preventive medicine, dentistry, and ophthalmology
support. Despite the challenges of working in austere environments,
these deployments have provided a valuable opportunity to hone our
medical skills and test our readiness while providing relief to people
in need.
During the tragic events of recent military and commercial airline
crashes, Navy medicine quickly mobilized Special Psychiatric Rapid
Intervention Teams (SPRINT) to assist servicemen, families and
civilians through their grieving process. Most recently, a SPRINT team
deployed to assist the 318 uninjured crewmembers of USS COLE after the
recent terrorist attack in Yemen. In addition, a task-organized Fleet
Surgical Team deployed to augment the medical capability in theater in
support of the forces still operating in the high threat environment.
As we move into this new millennium, our Navy and Marine Corps men
and women are called upon to respond to a greater variety of challenges
worldwide. This means the readiness of our personnel is now more
important than ever. Military readiness is directly impacted by Navy
Medicine's ability to provide health protection and critical care to
our Navy and Marine Corps forces, which are the front line protectors
of our democracy. That's what military medicine is all about--keeping
our forces fit to fight.
I am also pleased to report that we recently implemented a new
Reserve Utilization Plan (RUP) that will optimize our use of reservists
during peacetime and contingencies. The Medical RUP is Navy Medicine's
plan for achieving full integration of Medical Reserves into the Navy
Medical Department. Prior to the Total Force Policy, the Medical
Reserves were considered a ``Force in Reserve,'' to be called upon
during national emergency.

Taking Care of the Fleet
Under our theme of ``Force Health Protection,'' we will place
special emphasis on keeping Sailors and Marines healthy and fit and
ensuring our deployable platforms are ready to deliver effective
casualty care--Manage Health Not Just Illness. The Force Commander
Health Promotion Unit Award (which we call the Green ``H'') is used to
measure one aspect of Fleet medical readiness. It enhances the health,
fitness and mental well being of our Sailors through their involvement
and participation in unit health promotion initiatives. This award is a
tangible, visible measure of the operational force's progress toward
prevention and population health, since those commanding officers who
earn the Green ``H'' are authorized to paint it on their ship's
superstructure.
This year, more than 130 ships or units have earned the right to
paint the Green ``H'' on their bridge wings, reflecting decreases in
alcohol related events and tobacco use rates, as well as increased
physical readiness test scores.

Readiness
Navy Medicine tracks and evaluates overall medical readiness using
the readiness of the platforms as well as the readiness of individual
personnel assigned to those platforms. The platforms include the two
one thousand bed hospital ships, 6 Active duty and 4 Reserve 500 Bed
Fleet hospitals, as well as medical units supporting Casualty Receiving
and Treatment Ships (CRTS), units assigned to augment Marine Corps, and
overseas hospitals. One of our measures of readiness is whether we have
personnel with the appropriate specialty assigned to the proper
billets; that is, do we have surgeons assigned to surgeon billets and
Operating Room Nurses assigned to Operating Room Nurse billets, etc.
The readiness of a platform also involves issues relating to
equipment, supplies and unit training. Currently these are tracked
separately. Navy Medicine is developing a metric to measure the
readiness of platforms using the Status of Resources and Training
System (SORTS) concept tailored specifically to measure specific
medical capabilities such as surgical care or humanitarian services.
Navy Medicine also monitors the deployment readiness of individual
personnel within the Navy Medical Department. Personnel are required to
be administratively ready and must meet individual training
requirements such as shipboard fire fighting, fleet hospital
orientation, etc. The compliance of individual personnel is tracked
through a database called Standard Personnel Management System (SPMS)
and reported to Headquarters.

Our People
People are critical to accomplishing Navy Medicine's mission and
one of the major goals from Navy Medicine's strategic plan is to
enhance job satisfaction. We believe that retention is as important if
not more so than recruiting, and in an effort to help retain our best
people, there has been a lot of progress. Under our strategic plan's
``People'' theme, we will focus on retaining and attracting talented
and motivated personnel and move to ensure our training is aligned with
the Navy's mission and optimization of health. Their professional needs
must be satisfied for Navy Medicine to be aligned and competitive.
Their work environment must be challenging and supportive, providing
clear objectives and valuing the contributions of all.
All Navy Medicine personnel serving with the Marine Corps face
unique personal and professional challenges. Not only must they master
the art and science of a demanding style of warfare, but they must also
learn the skills of an entirely separate branch of the armed services.
Whether assigned to a Marine Division, a Force Service Support Group,
or a Marine Air Wing, Navy medical personnel must know how Marines
fight, the weapons they use, and the techniques used to employ them
effectively against harsh resistance. To excel in this endeavor is an
accomplishment that should be recognized on a level with other Navy
warfare communities.
Recently, Navy leadership approved a new program allowing Hospital
Corpsmen and Dental Technicians, as well as other ratings assigned to
the Fleet Marine Force, to qualify for a Fleet Marine Force warfare
pin. This designation and associated warfare pin is an outward
recognition of the important role our corpsmen and dental techs play in
this unique duty. It will be a positive motivator for current and
future HMs and DTs supporting the Marines in the field.
Finally, as we work to meet the challenges of providing quality
health care, while simultaneously improving access to care and
implementing optimization, we have not forgotten the foundation of our
health care--our providers. We appreciate and value our providers'
irreplaceable role in achieving our vision of ``superior readiness
through excellence in health services.''
Within each of our medical facilities there has been an overall
initiative to reward clinical excellence and productivity and to ensure
that those who are contributing the most are receiving the recognition
they deserve. Additionally, selection board precepts now emphasize
clinical performance in the definition of those best and fully
qualified for promotion.

Medical Corps
This past year, the three Surgeons General asked a Flag Officer
Review Board to review special pays and propose changes to improve
critical provider retention and satisfaction. I also asked the Center
for Naval Analysis to complete a study on provider satisfaction to
assess the extent to which changes in special pay would promote
retention. The goal is to make the pays more flexible, raise the caps,
and remove some of the restrictive aspects of the contracts with the
intent of demonstrating early in an officer's career that they are
valued. If we don't value our providers, we cannot expect them to
continue to provide outstanding medical service. We track retention by
the use of loss rates compared to beginning full strength numbers. The
annual loss rates for the Medical Corps, as a whole has held steady at
10-11 percent and the primary care communities are healthy. However, I
am concerned about our retention rates for enlisted and officer medical
specialties. Loss rates within surgical specialties are high and we
have dramatically low retention rates. Specialties such as General
Surgery have a loss rate over 22 percent and Orthopedic Surgery has a
loss rate over 27 percent. Other equally important wartime critical
specialties are also undermanned, including anesthesia (93 percent) and
neurosurgery (57 percent). We predict a large exodus of radiologists in
the next two years as many reach the end of their service obligations.
Distribution problems are significant because we have not been able to
keep pace with attrition in some specialties. There exist significant
pay gaps between our surgical specialists, and their civilian
counterparts (frequently in excess of $100 thousand per year).
Reductions in the Health Professions Scholarship Program (HPSP) several
years ago, coupled with reductions in Graduate Medical Education
training pipelines, have contributed to significant shortages of
providers. We have several military treatment facilities where we are
unable to assign a military radiologist, which we have to replace with
high cost contract support.

Dental Corps
After three years of increasing annual loss rates, the dental corps
annual loss rate for fiscal year 1999 was down to 8.3 percent. While
still too early for conclusive analysis, this improvement may have
resulted from increased special pay for military dentists and resolving
manning shortages resulting from enhanced accession programs.
Continuation of such initiatives is essential to ongoing efforts to
access and retain qualified officers.

Nurse Corps
Although, overall fiscal year 2000 data revealed generally higher
retention levels than in prior years, the nationwide nursing shortage
has adversely impacted our Nurse Corps. In direct competition with the
private sector for a diminishing pool of appropriately prepared
registered nurses, Navy faces shortages in the nurse anesthesia,
maternal-child, psychiatric and operating room specialties, that must
be addressed if we are to effectively meet both operational and
peacetime healthcare delivery missions. Currently, only nurse
anesthetists are authorized to receive incentive special pay. That
program has been a successful retention tool thus far, but the
civilian-military pay gap in that field continues to grow. In order to
more accurately gauge compensation gaps for both generalist and
advanced practice nurses, the Nurse Corps is also included in the
Center for Naval Analyses study on Health Professions Retention
Accession Incentives. Results of the study will provide a tool for
future strategies. Further retention bonuses may be needed to retain
all types of nurses as competition increases for the dwindling supply.

Medical Service Corps
Medical Service Corps as a whole, enjoys a relatively stable annual
loss rate of nine percent, however loss rates vary significantly
between specialties. Many of our health professionals incur high
educational debts prior to commissioning and the amount of debt load
increases with succeeding accessions. In addition, a substantial pay
gap between military and civilian licensed professionals has resulted
in decreasing retention. There is some variation over time of those
specialties that are most difficult to recruit and retain, although
some are consistently on our critical list. Currently, optometrists,
pharmacists, psychologists and environmental health officers present
the greatest challenges.

Enlisted Members
Navy Medicine's enlisted member retention statistics compared to
Navy Line communities are fairly similar. However, problems arise in
specialized areas such as pharmacy, radiology, and search and rescue
fields. In the Dental community, shortfalls are beginning to appear
both in recruitment and retention. An enlistment bonus for HMs and DTs
is needed to help us more effectively compete in today's tight
employment market. Increasing the selective reenlistment bonus (SRB)
cap and authorizing SRB payments for advanced technical Navy Enlisted
Classifications (NECs) would help improve retention in the ratings,
particularly where there is a substantial pay delta with civilian
counterparts.

Uniformed Services University of the Health Sciences
As the Executive Agent of the Uniformed Services University of the
Health Sciences (USUHS) I would like to comment on the achievements of
the University and its contributions. I am proud to inform you that the
Secretary of Defense recently awarded USUHS the Joint Meritorious Unit
Award for exceptionally meritorious service from July 1, 1990 to July
1, 2000. The University has graduated 3,000 military physicians with a
better overall understanding of the military, a retention rate almost
twice as long as scholarship physicians and 42 percent of the graduates
serving in operational or leadership positions. The University also
provided over $85 million in clinical services to the military services
and has trained over 200,000 defense personnel with an annual cost
avoidance of over $40 million. The Casualty Care Research Center of the
University has trained over 4,000 emergency health providers. I would
also like to point out that USUHS' unique military training offers an
enormous intrinsic value to our hospitals and operational billets that
cannot be measured.

Make TRICARE Work
We continue to make significant progress in improving TRICARE and
enjoy the full support of the senior line leadership. Our new Chief and
Vice Chief of Naval Operations (CNO, VCNO) have already shown a great
degree of interest and appreciation for Navy Medicine and are providing
continued support in making TRICARE work. The Defense Medical Oversight
Committee (DMOC) continues to be an active and influential body when it
comes to Defense Health Program (DHP) funding requirements in the
context of other service decisions and management and reengineering
initiatives. Line and medical leadership is looking for ways to improve
the delivery of the health care benefit.
As stated earlier, the recent passage of the Fiscal Year 2001
National Defense Authorization Act (NDAA) brings expanded health care
benefits to our beneficiaries. Although the new law includes
initiatives such as TRICARE Prime Remote for families, elimination of
co-pays for active duty family members, and a catastrophic cap
reduction, its greatest impact will be enhancing the healthcare benefit
for our senior retirees and their families. In looking at our strategic
plan's ``Health Benefit'' theme, we will concentrate on informing our
customers, with the goal that all our beneficiaries will be
knowledgeable about and confident in their health benefits. This
objective will be even more critical as we implement the recent
legislative changes that improve the health benefit. We will also focus
on improving access, so beneficiaries will have timely access to
services, assistance and information. And we will do all we can to
simplify the delivery of the health benefit.
This legislation is a milestone in military health care not seen
since the initiation of the CHAMPUS program more than thirty years ago.
We are working with DOD (Health Affairs), the TRICARE Management
Activity and the other services to put these changes into effect.
Embrace Best Business and Clinical Practices--Optimization
There is no more important effort in military medicine today than
implementing the MHS Optimization Plan to provide the most
comprehensive health services to our Sailors, Marines and other
beneficiaries. Optimization is based upon the pillar of readiness as
our central mission and primary focus.
For several years now, we have attempted to shift our mindset from
treating illnesses to managing the health of our patients. Fewer man-
hours will be lost due to treatment of injury or illness because we
manage the health of our service men and women, which keeps them fit
and ready for duty. With this in mind, TRICARE Management Activity and
the three services created an aggressive plan to support development of
a high performance comprehensive and integrated health services
delivery system. We took lessons learned from the best practices of
both military and civilian health plans. The outcome was the MHS
Optimization Plan. Full implementation of this plan will result in a
higher quality, more cost effective health service delivery system.
The MHS Optimization Plan is based on three tenets. First, we must
make effective use of readiness-required personnel and equipment to
support the peacetime health care delivery mission. Second, we must
equitably align our resources to provide as much health service
delivery as possible in the most cost-effective manner--within our
MTFs. And third, we must use the best, evidence-based clinical
practices and a population health approach to ensure consistently
superior quality of services.
Although many commands report numerous efforts to optimize or
improve their facility, I am concerned that frequently these efforts
are not tied to specific goals or objectives. This is where performance
measurement comes in. Performance measurement provides focus and
direction, ensures strategic alignment and serves as a progress report.
A part of the Optimization Plan is identifying a specific Primary
Care Manager for each beneficiary. Assigning PCMs by name will improve
access and continuity of care. Each PCM will manage the health of their
patient and coordinate their care. When necessary, PCMs will refer
patients to a specialist. Each PCM is a member of a health care team.
This team will provide support when the PCM takes leave, has training
or is deployed. The team concept further enhances continuity and
customer satisfaction. The end result is a healthier population, which
is a primary goal of the Optimization effort.
In the Navy, we are making available comparative performance data
on all facilities--so MTF commanders can see where they stand and learn
from each others' successes. Ultimately, it allows us to raise the bar
for the whole organization. As we continue in our journey of applying
performance measurement, we will begin to identify targets for our
system and for each MTF. Holding MTF COs accountable for meeting those
targets will be the next step in this evolution.
When Navy Medicine first decided that using metrics would help us
drive organizational change, we asked the Center for Naval Analysis to
help us. Once the leadership of Navy Medicine had come to agreement on
our Mission, Vision, Goals and Strategies, we partnered with CNA to
develop a fairly complex system of composite metrics that we can look
at to see if we are going in the right direction. We are completing our
second year with these metrics and have found that many of the measures
have data that only changes once a year. This may be fine to measure
how well we are doing in moving towards some of our strategic goals,
but they are not adequate by themselves to manage the complexity of the
Navy Medical department. This year we've added two other ``levels'' of
metrics. One is a group of Annual Plan measures. After reviewing our
strategic plan in light of the current environment, understanding the
strengths, weaknesses, opportunities, and threats to our organization,
we identified several priorities for the year. We then identified
measures to track progress on these items--and this data has to be
measurable at least quarterly. Finally, we have just identified 20-25
measures for our ``Dashboard of Leading Indicators'' that our
leadership will be looking at on a monthly basis. Once we look at the
historical data for these dashboard indicators, we will be setting not
only targets for where we want to be but also action triggers in case
we are going the wrong direction in some area. We will agree on a level
below which, we will no longer just watch and see if it improves, but
we will take action to change the processes. So you can see it is an
ongoing journey or evolution--and I believe each of the services is
involved in a similar evolution. We in the Navy have web based our
Optimization Report Card and the satisfaction survey data is provided
to MTF commanders in a more user friendly display on a quarterly basis.

Dental
Let me provide one more example of effective use of performance
measures that is taking place within our Navy Dental organization. In
June 1998, senior dental leaders, including Commanding Officers,
implemented 12 system metrics to be collected uniformly across all
levels of Navy Dentistry. The system-wide application and utilization
of this initiative has lead to improved alignment while documenting
higher performance. During the past seven quarters, improvements in the
data collection process enabled valid and useful data based decision-
making. This metric-based management has produced significant outcomes:
--Dentist Productivity increased by 12 percent.
--Operational Dental Readiness increased from 90 to 96 percent.
--Dental Health Index increased from 22 to 34 percent.
A composite metric ``dashboard'' was developed as a tool to allow
overall performance evaluation while considering all metrics
simultaneously. This tool is used quarterly to monitor the performance
and effectiveness of each Command (and even down to the branch level at
170 branches, and 13 Naval Hospitals and 59 ships). All dental units
achieve a composite score ranking. It is significant to note that
today's lowest scoring dental unit has a higher composite performance
score than that of the top performer 12 months ago. Guided by metrics,
Navy Dentistry moved military dental billets and eliminated substantial
contract costs. These dollars are then available as working capital to
meet requirements within the dental system to further increase
production and efficiency.

Optimization Resourcing Levels
Our analysis of our direct care system indicates that in many
cases, Military Treatment Facilities are not optimally staffed and
funded to deliver efficient health care. The direct health care system
can not function at optimal levels in an austere fiscal environment.
For example, a Family Physician working with two clinical support staff
may be able to effectively care for a panel of only 750 adults. If
provided with the industry standard of 3.5 support personnel, that same
provider can assume responsibility for 1,500-2,000 adults. The
Optimization Plan requires that the cost of the additional support
staff be recouped via the higher throughput. In addition to increasing
our marketshare, return on investment is generated as the actual cost
of care is lower when that care is performed at marginal cost in the
direct care system.
To begin this process, we must make an initial investment in staff.
Clinical support staff to clinical provider ratio is presently 1.81.
The MHS Optimization target is 3.50. Additional staff in the following
categories is also necessary: Case Managers to coordinate care for the
top 1 percent of medically complex cases, freeing clinical providers to
do more direct patient care. Utilization Managers are needed to analyze
trends in ambulatory care usage by diagnostic and patient category, and
develop plans for population health interventions. Medical Record
Coders to perform accurate and detailed coding to account for workload
and performance, thus ensuring marketshare is accounted for in
comparison with contractor performed work. And Pharmacy technicians are
needed to support increased prescription volume with workload
recapture. I am aware that investments of this nature carry the
inherent risk that return must be earned quickly enough to pay for the
salary tails that will be created. However, I am firmly committed to
changing the business practices and culture of Navy Medicine to
recapture workload currently being done in the private sector. Overall,
the area of resources continues to be one of concern. We do not have
adequate financial resources to provide what is needed within the
Direct Care System.
The rapidly escalating costs of the Managed Care Support Contracts
places the Direct Care System at risk. As these costs increase, there
is constant pressure to find relief by reducing the Direct Care Program
funding in our Military Treatment Facilities to pay for the Managed
Care Contracts. The Direct Care System cannot continue to be the source
for the Department's relief from these unplanned and unexpected
increased costs without serious degradation of the most cost effective
portion of our Military Health System.
As a result of these internal pressures, I have restricted the
resourcing of the Direct Care Program of Navy Medicine to a survival
basis over the past two years. This action has left us in a position of
detracting from our facility maintenance, equipment replacement, and
continuing medical education programs to ensure that we use our limited
resources for the delivery of the healthcare benefit. As we continue to
underfund our facilities maintenance, this will eventually come back to
haunt us in more costly repair requirements, higher Military
Construction Program requirements, and higher equipment replacement
requirements.
Of concern is also the replacement cycle for our MTFs and
maintenance of real property. We now face an average facility
replacement cycle of over 100 years, compared to data indicating the
private sector is less than 25 years. This does not mean that the
private sector plans to replace their facilities every 25 years, but
implies that a major renovation will be required every 25 years to
remain competitive. If we do not spend more on maintenance
requirements, a significant degradation of our infrastructure will
result.
A replacement hospital is badly needed for our beneficiaries in
Naples, Italy. The new hospital is almost 30 percent complete. The U.S.
Navy contract with the Italian developer currently calls for leasing
the hospital upon its completion in late 2002. There is also the option
to buyout the facility, which may offer advantages over leasing.

Quality of Care
We are all concerned over the quality of care our military
beneficiaries receive. As we move to ensure greater access, we must
balance this with quality of care. Navy Medicine's goal is to increase
the number of support staff to more efficiently and effectively assist
our providers. These steps will minimize the time providers currently
spend performing administrative duties; enabling the provider to spend
more quality time with their patients while increasing their overall
productivity.
Assigning patients to a personal Primary Care Manager, who will be
familiar with his/her patients, thus decreasing the time required for
the physician to review the patient's history, will further improve
continuity of care and customer satisfaction. The MHS Optimization Plan
will play a key role in allowing enrollee assignment to a PCM by name.
Deployment of the Computerized Patient Record (CPR) will also
increase quality and access. The CPR has been fully funded for
worldwide implementation by the end of fiscal year 2002. When deployed,
the CPR will provide a comprehensive life-long medical record of
illnesses, hazardous exposures, injuries suffered, and the care and
immunizations received by our beneficiaries. The CPR will also provide
clinical decision support and gives military health care providers
instant access to the health care history of each patient.
Navy Medicine has critically examined opportunities for improving
patient safety. The following initiatives have been undertaken to
improve quality of care:
--A systems approach to improvement using a root cause analysis tool
has been implemented at all of our facilities. This tool is
used to analyze all adverse events and certain close calls and
requires the involvement of a multidisciplinary analysis team.
Information regarding common themes is reported back to our
facilities for appropriate preventive action.
--Participation in the Institute for Healthcare Improvement (IHI)
Breakthrough Series to identify opportunities to implement best
practices in four hospital high hazard areas: the Operating
Room, Obstetrics, the Intensive Care Unit, and the Emergency
Department.
--Establishment of a Birth Product Line to address the delivery of
our largest patient service and implement refined clinical
practices across Navy Medicine. This will include a focus on
reducing variation in access to anesthesia and pain control,
and a standardized approach to perinatal education.
--Promoting the use of Evidence Based Medicine with active
involvement in the DOD/VA Clinical Practice Guidelines (CPG).
Navy Medicine is sponsoring an evidence based CPG addressing
urinary tract infections.
--Implementation of Composite Health Care System II (CHCS II) of
computerized patient records to improve documentation of care
provided including the follow up of laboratory and radiology
exams, and pharmacy orders.
--Deployment of the Pharmacy Data Transaction System (PDTS) to
prevent prescription and allergy errors in a highly mobile
population.

Medical Research
Navy Medicine also has a proud history of incredible medical
research successes from our CONUS and OCONUS laboratories. Our research
achievements have been published in professional journals, received
patents and have been sought out by industry as partnering
opportunities.
The quality and dedication of the Navy's biomedical R&D community
was exemplified this year as three researchers were selected to receive
prestigious awards for their work. CDR Daniel Carucci, MC, USN received
the Joints Chiefs of Staff Award for Excellence in Military Medicine
for his work as an operational flight surgeon caring for Marines and
Sailors and as a cutting-edge molecular biologist working on advanced
malaria genomics research. His current efforts in malaria research are
providing new and exciting avenues for malaria research and will
accelerate the development of novel malaria vaccines and drugs.
As other examples of scientific achievement, The former Secretary
of the Navy, Richard Danzig, personally recognized two senior Navy
researchers and awarded them Legion of Merit Medals. CAPT David Harlan,
USPHS (until recently U.S. Navy), was lauded for his research into new
strategies for the treatment of combat injuries. While a Navy
researcher, he developed a new therapy to ``educate'' the immune system
to accept a transplanted organ--even mismatched organs. This field of
research has demonstrated that new immune therapies can be applied to
``programming stem cells'' and growing bone marrow stem cells in the
laboratory. The therapies under development have obvious multiple use
potential for combat casualties and for cancer and genetic disease.
CAPT Stephen Hoffman, MC, USNR, was recognized by former Secretary
Danzig for his pioneering work in malaria vaccine development and
malaria genomics. He published the first report that DNA vaccines were
safe, well tolerated, and elicited an immune response in normal,
healthy people. His work could lead to the development of other DNA-
based vaccines to battle a host of infectious diseases such as dengue,
tuberculosis, and biological warfare threats.
The Navy's OCONUS research laboratories are studying diseases at
the very forefront of where our troops could be deployed during future
contingencies. These laboratories are staffed with researchers who are
developing new diagnostic tests, evaluating prevention and treatment
strategies, and monitoring disease threats. One of the many successes
from our three overseas labs is the use of new technology, which
includes a hospital-based computerized data management, analysis and
reporting software system. This technology is in use at our laboratory
in Jakarta, Indonesia. This system will identify infectious disease
outbreak occurrences over an archipelago consisting of some 17,000
islands inhabited by 230 million people.
Our researchers have designed a prototype computer system and
lightweight flight vest that translates digital information from an
aircraft's orientation instruments into vibrations so a pilot's sense
of touch becomes a continuous spatial orientation cue. This research is
especially important since future generation aircraft will have
performance parameters that severely challenge human spatial
orientation.
Other achievements during this last year include development of
hand-held assays to identify biological warfare agents, documentation
of the immunogenicity of the first oral campylobacter vaccine and
determination of the Norwalk-virus as a major infectious disease
threat. Our researchers designed probability-based decompression dive
tables for Navy divers, studied the acute effects of exposure to jet
fuel vapors and designed a software package that estimates medical
supply requirements based on patient flow and level of care.

Conclusion
Navy Medicine has covered a lot of ground over the last year and we
face the future with great enthusiasm and hope. The new legislative
initiatives, along with the MHS's Optimization plans join to make our
Navy Medical Department a progressive organization. I thank you for
making the military health care benefit the envy of other medical
plans. You have provided our service members, retirees and family
members a health benefit that they can be proud of. The new
entitlements are not inexpensive and solutions to pay for them must be
found. The MHS can no longer be under-resourced for the design of the
benefit. We must also have predictable and stable funding levels, which
would make planning more effective. Optimization and reengineering
efforts can only be successfully implemented if our commanding officers
know what resources they have to work with.
I stressed in my statement last year the need for a predictable and
stable funding environment, which would allow us to plan and execute
programs over the span of a complete year, or perhaps preferably,
multiple years. We appreciate the close attention that Congress affords
to improving the quality of military medical care and our ability to
resource healthcare requirements.

Senator Stevens. Thank you very much. General Carlton.
General Carlton. Yes, sir. Mr. Chairman, Senator Inouye,
members of the committee: It is an honor to appear before you
again and I look forward to addressing the issues that are
affecting our Air Force Medical Service today. You have my
complete statement and I would ask that it be entered into the
record.
Senator Stevens. Yes, sir. All of your statements will be
entered in the record.

TRICARE BENEFITS

General Carlton. Wonderful.
2000 was an incredible year for us and 2001 is shaping up
to be equally exciting. First, I have got to congratulate and
thank the Congress for doing what we needed to do, and that was
accomplishing the daunting feat of establishing TRICARE for
Life. We are delighted that we can now restore the full benefit
to our older retirees, our family members, if you will, and
hope to bring as many of them back into our direct care system
as our facilities allow. They have truly earned the right to
this health care.

MAIL ORDER PHARMACY PROGRAM

By the same token, the expansion of the mail order pharmacy
program in April is a true triumph for our military families
and we are eagerly preparing for its successful implementation.
These are just two areas that the Congress has directly helped
the military families, both older and younger, and I am
convinced they will make a huge difference in our people's
lives.
I will be frank in saying that we are challenged by the
many competing fiscal requirements, to include these new
benefits. Like our sister services, we are working hard with
the Office of the Secretary of Defense (OSD) and our line
leadership to identify critical funding to make them succeed
while maintaining the viability of our existing programs. To
the best of our knowledge, we believe the $1.4 billion number
is correct, in direct response to Senator Domenici's question.
We must also address recapitalizing our direct care system.
Investing in our facilities and infrastructure is critical if
we are to provide the health care benefits that our
beneficiaries have earned, especially the TRICARE for Life. It
will be a large bill to pay, but we must recapitalize if we are
to be competitive today and into the future.
The Air Force Medical Service has accomplished a great deal
this year improving services for our patients at the grassroots
level. Each of our facilities is now fully invested in the
implementation of our primary care optimization plan. We are
seeing real successes, especially within the primary care
optimization teams and between their patients. Our patients are
happy with our more personal approach and our teams are excited
to provide this personal level of care.

JOINT INITIATIVES WITH THE DEPARTMENT OF VETERANS AFFAIRS

Our primary care optimization efforts have been recognized
as creating a cultural change based on efficient, effective,
quality health care. In fact, many of our initiatives have been
adopted by OSD for use across the military system. In this same
way, we continue to expand our initiatives with the Department
of Veterans Affairs to offer better services for our patients
while being responsible stewards of the taxpayers' dollar.
We now have four successful joint ventures, the newest one
at Travis Air Force Base began in December with the opening of
a new Veterans Affairs (VA) clinic on site outside the hospital
at Travis. We are also very proud of our contracting
partnership with the VA, established by our Air Force Logistics
Office at Fort Detrick, which is saving us millions of dollars.
Our activities in the readiness arena are equally exciting.
We continue to refine our light, mobile, and modular deployable
forces. Our smallest response package, or SPEARR team, the
Small Portable Expeditionary Aeromedical Rapid Response, is a
ten-person team deployable within 2 hours in a 1-pallet-
equivalent small trailer. This team offers a broad scope of
care from public health to emergency surgery and critical care.
Air Force SPEARR teams accompanied the President last year on
each of his trips to India, Nigeria, and Vietnam.
Other Air Force Medical Service efforts to improve medical
response include the establishment last July of our
Developmental Center for Operational Medicine in San Antonio.
It is the Air Force source to conduct rapid prototyping and
solve the complex issues in operational medicine. This center
worked with the Texas National Guard in early February to
conduct a 3-day community bioterrorism exercise in San Antonio
called Alamo Alert. The Texas Department of Health, the Army
Medical Department (AMEDD) Center and School, and the City of
San Antonio were co-sponsors with us. This exercise facilitated
our ability to work together in the event of a chem-bio
problem. We plan to expand on this type of training scenario in
other locations.

GLOBAL EXPEDITIONARY MEDICAL SYSTEM

We are also testing our Global Expeditionary Medical
System, or GEMS, which is an exciting state of the art stepping
stone to an integrated biohazard surveillance and detection
system.
We continue our outreach in humanitarian and civic
assistance, both internationally and at home. We have now
taught our trauma and disaster systems courses to students in
six Central American countries, South Africa, and Turkey. By
the end of this year we will have taught disaster courses to 20
percent of the world's nations.
Another example: In October we completed a mission with the
Air Force Deployable Optometric Team to provide comprehensive
primary eye care to remote underserved Native Alaskan villages.
This is win-win. We get valuable training in an austere
environment and great Americans get the care that they need.
I am very enthusiastic about many of our initiatives and
will limit myself to just one other. That is the work of our
Critical Care Air Medical Transport (CCAT) Teams. When the
U.S.S. Cole was attacked in October, our CCAT concept was truly
validated. The teams cared for 11 of the most seriously injured
patients, to include two ventilator patients just out of
surgery, and delivered them safely from Djibouti to Ramstein
Air Base, Germany, 12 hours later. These teams were composed of
Army and Air Force team members as a joint team out of Lansdoul
Army Medical Center in Germany. I am extremely privileged to
lead these exceptional health care professionals.

PREPARED STATEMENT

Finally, let me say that we could not accomplish all that
we must without your support, which has been absolutely
exceptional.
Thank you very much for that.
[The statement follows:]

PREPARED STATEMENT OF LIEUTENANT GENERAL PAUL K. CARLTON

Mr. Chairman, Senator Inouye and members of the committee, thank
you for this opportunity to address the successes and challenges of the
Air Force Medical Service. The year 2000 was a banner year for the
AFMS. Never have the stakes been so high, yet the rewards so great. We
continue to work very hard to be global leaders in health care through
our efforts in humanitarian assistance, force health protection,
population-based health care and primary care optimization, and have
experienced some exciting results. First and foremost, the AFMS
believes it is our privilege to serve in the defense of our country and
our pleasure to serve our great American patriots in peacetime health
care.
As we support the Expeditionary Aerospace Force, we have recognized
in this evolutionary time that we must be relevant to our country in
every aspect possible. What is our purpose today, and are we fulfilling
it in a way no one else could? We desire to step up and meet the
crucial needs of our nation with our unique talents and assets. At the
same time, we have to be aware of the stiff competition for limited
resources. Our cost must be reasonable so that we may be responsible
stewards of the taxpayers' money. How can we optimize our resources to
be truly effective? These are the concepts that guide our decision-
making on a daily basis.

Air Force Medical Readiness in the Expeditionary Era
As the Cold War military scenarios fade from our memory, and dozens
of small-scale contingencies around the world challenge deployed
military medics, the Air Force Medical Service has redesigned its
medical readiness philosophy to meet the new readiness challenges of a
changing world. We recognize that we must be able to engage the full
spectrum of operations. To accomplish this, we must ask ourselves,
``What are the diverse missions faced by military medics to support
these operations?'' ``What are our readiness roles in these uncertain
times?''
We view the medical readiness mission as three-fold: humanitarian
and civic assistance (HCA), medical response to disasters, and support
of traditional wartime operations. These three missions complement the
DOD vision of a force that can ``Shape, Respond, and Prepare.'' For
example, HCA missions can shape the environment of our allies to
promote democracy, peaceful relationships, and economic vitality--
``preventive medicine'' against war. By responding promptly and
appropriately to disasters, we enhance the value of our partnership
with our allies. Both HCA and disaster response missions can create
capability and provide lessons to deployed personnel that could be used
in wartime operations, thus preparing for our traditional readiness
mission, too.
The threats faced by military medics in the post-Cold War era are
diverse and frightening. Weapons of mass destruction (nuclear,
biological, chemical), natural disasters (flood/hurricane, drought/
famine, tornado/earthquake), technological (information management,
industrial, toxins), and complex political/natural crises are among the
scenarios that might involve military medical personnel. These missions
could be overseas or just outside a stateside military base. Senior
government officials and taxpayers may expect military medics to bring
expertise and the proper gear in rapid fashion to situations involving
any of these threats.
Responding appropriately and rapidly means enhancing a core
competency for DOD medics. Efficient use of airlift for rapid response
means paying careful attention to the weight and volume of gear. Rapid
response is often a key to mission success. A large, inflexible
response may be delayed by transportation limitations, resulting in
needless loss of life and limb at the site of the contingency.
The AFMS has proposed a series of solutions: light, lean, mobile
(``small footprint'') medical teams; a modular ``tiered and tailored''
response, custom-built for each mission; rapid insertion of innovative
technology concepts into deployment packages; and strategic
partnerships with other federal agencies, our Total Force colleagues,
and the military medical personnel of allied nations.
``Small footprint'' teams take full advantage of the revolution in
medical electronic equipment. Capability that was formerly too large to
move is now carried in one hand. Patient monitoring that was confined
to an intensive care unit can now be done in field conditions. From
these improvements and careful logistics, a small team with backpacks
can provide impressive medical care quickly in any corner of the world.
Limiting the weight of the packs to 70 pounds allows them to travel as
normal luggage on a commercial airliner, if military airlift is not
available.
Modularity is another key to an appropriate medical response to
modern threats. By creating small, multi-functional teams, the medical
service can provide the on-scene commander with a flexible response,
tailored for the specific contingency. These ``Medical Building
Blocks'' permit problem-specific treatment, just as the various blood
components of today offer flexibility over the traditional whole blood
treatments of World War II era. With increased efficacy, small portable
medical teams extend limited resources and maximize options for
commanders. It is no longer necessary to task eight C-130's to haul an
air transportable hospital when a five-person, backpack-portable,
surgical team can provide the needed care. After hurricanes or floods,
for example, the greatest need may be for public health and preventive
medicine assessment. Deploying a two-person aerospace medicine/public
health team or several such teams may be the ideal response. The first
``tier'' is usually the local response, followed by additional
``tiers'' of teams as needed. With modular teams, this type of
individualized tasking can be done efficiently and effectively.
There are a number of new USAF medical teams that are useful tools
in meeting our new readiness missions. The disaster response ``force
package'' is called the SPEARR, or the Small Portable Expeditionary
Aeromedical Rapid Response team. Deployable within 2 hours, this 10-
person team travels with a small trailer (one pallet-equivalent) that
is ``sling-loadable'' (e.g., can be transported from different
locations via a sling from a helicopter). It can thus be pulled by a
standard pickup truck or airlifted by helicopter, and does not require
a forklift for utilization. The team has a broad scope of care: initial
disaster medical assessment, public health/preventive medicine,
emergency/flight/primary care medicine, emergency surgery (general and
orthopedic), critical care, patient transport preparation, along with
intrinsic communication capability for aeromedical coordination,
consultation, or re-supply. This team has completed its development
process, including successful field validation tests in San Antonio and
in Alaska. In fact, a USAF SPEARR team accompanied the President to
India in March, Nigeria in August, and Vietnam in November.
To further prepare for disaster response, we established the Air
Force Development Center for Operational Medicine in July in San
Antonio, Texas. The center is the single source for Air Force
satellites to conduct medical research, education and training for all
levels of disaster response. It was designed to help DOD identify what
resources are available by transitioning emerging technology from
concept to implementation.
In early February, the DCOM conducted a three-day community
bioterrorism exercise, called Alamo Alert, in San Antonio, Texas, in
conjunction with the Texas National Guard, the Texas Department of
Health and the city of San Antonio. In this tabletop exercise, Alamo
Alert explored city, county, state and federal responses to a
contagious biological agent. Wilford Hall and Brooke Army Medical
Center were among the local medical response forces. Our goal was to
help merge the plans of all the different agencies, facilitating their
ability to work together in the event of a real terrorist attack. We
want our personnel to understand that force protection must go beyond
the gates of the base, and we want Americans to understand--and be
prepared for--the very real nature of a bioterrorism threat.
In September, we completed the fielding of our Chemically Hardened
Air Transportable Hospitals (CHATHs). The CHATH represents the
culmination of a joint effort of approximately 10 years to provide
collective protection capability for patients treated in the field in a
chemical warfare environment. As we convert our ATH assets to the new
Expeditionary Medical Support/Air Force Theater Hospital (EMEDS/AFTH)
program, we are pursuing development and testing of a new chemical
protection capability for our EMEDS, using existing CHATH assets.
Another new tool for appropriate medical response is the
International Health Specialist (IHS) occupational track. These medics,
hand-picked from all corps for their language, cultural, and regional
expertise, will be interwoven with medical readiness planning offices
and platforms throughout the U.S. Air Force. The first group of 20 is
being assigned to their new duties, and the cadre is expected to grow
for several years. Most selected officers and enlisted personnel will
need additional training to assume their responsibilities, while others
will already have the required skill set to function effectively as
regional medical experts. These international health specialists could
be called upon to act as advisors, advanced on-site (advon) team
members, or to facilitate HCA or other missions into the region of
their expertise. IHS personnel will maintain and provide regional
medical expertise throughout their careers. This rating may be a key
credential for a successful USAF medical career in future years.

State-of-the-Art Expeditionary Technology
Rapid deployment of appropriate technology is another important
factor in optimizing medical readiness. Military medics must take full
advantage of the revolution in equipment, computers, monitoring gear,
and other advances. Surveillance for biological pathogens or chemical
toxins should be state-of-the-art in DOD medical packages. The AFMS is
pursuing this goal through our Global Expeditionary Medical System
(GEMS). This system is in the testing phase now. It is a stepping stone
to an integrated biohazard surveillance and detection system that will
keep a global watch over our forces. GEMS incorporates an electronic
medical record as a basis for real-time data analysis and back up agent
identification with DNA fingerprinting and automated results reporting,
and will serve as the foundation for an Air Force wide integrated
surveillance and medical command and control (C²) network.
Through GEMS, data collection, assessment, and trend analysis is
automatically performed at the operational (unit), tactical (base), and
strategic (U.S.-based centers of excellence) levels. Individual
specific analysis will provide quick patient diagnosis through the use
of DNA fingerprinting technologies. We hope, with ongoing site and
regional data review, population-specific analysis will pick up disease
trends to provide an early warning of outbreaks or potential biological
attacks. Technology is key with portable C²-linked test
platforms that aid the field medic in determining the nature and cause
of the biological hazard to facilitate mitigation.
The AFMS is also on the cutting edge in the field of telemedicine.
For example, as soon as feasible, we will be embarking on a four-year
program to convert facilities throughout the Air Force from standard
film-based radiography to computed radiography. Outside of live VTC
teleconsultation, digital imaging and teleradiology is the most
resource intensive area in terms of computer storage capacity and
telecommunication needs such as bandwidth. So, we're very concerned
about setting up a communications infrastructure and Patient Archiving
and Communications System (PACS) in the most effective way. Working
with key industry members will facilitate our success. Complicating how
we currently do business is the fact that the AFMS anticipates losing
more than 50 percent of our radiologists during the next three years
because of competition with the civilian job market.
While teleradiology is not a panacea, it will reduce costs by
reducing the need to buy and store films, eliminate silver reclamation,
and also reduce by about 25 percent the need to send radiographs to
outsourced civilian radiologists for interpretation. We believe that
such a system, implemented ultimately throughout the DOD and other
federal agencies, can be cost-effective in the long run--one
preliminary analysis shows the break-even point at around seven years.
Equally important is that this system will significantly reduce turn-
around time between the time of interpretation by a radiologist and
posting of the report in the patient's record at the originating
medical facility.
At this time, we have computerized radiography systems in operation
at several of our larger facilities and have established connectivity
between Robins AFB, Georgia, and Wright-Patterson AFB, Ohio, between
systems from different vendors. At Prince Sultan Air Base in Saudi
Arabia, we are installing teleradiology equipment and hope to have the
system online and linked with Wilford Hall Medical Center, San Antonio,
within the next few months. This would reduce the turn-around time for
radiograph reports from seven to 10 days down to one to two days and
help one of our more remote bases. In addition, we are planning for the
teleradiology demonstration project based at David Grant Medical
Center, Travis AFB, California, in conjunction with several outlying
medical facilities of the Army, Navy, Coast Guard and Department of
Veterans Affairs.
Voice recognition is another fertile area for a rapid return on
investment. At Wright-Patterson AFB, two of our radiologists have
adapted a commercial off-the-shelf (COTS) voice recognition software
package to allow direct transcribing of radiology reports. A recent
evaluation showed that this specialized system is saving approximately
$1,500 per month per radiologist in transcription costs! We're looking
at this project for possible expansion throughout the AFMS.
Teledermatology is another maturing area. In TRICARE Region 10
(Northern California), we use a COTS software package over a virtual
private network connected via the Internet between David Grant Medical
Center and several military medical facilities in Northern California.
A business case analysis showed a return on investment in as little as
two months in heavily used outlying clinics. At Elmendorf and Eielson
AFBs in Alaska, we have been part of a teledermatology project with the
Alaska Federal Care partnership. In several other TRICARE regions, we,
along with our Army and Navy brethren, utilize a teledermatology module
developed at Walter Reed Army Medical Center, Washington, D.C. As part
of that same initiative, within the D.C. area we provide dermatologists
for making teleconsultations on a rotating basis.
Curiously, we are finding that the use of some teledermatology
systems is decreasing over time. While this may seem to indicate that
they may have only a novelty factor that quickly subsides, what we've
discovered is that the primary care providers are remembering their
teledermatology cases better and learning from them, resulting in a
lesser need for referrals.
Finally, we are working closely with the other Services, academia
and the commercial world to agree on standards for telemedicine
technology applications and are evaluating lightweight, portable
peripheral devices such as lung spirometry analyzers, EKGs and
ultrasound probes that can attach to laptop, or even smaller, computers
in a ``plug and play'' mode. These, in conjunction with the development
of computerized medical records and improvements in medical
information, patient decision support and patient tracking systems and
telecommunications, are rapidly increasing our capability to provide
medical care of the highest quality to our deployed airmen in even the
most remote locations. One of our biggest tasks is integrating these
different facets of innovative technology to work seamlessly. As we in
the military continue to move toward a lighter, leaner posture, this
will become increasingly important.

Partnering
Other issues are also critical in our expeditionary medical
response. For example, how can we partner with our colleagues in the
Guard and Reserve to create a seamless, well-trained and equipped
force? We're doing this successfully with our Mirror Force initiative,
at all levels, from the policy-making level to the grassroots of the
unit level. I am proud to say that the AFMS has integrated the Air
Reserve Component in daily headquarters decisions as never before. We
have actively recruited 40 Individual Mobilization Augmentee reservists
and attached them to the Surgeon General's Office. These reservists are
involved in every aspect of daily operations, providing Reserve input
to our deliberations while broadening the perspectives of our full time
staff members. This year, at my invitation, the Air National Guard and
Air Force Reserve each provided one general officer to work directly
with me on developing medical responses to WMD. This will assure AFMS
actions are fully coordinated and built from the ground up with Guard
and Reserve input.
Our medical reserve component personnel have proven themselves to
be highly dedicated and competent--capable of any tasking in support of
contingency operations or humanitarian and civic assistance missions.
In fact, in January alone, a total of 681 personnel from the Guard and
Reserve deployed to Macedonia, Saudi Arabia, Oman, Honduras, Peru,
Ecuador, Germany, and Japan, plus various locations within the United
States, in support of AFMS operations and exercises.
In addition, both Guard and Reserve physicians, in their civilian
location of employment, provide needed sustainment training for active
duty surgeons and trauma specialists through affiliation agreements
with civilian hospitals in St. Louis and Cincinnati. Our medical
personnel receive invaluable trauma training in these civilian
facilities due to the volume and variety of cases; something we only
experience in our military hospitals on a limited basis.
Finally, the reserve component continues to provide more than 85
percent of our total aeromedical evacuation capability and has always
performed this responsibility in an absolutely superior manner. In
short, as with our line counterparts, the AFMS could not go to war
without the Guard and Reserve.
How can we create a similar partnership with our coalition nation
military medical colleagues? One way is through sharing the new
readiness skills and roles used in the active force. For example, U.S.
Air Force medics have taught a trauma systems course, sponsored by the
Expanded International Military Education and Training system, to
approximately 390 students in six Central American countries, South
Africa, and Turkey. In each course, military medics from adjacent
countries have attended. Emphasis is on regional involvement, disaster
response, trauma care, leadership, civilian-military collaboration,
resource management, and ``Train-the Trainers'' skills.
In El Salvador, host nation graduates of the first course, held
last year, taught more than 100 colleagues and completely redesigned
the Emergency Department of their Central Military Hospital to more
efficiently handle trauma patients. They briefed a contingent of senior
medical officers from neighboring countries on their successes at the
second course, held recently in San Salvador. The U.S. ambassador from
El Salvador wrote me letters of thanks after both courses. Clearly--and
I emphasize this critical point--this type of partnership and training
can benefit our allies and create regional political stability and
economic prosperity, reducing the likelihood of future conflict.
Military medics have become the ``Tip of the Spear'' in recent
years. A USAF HCA deployment in Nicaragua in June l996 was the first
U.S. military presence in that country in 17 years. Two more HCA teams
followed in the subsequent two years. When recovery efforts for
Hurricane Mitch were being assembled, the Nicaraguans reported that the
military medical teams had created a climate of trust, and that U.S.
military civil engineering teams were welcome to help. Without the HCA
missions, this new relationship would not exist and the needed
assistance would not have been requested.
In another example, Air Force optometrists completed an inaugural
mission in October to several underserved Alaskan villages in the
state's northwest arctic borough region. The only way in or out of the
villages is by airplane. The trip was the result of an interagency
agreement between the Alaska Native Area Health Service, the Maniilaq
Association and the U.S. Air Force. The agreement, signed in August,
established a continuing mission to provide primary eye care to remote,
underserved Native-Alaskan villages in the region, offering an
opportunity to both help an underserved population and exercise the Air
Force's Deployable Optometric Team in an austere environment. The team
is a lightweight, self-contained, and highly mobile contingent of one
to three members who provide comprehensive primary eye care in a
variety of austere field conditions--team size can be rapidly expanded
if necessary to meet mission requirements. Our team was well received
by the Alaskans, providing care to 165 people. More than 90 percent
examined needed and were able to obtain prescription glasses. Ten
percent were identified and referred for advanced medical care. We look
forward to more of these DOT missions, serving those who need us and
gaining invaluable experience for future service to our nation.
By the same token, five Air Force dentists deployed on a
humanitarian aid mission to the war-torn nation of East Timor in early
December in support of United Nations peacekeeping efforts. While
deployed, the dental staff performed oral exams and tooth extractions
right on the street, or wherever they could find an acceptable place
for operating on patients. In those austere conditions, they even had
to cold-sterilize their tools with bleach. This experience provided
invaluable field training and inestimable personal reward.
As USAF medics seek to fulfill their mission of ``Global
Engagement'', other international partnerships will be needed. At this
summer's meeting of the International Committee of Military Medicine, a
worldwide organization of senior military medical officials, I proposed
an effort to create regional disaster response networks among the
membership, and to report models and successes at the next meeting in
2002. There was strong support among developing world member nations,
notably by several that have been devastated by disasters in recent
years. The national representatives resolved by a 63-0 vote to support
our plan, opening a new era of regional and worldwide cooperation
between military medical services.
While we are making exciting inroads in our international outreach,
the backbone of expeditionary health care remains our aeromedical
evacuation system. With our critical care aeromedical transport teams
(CCATTs), we provide critical care in-flight. The CCATT mission in
response to the apparent terrorist attack on the USS Cole in October
was a true validation of the team's purpose. The team cared for 11 of
the most seriously injured patients in-flight from Djibouti to Ramstein
AB, Germany, including two intensive care patients and some who were
just out of surgery. Other sailors traveled on ventilators and suffered
from multiple fractures, burns, cuts and bruises. But 12 hours after
takeoff, all arrived safely at Ramstein and were transported to nearby
Landstuhl medical center.
The experience proved to be a validation of our International
Health Specialist program as well. In Djibouti, the location with the
required level of trauma skills closest to Yemen, French doctors caring
for the critically injured patients were appropriately concerned about
letting these patients make the trip to Germany for care. However, two
CCATT members, who are IHS participants and speak fluent French, were
able to reassure their French colleagues that the wounded would be safe
in the hands of the U.S. Air Force medical team. After talking with
them and seeing our C-9 aeromedical airlift capabilities, the French
doctors were very happy to allow the transfer to take place.
By the same token, we have made headlines with the heroic efforts
of our ECMO (Extra Corporeal Membrane Oxygenation) team, the only one
of its kind in the world. Most recently, the ECMO team successfully
aeromedically evacuated a newborn baby from Okinawa to Wilford Hall
Medical Center's neonatal intensive care unit. Her grateful parents
credit the Air Force with saving their child's life. This is just one
example of our commitment to provide high quality health care to our
personnel and their families wherever they are around the globe.
While we are achieving invaluable medical readiness training
through our global missions, the AFMS is also expanding our training
opportunities on the domestic front by partnering with the civilian
health care community. We are looking at a number of civilian
facilities where Air Force medical professionals can gain training in
trauma and critical skills. We are already partnering with Ben Taub
Medical Center in Houston, the Center for Operational and Disaster
Medicine at Depaul Medical Center in St. Louis, and are negotiating a
partnership with the R.A. Crowley Shock Trauma Center in Baltimore,
Maryland. We already have a successful trauma care agreement in place
between Wilford Hall Medical Center and the city of San Antonio,
however one center cannot meet all the Air Force's needs for trauma and
critical care training of more than 1,400 personnel each year. This
training, whether in a military or civilian facility, prepares our
surgeons and medical teams to provide leading edge care to our patients
at home and around the globe.
In these many ways--through state-of-the-art technology, visionary
planning, and creative partnering, among others--medical readiness
remains the true core competency of military medics. By utilizing a set
of new tools, we can meet our diverse readiness missions and ``engage
the full spectrum of operations'' in the new millennium.

Population Health Improvement
During the past year, the AFMS made significant strides in our
efforts to deliver a fit, healthy and ready force, to improve the
health status of the people we served and to enhance the effectiveness
and efficiency of the health care we deliver. We continue to lead the
way in population health improvement.
For example, we have some exciting work ongoing with the DOD
Prevention, Safety, and Health Promotion Council (PSHPC), currently
chaired by the Air Force. Two of the primary prevention focal areas of
the Council include tobacco use reduction and alcohol abuse reduction.
Tobacco use is the single most preventable cause of premature death
in the United States, with 435,000 tobacco-related American deaths
every year. In the DOD, the cost of direct and indirect care for
tobacco is estimated at an annual cost of $900 million. In the Air
Force, even healthy (under age 36) smokers' health care costs and work
productivity loss is estimated at $107 million annually. These costs
are roughly equivalent to all the personnel assigned to an Air Force
base the size of Whiteman AFB, Missouri. One base, up in smoke every
year!
The Alcohol Abuse/Tobacco Use Reduction Committee, a subcommittee
of the PSHPC, is actively addressing this significant public health
issue. Partnering with civilian researchers, a $2.3 million grant
proposal was funded to conduct a DOD-wide study identifying the optimum
DOD tobacco cessation program. This four-year project began in October
and is designed to include 16 military installations across all four
services and to develop a model for installation-level tobacco
reduction efforts.
While DOD tobacco use, for the first time, is below a comparable
civilian sample, our goal is to meet or exceed the new Centers for
Disease Control Healthy People 2010 goal of reducing the percentage of
smokers to 12 percent. This will be no small challenge, but we hope the
initiatives in our tobacco use reduction plan will help us reach this
goal--and in fact, the plan is currently on schedule. The plan not only
targets prevention efforts for tobacco use, it also includes
initiatives designed to improve access to treatment. Specifically, we
need to improve access for our beneficiaries to combined behavior and
pharmacological therapies that have proven effective. Thanks to our
resale partners, we are addressing the issue of availability and
accessibility not only of tobacco, but also of tobacco cessation
products in our commissaries and exchanges.
Finally, leadership support is a requirement for success of this
initiative. The impact that instructor personnel have on young airmen,
sailors, marines and soldiers as role models during military training
and education cannot be overstated. They must set the example both by
not smoking in front of our young men and women and by sending a clear
message that tobacco use is not consistent with a fit, healthy and
ready force.
The PSHPC's alcohol abuse reduction team has also had a very
successful year. Our plan targets four specific areas: (1) improved
surveillance; (2) focused education and training; (3) identification of
high-risk groups; and (4) assessment and development of best practice
methodologies. I am pleased to report we are on track in all areas. We
have been able to add alcohol-related questions to an already existing
DOD customer satisfaction survey, enabling us to assess the prevalence
of heavy drinking in our TRICARE beneficiaries. We have also conducted
a thorough analysis of our service-specific unit leader prevention
programs.
The prevention of heavy drinking requires effective educational
efforts and, in some cases, a cultural change. The shift toward
population-based health care with an emphasis on force health
protection is crucial to our efforts. The responsible use of alcohol
needs to be conveyed from the top down. We can no longer afford the
$600 million estimated DOD annual cost from heavy drinking.
At the Air Force level, the concept of building a healthy community
involves more than just medical interventions. It also includes local
environmental quality and hazards; quality of housing, education and
transportation; spiritual, cultural and recreational opportunities;
social support services; diversity and stability of employment
opportunities; and effective local government. Impacting these elements
requires long-term, dedicated planning and cooperation between local
Air Force commanders and civilian community leaders. The creation of
the Air Force Community Action Information Board (CAIB) this year
brought a number of senior functional area representatives from across
the Air Force enterprise together to focus on community problems. The
CAIB now provides senior level oversight for the Integrated Delivery
System (IDS) that provides preventive services at the base, major
command, and Air Force level.
The first product of our IDS is the Air Force Suicide Prevention
Program, started in the summer of 1996, which has been very successful
at reducing the rates of suicide in the Air Force. Although even one
suicide is too many, the significant reduction in human lives lost to
suicide is a model for community-wide approaches.
A key tool for our program is the Suicide Event Surveillance System
(SESS), a web-based information management application that provides
secure, real-time data to all operational levels of the AFMS as well as
participating partners within the Air Force and DOD. The development of
SESS provides a real-time centralized data repository of all suicides
and non-fatal self-injurious events (NFSE). This includes demographic
variables, event characteristics (date, time, method used, substances
used), and risk factors (marital, financial, legal, and other
problems). E-mail notification is automatically generated from the
input source to the Force Health Protection and Surveillance Branch,
notifying users a new case has been generated.
This meticulous approach to program management, complemented by
outstanding customer teaming and leadership, produced a high quality
product. Most important, a major new weapon is available in the force
health protection arsenal, resulting in an enhanced ability to meet
mission needs across the Air Force. The fact that the Centers for
Disease Control and Prevention have expressed an interest in SESS for
nationwide use testifies to its success.

Primary Care Optimization
Another way we are in the vanguard of population health improvement
is through our primary care optimization (PCO) initiative, where we've
been working diligently to reengineer our primary care services. This
initiative is critical since more than 80 percent of all the care we
deliver in the AFMS is through our primary care clinics. Our Air Force
medical professionals in Europe paved the way with a highly successful
training program to optimize primary care within U.S. Air Forces,
Europe. We enhanced this program and adapted it for AFMS-wide primary
care optimization training. The result was our initial ``Quickstart''
training of some 800 personnel, including two primary care teams
(provider, nurses and technicians) from each of our medical facilities,
as well as representatives from our major commands (MAJCOMs).
The Population Health Support Division (PHSD) and MAJCOMs are now
providing follow-on support to sustain, refine and monitor
implementation efforts. We've also fielded formal policy, developed a
comprehensive PCO guide and implemented a course in population health
epidemiology to facilitate this initiative. Each medical facility is
fully vested in developing and implementing its PCO plan to ensure: (1)
Each enrolled patient knows his/her provider primary care team; (2)
Each primary care team knows the health care needs of their patients;
(3) Each primary care team provides evidence-based care; and (4) Focus
is on established performance measures.
To achieve these desired goals, our facilities are aggressively
implementing primary care manager (PCM) by name assignment. Knowing
which patients are assigned to which PCM, allows the PHSD to provide
demographics, preventive service needs, chronic disease burden, and
other essential information to PCMs for their use in designing
individual plans of care for each of their enrollees.
Through PCO, we've gained efficiencies in health care delivery by
restructuring our clinics, reassigning support staff to our PCMs, and
providing additional training to improve the skills of our enlisted and
nursing personnel. We're improving the effectiveness of our care by
adopting the U.S. Preventive Services Task Force recommendations for
clinical preventive services, the DOD/VA clinical practice guidelines
for disease/condition management and other evidence-based clinical
practices. PCO also requires that we measure ourselves against
nationally recognized standards for childhood immunizations, breast and
cervical cancer screening, and prenatal care in the first trimester.
And finally, because our primary mission is to provide a fit, healthy
and ready force, we've developed the capability to measure and
facilitate individual medical readiness as mandated by the Joint Chiefs
of Staff.
Through all of these efforts, we are steadily transitioning the
AFMS from a system of reactive sickness-based care to one of proactive,
prevention-oriented health care delivery. We are seeing real success,
especially within the PCO teams and between the teams and their
patients. The relationships are one of trust and understanding that are
reminiscent of the one-on-one care that we had from our hometown
doctors and their office staff. Our nurses, medical technicians, and
health service managers are now so much a part of the team and the
delivery of health care that many patients see them as their ``Doc.''
It's exciting for everyone involved.
Our optimization efforts have not gone unnoticed. A tri-service
team of functional experts, lead by the Department of Defense
Comptroller's Office, recently recognized the AFMS for the strides we
made in creating a cultural change thriving on efficient, quality
health care. In fact, many of our programs have been adopted for
implementation across the Military Health System. We are very proud of
this recognition, but we know our efforts to date are only the
beginning of what we can accomplish.
Optimization demands a relevant performance metric and measurement
system. The AFMS strengthened its performance metrics last summer. The
focus was on primary care--a key driver to any managed care program--
and the trends are positive. We used these results to not only identify
areas for improvement with respect to enrollment, provider productivity
and staffing, but to also prove the effectiveness of the many
optimization initiatives deployed to date. It's not surprising that,
given the success of this initiative, the tri-service performance
metrics subsequently introduced by OASD (Health Affairs) are almost a
mirror image of the AFMS metrics.
The AFMS is also working closely with OASD (Health Affairs), the
surgeons general of the Army and Navy, and senior leadership from all
three military departments, under the guidance of the Defense Medical
Oversight Committee. This combined effort is focused on studying
various alternatives leading to an organized, appropriately resourced
military health system meeting the health care requirements for today
and the future.

Keeping the ``Promise''
Fiscal year 2000 was the year of military health, with more than 50
initiatives pending in congressional legislation, and culminating in
the military medical legislation contained in the Fiscal Year 2001
National Defense Authorization Act. The Air Force joins our sister
Services in gratitude to Congress for helping us to meet our commitment
to our airmen, retirees and their family members.
We are especially pleased at the success of congressional efforts
to make TRICARE for Life a reality, restoring the full benefit to our
older retirees, and we hope to provide as many of them as possible the
quality health care they so richly deserve.
We are also delighted with other provisions of the National Defense
Authorization Act, such as the expansion of TRICARE Prime Remote to
include family members, the expansion of the National Mail Order
Pharmacy to all beneficiaries, the elimination of copayments for active
duty family members enrolled in TRICARE Prime, and a permanent
chiropractic benefit for active duty members, among other provisions.
While these exciting changes were evolving, we in the AFMS were
busy improving our services at the grassroots level. For example, we
are proud of our customer service improvements in beneficiary
assistance and claims processing. We now have Beneficiary Counseling
and Assistance Coordinators at every Lead Agent and medical treatment
facility (MTF). Our goal is to have them serve as the beneficiary
advocate and problem-solver, interfacing with the MTF staff, managed
care support contractors, and claims processors. Additionally, to
prevent claims problems before they occur, we simplified our process
and can now tout a claims processing turnaround time of 96.5 percent
within 30 days and submission rate by providers of 97 percent--removing
beneficiaries as the middlemen.
If we fail to properly process a claim, beneficiaries no longer
have to face the stress of resolving TRICARE-related debt by
themselves. A new DOD program established a Debt Collection Assistance
Officer at every Lead Agent and MTF to address notices or negative
credit reports due to unpaid TRICARE bills. With this single point of
contact, we will be able to identify how extensive the collection
problem is for our Air Force families and take all measures necessary
to resolve collection matters.
Another way the AFMS is proactively reaching out to its
beneficiaries is through our new Waiting Room Network (WRN). Recently,
the Air Force entered into a mutual agreement with a civilian company
to provide our stateside MTFs with a healthy lifestyle network
specifically designed for patients. This top quality commercial product
is being featured nationwide, with more than 20 million patient views
per month. In our MTFs, the WRN will allow us to make the best use of
the time our patients spend waiting for prescriptions and appointments,
time often wasted reading old magazines and watching daytime
television.
Busy providers will find that basic health care information, often
time-consuming to share effectively, and other educational programs can
be offered to patients via the WRN. What a great way to achieve our
goal of educating and empowering our military families to make the best
individual decisions about their life-styles and health care choices--
especially when they are a captive audience in the waiting room! In the
future, we hope to access the network for a small amount of time each
hour to pass along important information to our beneficiaries on AFMS
and TRICARE issues.
On Jan. 12, an agreement package was mailed out to each of our
stateside MTFs encouraging them to move quickly on deploying these
systems in the high volume waiting areas in each facility. We
anticipate the full network will be operational across our targeted
facilities by the summer. Added good news is that the AFMS worked hard
to make this a DOD contract, making it available to other federal
facilities who are interested.
No discussion on patient services would be complete without
addressing our partnership with the Department of Veterans Affairs.
Since the enactment of the DVA and DOD ``Health Resources Sharing and
Emergency Act,'' the Air Force community has strived to identify areas
to promote the sharing of resources between the two departments. The
Air Force continues to have numerous arrangements with the DVA, and we
presently have four successful joint ventures as well. The newest joint
venture, at Travis AFB, began in October. David Grant Medical Center at
Travis will provide inpatient services, same-day surgery, and
outpatient specialty services. Our other three joint ventures continue
with great patient satisfaction at Albuquerque, Las Vegas, and
Anchorage.
We continue to pursue a number of joint initiatives with the DVA to
improve mutual efficiencies. For example, The DVA and DOD are
participating in the National Patient Safety Partnership; DOD is in the
process of developing a reporting system based on the DVA model. We are
also partnering on the development of several new clinical guidelines,
such as redeployment health, substance abuse and uncomplicated
pregnancy.
An area we in the AFMS are particularly proud of is the VA
contracting partnership established by our Air Force Medical Logistics
Office at Fort Detrick, Maryland. This program, known as the VA Special
Services (VASS), offers a tremendous opportunity to reduce contracting
lead times, leverage buying power, and save big dollars in surcharge
and procurement costs--and the savings from this program can be
redirected to direct patient care. In fact, in fiscal year 2000, the
AFMS realized a surcharge savings of more than $1 million and a cost-
avoidance (money saved through DVA vs. a different contractor) of $7.75
million. This partnership is exactly that--a partnership--the AFMS
provides the infrastructure and the DVA provides the staff. It is a
true win/win, also saving money for the DVA as they reduce prices for
larger bulk contracts. We are always looking for new ways to partner
with our federal colleagues whenever it makes good sense for everybody,
especially the taxpayer.

Quality Care, Satisfied Customers
Quality care continues to be the hallmark of the AFMS. With all of
our facilities accredited by the Joint Commission on Accreditation of
Healthcare Organizations (JCAHO), the Air Force continues to meet or
exceed civilian scores. The average Air Force clinic accreditation
score is 97.0 percent (vs. 93.2 percent for the national average), and
our hospitals score at an average of 92.3 percent (vs. 90.7 percent for
the national average). In addition, we are very proud of the fact that
90 percent of Air Force military physicians who are board-eligible are
also board-certified.
We are committed to ensuring the quality of our care remains
exceptionally high. For example, Air Force personnel are vital
participants in the DOD Patient Safety Working Group to improve health
care by reducing medical errors and enhancing patient safety. Nellis
AFB Hospital, Las Vegas, Nevada, is a pilot site for the Patient Safety
Program. Eglin AFB Hospital, Ft. Walton Beach, Florida, developed a
Medical Team Risk Management Training Program that has been adopted as
a model for DOD and presented to the American Medical Association,
Veteran's Administration, and the 2001 TRICARE Conference. In addition,
Air Force Materiel Command has developed an innovative anonymous
medical error reporting system, which has provided promising data for
risk reduction strategies, and invested in pharmacy robotics for all
their facilities. Finally, the Air Force has three teams participating
in the Institute for Healthcare Improvement Patient Safety Breakthrough
Series. All of these complementary initiatives will facilitate
compliance with the Executive Order and National Defense Authorization
Act directions to decrease medical errors and improve patient safety.
These are all ways we are striving to put our patients first. And,
according to the DOD Customer Satisfaction Survey, our patients feel we
are succeeding! The latest results show 80 percent of the 20 top-rated
MTFs belong to the Air Force. At the recent TRICARE conference, we also
took the Satisfaction Awards in three of the five categories, as well
as the Access Awards in three of the five categories. But rest assured,
there is still room for improvement, and we will not rest on our
laurels.
In conclusion, we look forward to the exciting changes in the
delivery of military health care in the coming year, but continue to
emphasize our desire to be relevant to the health care needs of our
military family and reasonable as we address associated funding
requirements. We appreciate this committee's outstanding support in
these areas.
While it is truly our privilege to serve this great nation and our
pleasure to serve our patriots and their families in peacetime, let me
be clear that the two cannot be separated. The success of our medical
readiness in wartime or disaster will be the direct result of our
vigilance and commitment to excellence in the duties we perform in our
daily peacetime roles. There is still much work to be done.

Senator Stevens. Thank you.
General Peake.
General Peake. Chairman Stevens, Mr. Inouye, distinguished
Senators: We have had an Army Medical Department since July of
1975. It is a rich heritage and I feel truly honored to be here
as the fortieth Surgeon General of the Army. It is an exciting
time to get this job: a new century, breakthroughs in medicine
in things like genomics and information management and
technology in general that allow us really to know more about
our patients than we have ever known before; interesting in
terms of the threats around the world, interesting in terms of
the National Defense Authorization Act, which gives us an
opportunity to give improved services to our military members
and their families and to rebuild the trust with the retirees
who have served our Nation so well in the past.
It is an excellent benefit. It is one that we have heard
several times today about the importance of adequate and timely
funding if we are really going to see the promises of that
benefit come to fruition.
It is also important to recognize that we too have a
responsibility here in terms of making sure that we get the
best value out of this precious taxpayer dollar. We must and we
will get better at writing and managing our contracts. We must
and we will continue to optimize this direct care system of
ours.

MISSION

While it is important, it is not only for the peacetime
care that it is important. Our mission is much larger than just
peacetime care. In fact, it gives us the opportunity to
increase the robustness of our direct care system, to give the
satisfaction and quality of practice that comes from practicing
across the full spectrum of the age group of patients that we
are going to see in this, of having excellence in our training
programs that train not only doctors, but nurses and our
corpsmen as well and our medical technicians and so forth. We
need that population to be able to have those kinds of training
programs.
Further, it really establishes a sustaining base that
allows us to do all these other things, sending, deploying this
quality worldwide whenever the Nation needs it, wherever we
need to support our troops. It is things like Kosovo and Bosnia
and Kuwait and Honduras and Sinai and on and on where we have
our folks today. It is Arctic care that is going on today,
where we are dealing with ten outlying villages in the inner
part of Alaska. So it is more than just peacetime health care
that we are really talking about. It is appreciated and it is
needed.
If I could, I would like to read just three pieces of
correspondence, excerpts, that have come across my desk
recently. One is from----
Senator Stevens. Could you pull that mike a little bit
closer, General.
General Peake. Yes, sir.
One is from a sailor from the U.S.S. Cole who is relating
his experience coming through Landstuhl, Germany, our Army
Medical Center that is jointly staffed with the Air Force, by
the way. It says: ``Although the flight from Yemen was long and
arduous at times, you could see it in the eyes of your
personnel and we felt it in our hearts that we were safe and in
good hands. For me personally, it was like being dropped in the
arms of angels. Those who initially cared for me in the early
hours of October 12th for all practical purposes allowed myself
and my family here in Jacksonville to celebrate the joy of life
once again.''
The next is from an Army parent, someone, actually a career
officer who has now been selected for command, who wrote it on
the back of a critique sheet: ``If you ever need a family to
speak about the Army medical system, please call me or my wife.
My daughter had cancer at age 6. She is now 14. The radiation
caused a deterioration of her eyesight. We knew this would
happen. She is now 20-25 because of your eye doctors. There is
no way to put a cost on the care and concern your doctors have
given to our family. Doctors like Mary O'Hara are truly
angels.''
Finally, a note from a captain recruiter, a female officer
who was trying to find obstetrics care. Our recruiters, you
know, we put out in various places away from military treatment
facilities so they can build the force. So she is a member of
TRICARE Prime Remote, which is, fortunately, with National
Defense Authorization Act (NDAA) now expanded to active duty
family members. But she says she was having some trouble
finding an obstetrical provider:
``I have spoken with Mrs. Pat Margola at the Military
Medical Support Office--that is an assistance office--and she
has resolved the issue. I cannot thank you enough for taking
care of soldiers. It really meant a lot to me, my family, and,
believe it or not, my soldiers as well. We have all regained
faith in the system and in the chain of command.''

PREPARED STATEMENT

This is military medicine across the spectrum and why it is
important, just as you said, Senator Inouye. As General
Shinseki said, it is all about people and quality and trust. I
am proud to be a part of it and I really appreciate a chance to
be here today with you.
Thank you.
[The statement follows:]

PREPARED STATEMENT OF LIEUTENANT GENERAL JAMES B. PEAKE

Mr. Chairman and Members of the Committee, I am Lieutenant General
James B. Peake. I thank you for this opportunity to appear before your
Committee. It is my privilege to serve as the fortieth Army Surgeon
General.
This morning I would like to discuss the opportunities and
challenges that face the Army Medical Department. I will frame this
discussion in terms of the three fundamental components of our mission;
Projecting a Healthy and Medically Protected Force; Deploying a Trained
and Equipped Medical Force; and Managing the Health of the Soldier and
the Military Family.
As we look to the future, The Army Medical Department is in
synchrony with the Army Vision articulated by General Shinseki and we
are linked to the Transformation that will keep the Army relevant in
the 21st Century. His focus on People puts Army Medicine squarely in
the middle of our Army's Well Being Campaign, both as we promote the
health and provide the care for the force, but also in how we attract
the best for the Army Medical Department keeping the focus on the
quality that is a fundamental requisite. Initiatives that I will
discuss tie directly to the need to recapitalize the legacy force;
leverage current day technology to build the interim force, and to get
the right axis on research, science and technology to develop the
objective force of the future. The tenets of Army Transformation--
agility, versatility, and responsiveness--resonate throughout the Army
Medical Department today.

A HEALTHY, FIT, AND MEDICALLY PROTECTED FORCE

This simple statement understates the extent of what must be done
to be successful in this mission. Health is the absence of disease and
disability. It is not only the routine endemic diseases for which we
have a plethora of vaccines, but the uniquely military challenges such
as Adenovirus and the vaccine shortfall that we now have because there
is no commercial market. It is the Mental Health of our soldiers who
may be away from home for the first time, under physical and mental
stress either in training or on deployment. Health in relative terms
includes the mitigation of injury in a manner that is tied to fitness
for the mission. It is more than vaccines. It is education. It is
surveillance for patterns of illness and of the environment. It is
policy and procedures that all must be based on legitimate science. It
is all of these complementing one another to provide healthy and fit
forces.
Among the lessons learned by military medicine from the Persian
Gulf War is the importance of Force Health Protection and the need for
attention to it before, during, and after the deployment. It is the
leverage of information and information systems that will allow us to
take this core competency of Military Medicine and make major advances.
Ultimately, a longitudinal and queriable patient record will facilitate
this proactive approach. The Personal Information Carrier (PIC) in the
Army and the links to the Composite Health Care System II that we will
soon be fielding is the right axis of advance. The link between the
medical team in Bosnia and the redeployment site for the 49th National
Guard Division at FT Hood, Texas, was an example of how flow of medical
information could improve the processing of soldiers, insure that they
have the right kinds of follow-up and access to the medical care they
deserve, and there is a data base that can support the process.
We are doing some fundamental reorientation of Military Medicine to
emphasize proactive preventive services and the research to make
changes based upon science. At Fort Sam Houston, a focused program on
trainees entering advanced individual training has resulted in a marked
reduction in injuries in two different battalions. Brigadier General
Lester Martinez at the Center for Health Promotion and Preventive
Medicine has major thrust areas in injury prevention, smoking
cessation, women's health issues to name but a few. These efforts on
behalf of soldiers and their families will have direct applicability to
the civilian sector.
Casualty prevention runs across the life cycle of the soldier. It
includes personal protection that runs the range from sun screen-
chemical protection combinations, to ankle braces, to vaccines to
protect from biological weapons. But, personnel monitoring,
environmental monitoring, and comprehensive medical surveillance are
key to being proactive, not only to specific incidents, but to
developing the Science and Technology questions that must be pursued to
get us to the future. Control of environmental and occupational-health
hazards must be accomplished in austere battlefield environments with
tools and techniques that are strategically deployable. Battlefield
environments are quite different than industrial settings. It includes
providing safe food and water, and the knowledge and skills to deal
effectively with the industrial contaminants of the modern battlefield.
Sustaining a service member's health, in the field or at home station,
produces a far better readiness outcome than providing health care
after the fact of illness or injury.
The Army is also the executive agent for the Department of Defense
program to immunize all United States military personnel against the
grave and urgent threat of ``weaponized'' anthrax. The Anthrax Vaccine
Immunization Program began in March of 1998 for all military personnel
assigned, attached or scheduled to deploy to the 10 designated high-
threat countries within the Arabian and Korean peninsula. Our Anthrax
Vaccine Immunization Program Agency provided execution and management
oversight of over 1.9 million immunizations delivered safely to over
496,587 service members worldwide. 1,439 adverse events, mostly local,
temporary reactions, have been formally reported since March 1998. This
represents a safety profile similar to most common vaccines.
Each adverse event is reviewed by an independent committee of
national experts commissioned by our Anthrax Vaccine Immunization
Program Agency and represents an unprecedented level of effort to
ensure the health of our soldiers is protected.
The Federal Strategic Force Health Protection Initiative has been
staffed and synchronized with the Army, Department of Veterans Affairs,
and Department of Health and Human Services. This creates a nationwide
network of Department of Defense, Veterans Affairs and Federal
Occupational Health clinics that allows us to provide not only the
anthrax vaccination, but also medical and dental support to the Reserve
components within reasonable distances of individual members.
There has been recent and continued interest in the health effects
to our armed forces as a result of exposure to depleted uranium. The
health effects of depleted uranium have been studied for more than 50
years and, while this metal is slightly radioactive, its primary health
effects are from extensive exposure and due to its heavy metal
properties. The Army Medical Department has been assessing the health
and environmental risks from depleted uranium for decades; most
recently in support of Office of the Special Assistant for Gulf War
Illness exposure assessments for Gulf War Veterans. The Army Medical
Department has historically been the lead in responding to issues
concerning depleted uranium. The Army has implemented a training
program to inform soldiers about depleted uranium and its effects on
health and the environment. Only individuals in, on, or near armored
vehicles at the time of penetration by depleted uranium might exceed
United States peacetime safety standards for depleted uranium intake.
The health effects of depleted uranium are being assessed by the
World Health Organization, and the environmental levels of depleted
uranium in the Balkans and the resulting environmental impact are being
evaluated by the United Nations Environmental Program. Internationally
recognized Army experts have accompanied the field scientific surveys
and participated in the data analysis and formulation of the reports.
Additional information on depleted uranium is available on http://
www.gulflink.osd.mil.
Comprehensive Medical Surveillance entails the aggregation of data
from all elements of Force Health Protection to develop a picture of an
emerging problem or identify future research priorities or
countermeasures to better protect the force.
Personnel monitoring includes programs such as the Department of
Defense serum repository, pre- and post-deployment screenings, and
accurate record keeping to document all care provided--either on the
battlefield or in a fixed facility. Growing automation of medical
systems through such efforts as the Computerized Patient Record, the
Personal Information Carrier, and Medical Communications for Combat
Casualty Care will dramatically increase our ability to maintain
exposure and health-care records.
Environmental monitoring entails knowledge of potential health
threats in the air, water, and soil to which our service members are
exposed. A variety of sensors are under development for both medical
and non-medical monitoring of the environment that will allow us to
understand and predict the exposures of an individual soldier. Army
Preventive Medicine Units are currently assessing the occupational and
environmental health risks to our force in Bosnia, Kosovo, Kuwait and
numerous other locations throughout the world.
Thanks to the tremendous efforts of the prevention communities of
the Services' Medical Departments, most elements of Force Health
Protection are well in place. However, there is still work to be done.
Information systems are key enablers. Monitoring of the environmental
threat must be automated through the development of the Defense
Occupational and Environmental Health Readiness System, and its
integration into military deployments through the Theater Medical
Information Program and Medical C⁴I efforts.
Even as we enter the 21st century, many longstanding health threats
sadly remain: alcohol and tobacco abuse, injuries, and old diseases
with new faces, like tuberculosis and malaria. Clearly the research
axis in the Army's transformation is critical as we build the wellness
and Force Health Protection into the Objective Force.
Congress has entrusted the United States Army Medical Research and
Materiel Command with the management of many congressional special
interest research programs that will support this goal. The Medical
Research and Materiel Command, commanded by Major General John Parker,
ensures the sponsorship of meritorious science that can have great
benefit for the Department of Defense. The Department of Defense has
received high praise from Congress as well as the science and advocacy
communities for the administration of these programs. The science that
has come from these efforts has been remarkable.
Since the inception of the Breast Cancer Research Program, 2,290
awards have been made with fiscal years 1992-1999 funds and another 900
awards are anticipated using fiscal years 2000-2001 funds. The research
portfolio totals over $1 billion. The following products have been
reported by investigators and represent a measure of the program's
success: over 2,300 publications in scientific journals, 1,800
presentations at professional meetings, and 30 patent/license
applications. Tangible program accomplishments and outcomes directly
resulting from this funding have been in the areas of breast cancer
treatment and quality of life, environmental carcinogenesis,
angiogenesis, mammographic imaging, training, and infrastructure
enhancement. The outcomes of the research supported by this program
were reported back to the American public last summer during the very
successful Era of Hope meeting. There were 1,018 participants including
Breast Cancer Research Program research grant awardees, other renowned
scientists, health care providers and clinicians representing the
United States Army, Air Force, Navy, and Public Health Service. Over
100 news stories resulted from interviews with local and national news
media outlets. Over 20 interviews were broadcast live to local markets
across the country. Time magazine (June 26, 2000) published a one-page
article on the research funded by the Breast Cancer Research Program.
Most recently, the Army's contributions to breast cancer research were
highlighted in MAAM magazine (January 2001), entitled ``Three's
Company: The Army, Women with Cancer and the Medical Community have
Joined Forces.''
Since the inception of the Prostate Cancer Research Program, 295
awards have been made with fiscal years 1997-1999 funds and another 300
awards are anticipated using fiscal years 2000-2001 funds. The research
portfolio totals over $260 million. The Department of Defense Prostate
Cancer Research Program is supporting innovative, multidisciplinary
research to conquer prostate cancer. While the program is relatively
young, the diverse portfolio of funded research is making important
contributions to understanding the prevention, detection, diagnosis,
and treatment of prostate cancer. The research strategy designed by the
Prostate Cancer Research Program is yielding results that are ready for
clinical testing and application, thus aiding in the national health
effort to impact the well-being of all people.
The United States Army Medical Research and Materiel Command is
working in support of national cancer research priorities affecting the
health of all Americans. By emphasizing innovation in the
administration and conduct of research, major accomplishments in cancer
research have been realized.
The Volume AngioCAT Project is a newly conceived medical device
that could employ, simultaneously and in real time, several imaging
technologies to provide physicians with a new level of anatomic and
physiologic data. Advanced detection, before the onset of symptoms,
might be provided for such important disorders as atherosclerotic
cardiovascular disease (which leads to heart attack and stroke),
orthopedic disorders (arthritis, osteoporosis affecting a variety of
structures), or even infection and cancer. Such information might allow
aggressive new preventive interventions in patients where pathology was
``missed'' on routine physical examinations, thus maintaining a
healthier active duty and retired population. We have the opportunity
to study the value of such advances to determine if it offers real
benefit or just greater cost. The first prototypes of a Volume AngioCAT
will function in fixed facilities; however, the research may lead to
the development of units that could function in deployed environments
for rapid diagnosis of the injured warfighter.
The Disaster Relief and Emergency Medical Services program is
designed to leverage the resources at academic institutions to save
lives and reduce costs for injured persons in both the military and
civilian sectors. This project consists of three interrelated
components that tests interactive telemedicine technologies to treat
patients in both urban and rural settings. The diagnostic methods and
therapies component will treat patients who are unable to receive
advanced care quickly, and develop mechanisms to extend life beyond the
``golden hour.''
The Center for Integration of Medicine and Innovative Technology
last year yielded almost twenty-five cutting edge projects pioneering
minimally invasive therapies in diverse research areas as
Cardiovascular Disease, Cancer, Stroke, Trauma, and Critical Care.
Eighty-seven publications and reports were published; sixty-five
abstracts and presentations were done. The ``Enabling Technologies for
Medical Simulation'' project is developing the underlying technologies
essential to develop medical simulation training devices to train
combat medical personnel in trauma procedures.
The Combat Trauma Patient Simulation System program is developing a
system of digitized mannequins that realistically respond to wound
condition and medical treatment interventions as would the human body.
It will enhance initial and sustainment training for medical personnel
by simulating battlefield injuries by type, interventions and outcomes.
The diabetes project is a coordinated effort in the diagnosis,
management, and treatment of diabetes and diabetic retinopathy. A
diabetes center, the Department of Defense and the Department of
Veterans Affairs have joined in a cooperative effort to deploy and
evaluate this disease management healthcare model. By jointly
developing and implementing these research protocols, we are in a
position to move forward with a phased implementation of an evidence
based practice model that can be scaled for high volume deployment in a
resource efficient and cost effective manner at any identified site.
The scientific and support staff of the United States Army Medical
Research and Materiel Command, under MG John Parker, deserve special
recognition for their dedication and accomplishments.

DEPLOY A TRAINED AND EQUIPPED MEDICAL FORCE

General Eric Shinseki describes America's Army as ``Soldiers on
Point for the Nation--Full Spectrum Dominance--Persuasive in Peace,
Invincible in War.'' Facing the challenges of this new century, he has
begun the process of transforming the Army into a force that is
responsive, deployable, agile, versatile, lethal, survivable, and
sustainable.
Army medicine is integral to the capability and culture of the Army
and has undergone significant transformation to maintain its relevance
and value to the Army of the 21st Century. We are supporting Army
Transformation through the reengineering of the deployable medical
force, adoption of the best modern clinical and business practices, and
military medical research and development that is focused on the
protection of soldiers and care of combat casualties. We have focused
upon the training, leader development, and enabling of soldier medics
to operate independently and far forward with the highly mobile and
dispersed force they will support.
The Medical Reengineering Initiative will reshape our Corps and
Theater level medical systems to be more modular, flexible, and
strategically deployable to provide the capabilities needed for the
full spectrum of military operations. We have also worked hard to
reshape our support to division units and below. Additional medical
support, with a special emphasis on preventive health services, has
been placed closer to the combat soldier. Staying the course on Medical
Reengineering Initiative parallels the Army's transformation plan,
links directly to the recapitalization of the legacy force, and will
facilitate the medical support to Army modernization. It assures the
best possible Force Health Protection to the Army's most important
asset, its soldiers.
Medics in support enable the soldier to be on point for our nation.
In October 2001, soldiers will begin a 16-week training program at the
Army Medical Department Center and School to become more skilled and
competent medics in the 21st century. The newly created 91W Military
Occupational Specialty, Health Care Specialist, will merge today's 91B
Military Occupational Specialty, Medical Specialist and 91C Military
Occupational Specialty, Practical Nurse and provide additional skills
to meet the operational combat health-support needs of the future
battlefield. Training will be focused on emergency care, primary care,
medical force protection, and evacuation and retrieval. All medics will
graduate with National Registry Emergency Medical Technician
certification and be required to routinely revalidate their critical
medical skills. This major Military Occupational restructuring creates
an axis of advance into the 21st century for the combat medic.
Army graduate medical education programs provide the vast majority
of our military medical specialists. Our fully accredited programs are
among the best in the world. In a recent survey, the majority of our
specialties have a 100 percent board pass rate, with the overall pass
rate for all specialties at 87 percent. The programs produce a cadre of
highly trained and skilled soldier--physicians. Our programs remain
among the most effective means of recruiting and retaining quality
physicians. In addition to the full breadth of clinical skills, Army
graduate medical education programs are augmented with military unique
aspects of a given specialty, which prepares physicians for the
rigorous demands of practice in a wartime or contingency environment.
After completing graduate medical education, this highly skilled cohort
is among the most versatile group of professionals that can be deployed
at all levels within the theater of operations to support the medical
mission.
The value of integrating military unique curriculum within graduate
medical education programs to facilitate force transformation cannot be
overstated. When Department of Defense mandated the implementation of
the curriculum, there were no resources set aside to support training.
However, each specialty program director has taken advantage of
operational opportunities as well as formalized activities. Residents
receive orientations and lectures concerning war zone injuries, trauma
and military deployments. Additionally, they attend formalized training
including a centralized combat casualty care course, advanced trauma
life support training, medical management of chemical and biological
casualties and bushmasters course conducted at the Uniformed Services
University of the Health Sciences. Despite funding difficulties,
imaginative solutions are used to incorporate military training without
compromising training by deploying residents along with staff
physicians during actual deployments. Concurrently, residents
participate in medical readiness training exercises, spend time
assigned as a brigade surgeon and participate in field training
exercises where basic combat task training and testing is conducted.
Feedback from our residents and staff regarding the aforementioned
efforts has been very positive.
Medical evacuation of wounded and injured soldiers from the
battlefield has been the Army Medical Department's number-one priority
for modernization for several years. Clearing the battlefield serves as
a critical enabler for the combat commander, allowing him to
concentrate on the prosecution of the mission. Air evacuation is the
fastest and most flexible method, and the Army Medical Department has
been working with the aviation community to improve the UH-60 Blackhawk
and create a state-of-the-art evacuation platform--the UH-60Q. The UH-
60Q has an upgraded avionics package that improves situational
awareness for the pilots, and a reengineered interior treatment module
to facilitate enroute care for patients.
The Army Transformation Strategy requires a capable, recapitalized
Legacy Force focused on the Counter Attack Corps. The Armored Medical
Evacuation Vehicle is critical to the recapitalization of this Legacy
Force, is intended to replace the M113-series evacuation vehicles in
the Counter Attack Corps only. The Armored Medical Evacuation Vehicle
uses excess M2A0 Bradley Fighting Vehicles, that have the turret
removed and the roof squared off and raised 13 inches. This system will
provide the medical platoons and forward medical companies with a
ground evacuation platform that can keep up with the combat elements
they support while providing improved protection and on-board
capability and a common platform for maintenance for support.
Another Army Medical Department modernization effort is exploratory
work on the next generation of medical shelter systems. This effort is
looking at developing a family of rigid and soft-sided containers that
will facilitate strategic and tactical mobility while providing an
appropriate environment for surgery and intensive care. These shelters
will incorporate autonomous power generation and environmental control
and be wired for digitization. They will be capable of operating in
chemical and biological threat environments. Their multi-functional
design will allow for quick reconfiguration for multiple medical
applications.
To promote tactical mobility, the Army Medical Department is
working with the Transportation Corps to define medical requirements
for trucks in the Family of Medium Tactical Vehicles, or FMTV. The
FMTV-LHS consists of a truck with a pneumatic load-handling system that
will be used to transport current and future deployable medical
systems.
A major initiative in support of Army Medical Department
Transformation and Army digitization is the Theater Medical Information
Program. The Joint Theater Medical Information Program, or TMIP, will
let us phase out manual and stove-piped legacy automation systems and
replace them with a fully integrated, joint medical information system.
This is a critical enabler for Force Health Protection, automating the
documentation health care and health surveillance, managing logistics
and patient movement, and providing the situational-awareness for
medical planners to tailor medical forces and increase their span of
control. It will provide a common information environment for all the
military medical services that are continuous from the forward-deployed
medical elements to the sustaining base in the United States. One
Example is the automation of patient tracking through the
Transportation Command Regulating and Command and Control Evacuation
System (TRAC²ES) is essential for coordinating and
synchronizing the movement of military patients throughout the Military
Health System in both peacetime and in war. Transportation Command
Regulating and Command and Control Evacuation System will permit
casualty tracking throughout the battlefield, and provide in-transit
visibility of casualties. At the same time, it will speed the strategic
movement of patients to the bed with the right capability to care for
them.
The Army will implement the Theater Medical Information Program
through the program Medical Communications for Combat Casualty Care.
This major acquisition program will build and support the Theater
Medical Information Program infrastructure and provide the necessary
integration with Service and joint command and control and combat
service support systems.
Using new technologies, digitization, and enhanced mobility to
achieve a lighter, faster, more responsive medical capability will
ensure that military medicine is there to support the deployed service
member

MANAGE THE HEALTH OF THE SOLDIER AND THE MILITARY FAMILY

When I speak of ``managing care'', it can get caught up in the
rhetoric of a focus on shareholders rather than our patients. It is the
soldier and the soldier's family for whom we exist. It is the quality
of their care, their trust in our system, their satisfaction with their
treatment whether for the soldier on a battlefield or their families in
all the places we send them across the United States and around the
world, that is our ultimate grade. Managing in this context means the
right care by the right provider at the right time; care delivered
efficiently and effectively without ``hassle''. This has been
reaffirmed by Congress with the generous medical programs in the
National Defense Authorization Act this last year. It has been
reinforced by the Army Leadership as Well Being has become a major
thrust in the Army's Transformation.
I sit before you with my fellow Surgeons General. We cannot provide
outstanding managed care without working closely together. Each of us
have a responsibility to support the warfighters of our own service; to
cover the unique environments and cultures that gives us the best Army,
Navy, and Air Force in the world. But in the business of managing care,
we share a common passion for quality, for the improved and sustained
health of our military families, and the links to those retirees who
have served this nation in the past.
TRICARE is the program that provides the military health care
benefit for 8.1 million eligible beneficiaries throughout the Military
Health System. TRICARE brings together the health care resources of the
Army, Navy and Air Force and supplements them with networks of civilian
health care professionals to provide better access and high quality
service while maintaining the capability to support military
operations.
A majority of the beneficiaries receive most of their care from the
military treatment facilities that are part of the Direct Care System.
During the drawdown in the early 1990s, the Army Medical Department
shrank by 34.5 percent, commensurate with the rest of the Army. The
number of eligible beneficiaries only declined by 13 percent. This
created a large gap between the capacity of the Direct Care System and
the needs of the beneficiary population. This also created the
requirement for our Managed Care Support Contract Partners.
Since 1995, the TRICARE Management Activity, representing the
Department of Defense, has awarded seven contracts to 5 different
contractors to provide health care in all 12 administrative regions of
the United States. These contractors build civilian managed care
networks within their region(s), handle claims processing and augment
the Direct Care System as needed at the local military treatment
facility level. This has been an effective but expensive partnership,
partly because, with our downsizing and changes in cash flow, we have
seen care shift from care we can deliver to care we purchase through
the contracts.
One of my top priorities as Surgeon General is to optimize the
direct care system. Optimization is essential to improve access and to
control the costs of health care across the Military Health System.
Increased efficiency is even more important with the recent passage of
the National Defense Authorization Act for Fiscal Year 2001, which
enhances the health care benefit for the military family. I have
charged our Regional Medical Commanders with optimizing the
productivity and utilization of our hospitals and clinics consistent
with sound business practices. This means insuring adequate support
staff supports the clinician, it means making the physical improvements
needed to increase efficiency. I am not asking for a wish list, but
rather for business plans that will clearly identify the payoffs for
this investment. This type of targeted investment of resources in
support of the direct care system is overdue. Successful optimization
will decelerate the rising cost of health care. In time, it will
relieve pressure on the services' Program Objective Memorandums and
reduce diversion of funds to the Defense Health Program, while
improving customer relations and patient satisfaction.
In October 2000, optimization began in the Northwestern TRICARE
Region (Region 11). The Lead Agent has been given expanded authority to
allow for better decision-making. Success in Region 11 Pilot Program is
of the highest priority and will lead the way in transforming the way
that we do business across the Military Health System.
But, Region 11 is not the only place striving for innovative ways
to improve quality and efficiency. While there are many success
stories, the following cases demonstrate the fiscal opportunities our
medical treatment facilities can execute.
--Tripler Army Medical Center in Honolulu, Hawaii, provides an
example. The $3.5 million business plan initiative investment
implemented several years ago targeted the replacement of
certain resource sharing agreements that were not cost
effective with medical treatment facilities staff. The
elimination of these agreements not only returned $1.1 million
in annual cost savings to the Government after the contractual
bid price adjustment, it also provided the medical treatment
facilities with greater flexibility in providing health care to
the active duty as well as other non-CHAMPUS beneficiaries.
Tripler Army Medical Center also plans to initiate a satellite
pharmacy at the new Navy Exchange on the island of Oahu. The
satellite pharmacy initiative currently being proposed is
focused on reducing the managed care support contractor's
claims for prescription drugs in an effort to risk share the
cost savings this joint venture will achieve. Preliminary
estimates project 30 percent to 40 percent savings in the
contractor's retail pharmacy costs that we will risk share
through the bid price adjustment process. Since the contractor
has returned funding to the Government at each bid price
adjustments for the TRICARE Regions 9/10/12 managed care
support contract, this initiative should reinforce the positive
cash flow to the Government.
--Darnall Army Community Hospital in Fort Hood, Texas, initiated
several business case initiatives last year focused on
providing the full continuum of health care to their Prime
enrollees at the military treatment facility by minimizing the
need to purchase care from civilian sources. The military
treatment facility is also proposing additional recapture
opportunities this fiscal year to continue their health care
commitment. The scope of their initiatives range from increased
staffing to minor facility modification in their endeavor to
maximize military treatment facility capabilities to a full
potential. A few examples follow:
--The obstetrics business initiative increased military treatment
facility staffing for certified nurse midwives and support
staff to maintain existing Obstetrics workload in-house.
This enabled the recapture of 40 deliveries per month that
had been previously disengaged to the civilian network. The
investment of $1 million has a projected return of $2.3
million and cost avoidance of $4.7 million.
--The internal medicine business initiative increased military
treatment facility staffing for civilian internists to
replace lost military physicians. The investment of $417
thousand has a cost avoidance of $1 million.
--The orthopedic business initiative will add a civilian physician
and support staff to the military treatment facility. The
investment of $400 thousand has a projected recapture of
$817 thousand in orthopedic claims currently in the
civilian network.
--The satellite pharmacy initiative currently being proposed is
focused on reducing the managed care support contractor's
claims for prescription drugs in an effort to risk share
the cost savings this joint venture will achieve. As part
of the resource sharing agreement the government would fund
the facility modification costs for a satellite pharmacy to
be located at the Fort Hood local Post Exchange. The
contractor would provide pharmacy staffing to dispense the
prescriptions and funding to procure the pharmaceuticals
through government sources. A preliminary study of the top
drugs prescribed in the civilian network projects an
estimated 150 percent savings by using the Federal Schedule
pricing versus average wholesale price for pharmaceuticals.
--Madigan Army Medical Center in Fort Lewis, Washington, has recently
implemented a multi-faceted approach towards increasing their
inpatient ward and surgical capabilities as part of the TRICARE
Region 11 Lead Agent Pilot Demonstration. By increasing their
military treatment facility staff, they plan to increase their
average daily inpatient census from 123 to 133 and expand their
average daily operating rooms from 9 to 11. The Lead Agent's
goal is to optimize the Military Health System and reduce
purchased care costs currently borne by the government and the
managed care support contractor in Region 11. Based on the
time-phased investment plan, the region projects a $7.2 million
overall return on investment.
--Evans Army Community Hospital in Fort Carson, Colorado, has
submitted a business initiative to expand their military
treatment facility orthopedic staffing. Their goal is to
realign the administrative Medical Board responsibilities from
the military physicians to a physician assistant, orthopedic
technician, and nurse. The reengineering process will avail the
military physicians for direct patient care and surgical
procedures at the military treatment facility. This action has
the potential of recapturing a moderate amount of orthopedic
civilian purchased care claims for a relatively low investment
cost. Preliminary analysis estimates an annualized cost savings
to the Government of $250 thousand after risk sharing with the
managed care support contractor.
--South East Regional Medical Command (SERMC) has submitted a
business initiative that will enhance the management and
efficient use of our military and civilian hospital physicians
by reducing data entry requirements and improving patient
documentation accuracy. The initiative proposes the use of
voice dictation equipment and coding staff to increase provider
productivity by four appointment template spaces per day. The
increased appointment templates have the potential of reducing
active duty and CHAMPUS-eligible referrals for purchased care,
which will decrease supplemental care and managed care support
contract costs at each bid price adjustment. Additional
intangible benefits are improved quality of care, greater
billing accuracy for Third Party Reimbursements and Joint
Commission on the Accreditation Healthcare Organization
compliance.
Walter Reed Army Medical Center Washington, D.C. also initiated
several business initiatives last year focused on increasing the volume
and complexity of medical cases treated to strengthen its graduate
medical education programs. The investments improved provider support
staff ratios from less than 1 support staff per provider to more than
2. The actions also increased civilian nurse salaries in order to
better recruit and retain nurses in a highly competitive labor market.
Early results have been favorable; not only has the complexity of the
average inpatient disposition, measured by case mix index, increased by
more than 7 percent, but both outpatient and inpatient workload has
increased by nearly 10 percent. The long-term impacts of these
investments go beyond the graduate medical education programs and
should become evident over the next several fiscal years. The increased
capacity in the military treatment facilities should reduce the cost of
our TRICARE contracts and competitive salaries for civilian healthcare
employees will improve our ability to recruit and retain the best
personnel in a dwindling labor market. A final benefit of the
investment is improved staff and patient satisfaction.
There are systems issues also that contribute to this optimization.
The Army Medical Department has been at the forefront of the Department
of Defense in reengineering supply chain management, leveraging into
strategic partnerships with the Military Services, the Defense
Logistics Agency, and the Department of Veterans' Affairs to increase
purchasing volume and obtain the best value. We have also invested in
technologies such as Digital Imaging Networks, Point of Use systems,
and pharmacy robotics to improve productivity, accuracy, and cost
accounting. The Army Medical Department has embraced acquisition reform
and electronic commerce initiatives to reduce paperwork, improve
responsiveness, and enhance delivery of the healthcare benefit.
The expanded pharmacy benefit beginning April 1, 2001, will include
improved access to a wider variety of appropriate and cost-effective
medications through the National Mail Order Pharmacy and the TRICARE
retail pharmacy network with minimal co-pays. Beneficiaries who utilize
the military treatment facility pharmacies may continue to do so with
no out of pocket expense. The act further authorized access to non-
network pharmacies with an annual deductible of $150 and a co-pay of $9
or 20 percent per prescription, whichever is greater. Where we can
bring this work back into our system, we will benefit from our
favorable pricing.
Effective October 1, 2001, eligible beneficiaries who continue to
receive medical care from their current Medicare providers will have
TRICARE as their second payer. TRICARE will pay their out-of-pocket
costs for services covered under Medicare. In addition, they will have
access to benefits that may not be covered by Medicare. To participate,
beneficiaries must be eligible for Medicare Part A and enrolled in
Medicare Part B. This is a step in the right direction towards keeping
faith with our most senior retirees. Where we can leverage the existing
infrastructure of the direct care system by covering the marginal costs
of caring for this expensive class of patient, we will save the
taxpayer's dollar and protect an ever dwindling Medicare trust fund.
We continue to pursue the Information-management systems that are
essential enablers for optimization. We are scheduled to begin
deploying the Composite Health Care System II that augments the
capabilities of Composite Health Care System I this summer. After a
prolonged and exhaustive redevelopment process characterized by
superlative collaboration between technical and functional experts,
Composite Health Care System will provide a legible and readily
available computerized patient-record system that will be shared across
Composite Health Care System hosts. Through it, providers will be
linked to laboratory, pharmacy, radiology, and other services. By
eliminating duplication of effort in record input, it will facilitate
interaction between providers and patients.
Additionally, Composite Health Care System II will support best
business practices, medical surveillance, and clinical research by
permitting rapid data query on individuals and populations, which will
supply critical information to providers from treatment room to Army
Medical Department headquarters. Composite Health Care System II will
be the heart of cutting-edge health services and will provide support
to optimization across the Military Health System. Early success in
optimization is critical to sustaining the Military Health System
business reengineering momentum. However, neither optimization nor any
other improvement in health services delivery can be accomplished
without quality healthcare professionals. Recruiting and retaining
quality medical personnel is a major concern of the Army Medical
Department leadership.
The civilian health-care industry is very attractive to our mid-
term officers, enlisted personnel, and civilians. We need to find new
ways to compete with the civilian health care industry. We need
additional incentives and benefits to attract and retain quality
people. Most importantly the quality of practice that comes from
adequate support staff, quality facilities and a full spectrum of
patients where the patient is the focus of the effort are the factors
that will attract and keep our quality people on our team.
Special pay authorities are becoming inadequate to provide
sufficient incentive to meet aggregate end strength needs. Special pay
rates have remained fixed (in dollar amount) since 1990, resulting in a
climate of devaluation. This devaluation is impacting on the Army
Medical Department's ability to retain the right number and specialty
mix of qualified clinicians in the long-term. To that point, the
military Surgeons General have requested the Flag Officer Review Board
at the Office of Assistant Secretary of Defense, Health Affairs to
evaluate and develop Legislative proposals which will address this
issue in the fiscal year 2003 Unified Legislative and Budgeting
process.
These proposals will serve to increase special pays for physicians:
variable, medical additional and incentive special pays; board
certification pay and multiyear special pay. The dental variable and
additional special pays; board certification pay, dental officer
multiyear retention bonus, and the dental officer accession bonus. Also
proposed increases in the optometry, veterinary and pharmacy special
pays; nonphysician and diplomat board certification pays; nurse
anesthetist incentive special pay; and the nurse and pharmacy accession
bonuses. The increases approved in the ULB process will be submitted
for inclusion in the President's Budget for fiscal year 2003.
In the National Defense Authorization Act for Fiscal Year 2001
there is a new Critical Skills Retention Bonus. The Department of
Defense is pending implementation of this bonus to provide a financial
incentive to positively influence retention decisions of members in
designated critical specialties with manning shortages or skill
imbalances, and high training or replacement costs. It is the Army
Medical Department's desire to use this bonus as soon as available and
appropriately funded, to pinpoint our potential and known critical
specialist retention shortfalls.
A 1996, Office of the Chief, Army Reserve, Study found job
insecurity to be the primary problem that adversely affects retention
and mobilization. Eighty-one percent of the 835 U.S. Army Reserve
physicians surveyed responded that they could mobilize for up to 90
days without serious impact to their civilian practices. Therefore, the
Assistant Secretary of the Army (Manpower and Reserve Affairs) signed a
policy initiating a test program to limit the involuntary mobilization
period for Reserve Component physicians, dentists and nurse
anesthetists to 90 days.
The test program will be evaluated at the end of three years to
determine its effectiveness for recruiting and retention. The Office of
the Surgeon General will report findings to the Assistant Secretary of
the Army (Manpower and Reserve Affairs) by September 30, 2002, with a
coordinated recommendation as to whether the 90-Day Rotation Policy
should be continued and expanded to other specialties.
There have been major adjustments to the Defense Health Program
since submission of the fiscal year 2001 President's Budget. Congress
passed an emergency supplemental appropriation of $1,311 million in
fiscal year 2000 which was used primarily to fund prior year contracts,
contract claims, and private sector care fact of life changes. This
past summer's program review resulted in a fiscal year 2002 Program
Decision Memorandum which provides an additional $593 million to the
Defense Health Program primarily for private sector care. Despite major
adjustments to the Defense Health Program there are still critical
funding requirements.
Efforts have begun to address the fiscal years 2002-2007 impact of
new health care as legislated in the National Defense Authorization Act
for Fiscal Year 2001. Work is underway to establish the Department of
Defense contribution to the Department of Defense Medicare-eligible
Retiree Health Care fund and to make necessary fiscal adjustments to
implement accrual financing procedures for financing the Medicare-
eligible retiree benefit beginning in fiscal year 2003. These actions
do not, however, address any fiscal year 2001 funding implications of
the National Defense Authorization Act for Fiscal Year 2001. The three
services with TRICARE Management Activity and the Department of Defense
(Comptroller) are working the shortfall issues with the Defense Medical
Oversight Committee.
I am concerned that past and future funding problems in medical
facilities inventory may contribute to reduced quality of care, and
hamper our effort to transform, modernize and optimize the Army Medical
Department. Continued problems in funding of funds to support
maintenance, repair, and modernization of aging inventory may
increasingly lead to systems failures that result in death or injury to
patients; disrupt the normal delivery of health care services; risk
regulatory compliance; lead to a less professional patient care
environment; and significantly increase future repair requirements and
costs. The condition of our facilities will become a quality of life
issue that may affect recruitment/retention. Our challenge is to
overcome the effects of long-term neglect and low funding levels which
continue to degrade our facilities. Substandard medical facilities will
adversely impact our ability to deliver quality health care within the
Military Health System while increasing total major repair costs, and
ultimately the total cost of military healthcare.
The average annual funding level is $68.4 million for new
construction (0.89 percent Plant Replacement Value). These funds are
required to modernize our aging facilities and minimize chronic and
expensive repair problems. This level of funding in this account
results in a 125-year replacement cycle for the Army's medical
infrastructure. Any construction funding shortfalls burden the
shrinking maintenance and repair budget through expensive repairs of
failing systems. Specific major construction projects requiring
attention include the Armed Forces Institute of Pathology, the Medical
Applied Instructional Facility, and the Center for Health Promotion and
Preventive Medicine.
Army Medicine is more than an HMO. Our system of integrated care,
teaching medical centers to outlying health clinics, school house to
research and development, form the base for supporting The Army across
the world and across the spectrum of conflict. We do that quietly and
on a daily basis as we field the TOE force, engage with both active and
reserve forces, and respond to my Chief's vision of our Army's role in
alleviating human suffering.
There are approximately 1,400 Army Medical Department personnel
currently deployed in 20 countries in support of Smaller Scale
Contingencies and Peacetime Engagement Activities. In the European
Command area of operations, approximately 700 Army Medical Department
personnel provide medical support to Operation Joint Forge and Joint
Guardian, conduct MEDFLAG's in Africa, MEDCEUR's with Partnership for
Peace nations, and conduct humanitarian assistance missions in Kosovo,
as part of Operation Provide Hope. In the Southern Command area of
operations, approximately 150 Army Medical Department personnel provide
medical support to Joint Task Force-Bravo, and provide medical care to
specified host nation countries under the Medical Readiness Training
Exercise program. These activities serve to enhance the Southern
Command theater engagement strategy in various countries within the
area of Operations.
In the Pacific Command area of operations, Army Medical Department
personnel mainly engage in and support exercises in preparation for
their wartime missions. Deployed numbers vary depending on the size of
the operation. Other activities include Preventive Medicine Support in
the area of responsibility; Veterinary support to Thailand, Vietnam,
and Singapore; and medical support to Joint Task Force Full Accounting,
which serves to search for and identify remains of missing servicemen
from the Vietnam war. In the Central Command area of operations, there
are approximately 250 Army Medical Department personnel deployed to
provide medical support to Operation Desert Spring (standing Task Force
support in Kuwait and Saudi Arabia) and Operation Northern Watch
(support to on-going operations in Saudi Arabia which provide oversight
to Iraqi aircraft engagements.
Other medical support activities engage in exercises that provide
preparation for their wartime mission, and conduct reciprocal medical
training between the various countries within the area of operations.
These operations serve to enhance the Combatant Commander's theater
engagement strategy by enhancing military to military working
relationships through medical activities. In the Joint Forces Command
area of operations, an average of 300 Army Medical Department personnel
are deployed to provide medical support to the various Combat Training
Center rotations, and other special interest events within the
Continental United States. In addition, Army Medical Department
personnel are actively engaged in planning the medical support to home
station mobilization for the 29th Infantry Division (Army Reserve
National Guard) and other reserve component units deploying to the
Balkan region.
United States Army Reserve Component medical units make up over
sixty percent of the Army Medical Department's total deployable forces
and are an integral and vital part of the Army Medical Department's
mission capability. Our medical reserve components are being mobilized
at a greater rate than at any other time in recent history. The Army
Medical Department, as part of today's power-projection force, is
different; we can only accomplish our mission using a mix of Reserve
and Active Component forces.
This year has marked some important milestones in the progress
toward more effective integration of the Active Reserve Component
medical forces. For example, today, in the Balkans, the United States
Army Reserve is responsible for providing many of the units that, in
conjunction with selected Active Component units, are deployed to
comprise the medical task forces supporting our mission in that region.
The Army Medical Department has also activated two reserve multi-
component medical units, at Fort Sam Houston and Fort Meade, to
increase unit readiness through blended resources. We have instituted a
program of Active Component/Reserve Component individual personnel
resource sharing, utilizing our Professional Officer Filler, to allow
one component to fill readiness requirements within another component's
unit assets.
Army Medicine has been a part of our Army since July 1775. It has
produced giants of American Medicine, it has advanced the science that
benefits us all, it has expanded for World Wars, it has linked to the
American People through the care of their sons and daughters. This
month we celebrated the 100th Birthday of the Army Nurse Corps. Next
month we will celebrate the 90th Birthday of the Dental Corps. As long
as we have men and women defending this country our value set as a
Nation demands a quality medical force to support them. I would like to
thank this Committee for your continued commitment and support to
quality care for our soldiers and to the readiness of our medical
forces.

TRICARE PAYMENTS

Senator Stevens. Thank you very much, General. I do not
want you to take my comments as being critical, but I am
worried about the cycle that we see right now. It is my
understanding that there has been a settlement now and the
terms for TRICARE have been renegotiated for the period from
fiscal year 2002 to 2007 and that the net result of that
negotiation has increased the shortfall in the predicted
funding from $6 billion to $20 billion.
We provided $1.3 billion in the emergency supplementals for
the Department in 2000, as I said. $696 million of that was for
the direct care and $616 million for TRICARE. But it is my
understanding that the settlement for TRICARE has used a
substantial portion of the amount of money that we thought we
were providing for direct care.
So I want to ask you some sort of pointed questions. Do you
think that we made a mistake by closing too many hospitals,
military hospitals? Are we reducing the defense military
medical staff down to the point where we are over relying on
TRICARE providers? Do we have the control in the future over
the cost for TRICARE that we should have as compared to the
controls we have over the direct care providers in our
hospitals?
Do you see the same problem that we see, at least I see, in
terms of the way we are dealing with TRICARE and direct care
now? It seems that you are paying TRICARE first and then the
direct care. If there is a shortfall, that falls on the direct
care providers. That seems to be in reverse. What we need in
the event we ever have an emergency, God forbid, is we need the
direct care providers. We are not going to be able to send
TRICARE providers overseas somewhere.
Our main task should be to maintain a robust system of
direct care. It seems to be slipping back every year so that
more and more is going to TRICARE. Am I wrong?
Admiral Nelson. I share your concern, Mr. Chairman. Mr.
Chairman, out of the $1.3 billion supplemental last year, the
direct care system of Navy medicine got $52 million of that in
2000. I think all of it or all of our part of it for 2001 went
to the contracts.
Senator Stevens. I am informed that you got $52 million,
the Army $58 million, and the Air Force $38 million, but we
thought that you got $696 million. That money went to the
TRICARE settlement, and the future settlement is even more
extended as far as the obligations for TRICARE in the future.
I am not opposed to TRICARE, but I think we ought to find a
system whereby we provide as much as possible of the medical
care for the military through the direct care system, that will
maintain our military medical system in the event of a crisis.
Admiral Nelson. One of the issues that you raised and that
the three Surgeon Generals (SG's) have argued each of the last
3 years is pay the direct care system first, give us a
predictable, stable budget and then let us hold the deficit
against contracts if there is a deficit, and let us try to
optimize our system with good investments, good business
decisions, to take back as much of the care that has gone to
civilian contractors as we can.
It has been shown that we can do it less expensively. But
that has not been the direction that has been pursued.
Actually, I have watched for the last 3 years that my available
resources have dropped through out the year. Resources not only
started out low but dropped through the year. This year, right
now, I am sitting right on the line of not having an executable
budget.

TRICARE EXPENDITURES

Senator Stevens. Well, it bothers me. We know that TRICARE
expenditures must be paid because people go to court or go into
some proceedings. You will have additional costs, attorney's
fees, etcetera, if you do not pay them. On the other hand, it
seems that, now that we have negotiated out to 2007, it is
predictable that there is a shortfall in that system. The
contracts have already been signed and I am sure once we sign
contracts that TRICARE is going to be used right up to the top
dollar.
But that is coming right out of the direct care costs, the
direct care allowances. Would it help you all if we had two
separate appropriations, one that had to be used for direct
care and one that was available for technology?
General Carlton. Yes, sir, it would. Your observations are
right on the money and your dollar amounts are exactly right.
We got 10 cents on the dollar on the supplemental that was
directed at the direct care system. We have written bad
contracts, we know that. We are in the process of trying to fix
that. We are in the process of looking to say, have we set this
whole thing up correctly through our Defense Medical Oversight
Committee.
But the problem is deeper than that. The problem in the
country is that we have no flexibility now to surge in the
country, not away from the country in a wartime scenario, but
no capability to surge in this country if we have a mass
casualty. I believe the military is going to get called very,
very quickly if we have a mass casualty of any sort, whether it
is chem-bio or simple trauma, and a robust military medical
capability is one way and one way that is very clear to assure
the national safety.
So your comments are exactly right on.
Senator Stevens. I am really worried, because the net
result of what I see is a catastrophe, and the people that get
pushed aside are the retirees and the veterans and those who
are really not on active duty, and that in effect will be
breaking our promise again.

SHORTFALL

We have closed too many military hospitals. I wish someone
would make a study of those hospitals, why we did that. I do
not know why. I know we closed the bases, but you did not have
to close the military hospitals when you closed the bases in my
judgment. I hope that, somehow or other, that you gentlemen,
you have the experience and we do not, but from where I sit the
problem is you are paying those bills first for TRICARE.
We look now at a funding level for 2001 and I am told that
the Secretary's office has identified a $1.4 billion shortfall
again, and we are going to face the problem of what we do when
the supplemental comes up with regard to that. Everyone around
here is really cautious about talking about supplementals. Some
say we are not even going to have one. What I see, what we see
in terms of funding, not just in your department but many, is
we have been funding on the basis that there will be a
supplemental.
I fault the last administration for that and the process
that we have all followed. But right now I do not know how to
play catch-up. I would love to have your guidance in trying to
find some way to do that. I do not see how you can execute the
2001 program now unless we give you a supplemental for the
balance of the year some time along the line. Do you agree with
that?
Admiral Nelson. Yes.
General Peake. Sir, I agree with that. I think you are
exactly right in terms--if I could answer first with the notion
of have we closed too many hospitals and that whole notion that
we could take, potentially take care of everybody within the
direct care system. I do not think that we could do that. The
Army Medical Department is down about 34.5 percent from what it
was in 1989. That is about a thousand-plus less doctors than we
were in 1989, about a thousand-plus less nurses than we were in
1989.
Our whole Army came down about 36 percent during that time,
but the patient population came down only about 13 percent and
now slightly heading back up.
We will have to leverage, I think, sir, the civilian
industry somehow to be able to meet our obligation to these
people, to the over 65 now that really becomes a bigger number.
I think we need to figure out how to do that. You talk about
two separate pools of money. I worry about that a little bit,
because then you start saying, well, who is the manager of this
system.
Senator Stevens. I better talk about it some other time. I
yield to Senator Inouye, but I will say I do not see enough use
of reservists and National Guard personnel in your direct care.
I think the total force, they are over there in terms of--we
are just back from Europe. The National Guard is over there in
several places on active duty and I do not see that there is
the same assistance to total force coming from the guard and
reserve as far as your part of the defense structure is
concerned.
Senator Inouye.
Senator Inouye. Mr. Chairman, I want to commend you for
bringing up this matter, and also Senator Domenici, for
bringing up the matter of TRICARE. We are just seeing the
initial problems both of you have referred to. I believe there
are 8 million eligible, is that not right?
General Carlton. Yes, sir.
Senator Inouye. We are currently dealing with about 3
million people in TRICARE at the present time?
General Carlton. Perhaps a little bit higher, but close,
yes, sir.

FUNDING SHORTFALL

Senator Inouye. If we are having all the problems with just
3-plus million out of that 8 million, what happens when we will
be responsible for the care of 8 million people?
General Carlton. I think we face a bigger bill in the out
years, yes, sir.
Senator Inouye. So the problem that my chairman has noted
is something that, we do not have a solution for, even though
we know the problem exists. I hope that the surgeon generals
will be able to come up with some useful recommendations.
It would be a drastic step to require two separate funds in
order to solve this problem, but that is how far we have gone
in thinking of how to help.
The matter of underfunding that Senator Domenici brought up
has been a major concern to us. You have your mission of
readiness, and your mission of providing health care to
millions of patients, but then we find that each fiscal year
when judgment day approaches you are underfunded.
Now, I know what you have done, but for the record can you
tell the public what steps you go through in order to make up
for that underfunding and still provide patients the care they
need.
Admiral Nelson. You are asking, with the current shortfall,
how will we manage the year without a supplemental? There are
several issues involved and let me address them step by step,
if I might. We have heard the two figures, $1.2 billion and
$1.4 billion. The issue that worries me about $1.2 billion is
that for the three medical departments of that $1.4 billion
there is only about $200 million in the request for
supplemental for the direct care system. $1.2 billion
potentially leaves us off the board.
Now, I say that a little bit in jest, but not entirely,
because my concern is the direct care system is hurting. Now,
there is the recognition, and it has been validated by the
Defense Medical Oversight Committee (DMOC), that there is a
requirement for $161 million 1 April to start a number of the
initiatives that are in the NDAA. If there is not another
source of funding found for them, it has been suggested that it
will come out of the direct care system.

SHORTFALL

My portion of that would put me in a position that I would
have to take very drastic measures, and I hesitate to say them
out loud, but I would have to look at furloughs, I would have
to look at changing access to pharmaceuticals. I would
completely stop maintenance and repair dollars. I would have to
make up in the neighborhood of $50 million out of a budget that
is already--we already are looking at $8 million below what we
call executable. I have got to make that much up already.
So it is a very uncomfortable year for Navy medicine.
Senator Inouye. Anything in the Air Force?
General Carlton. Yes, sir. What we would do, as we have
done for years, which is driving this huge managed care support
contractor, is offload to the managed care support contractor,
and then we see it at some multiple of price, but we do not see
it for a year or two. There is nothing left in construction, in
real property maintenance. Our equipment is literally well
beyond its life expectancies. Our facilities are falling down.
We cannot absorb if there is no supplemental. This
profoundly--you have hit it on the head. This profoundly
affects retention, recruitment, satisfaction. It is no wonder
that among all of our corps our retention and recruitment are
down. People are concerned that we do not have a viable program
for the future.
So you hit the nail on the head, sir, where we must
establish a reliable, modern system. We must then recognize
that the world has changed. With the National Defense
Authorization, we are in a competitive group. If we do not
provide excellent service, then we will pay for it some other
way at much higher costs.
General Peake. Sir, it is a cash flow issue that gets to
exactly what Admiral Nelson was talking about. 60 percent of
the budget at a local hospital for us is personnel, civilian
personnel. So you wind up having to squeeze that area or
supplies or deferring maintenance, which then puts off a bill
for the direct care system the next year.
What it also does, in addition to creating great
dissatisfaction among the providers, who just do not want to
work in a place like that, so they vote with their feet, but
then the patients become disenfranchised as well and it creates
a vicious cycle. Then they go downtown, as General Carlton has
outlined, to the managed care support contractor, because they
need the care. It is hard to park that pregnant lady. She needs
to get that care.
Then they get in that system, get comfortable in that
system. It is hard to get them back when at the end of the year
a supplemental comes and we hire some of the people back. It is
an uncomfortable way of doing business and the lack of
predictability is felt very, very acutely at the patient care
level at the facilities, sir.

UNIFORMED SERVICES UNIVERSITY OF HEALTH SCIENCES

Senator Inouye. I have many questions. I will ask one more
before I yield. As all of you are aware, the Uniformed Services
University of Health Sciences, USUHS, from the time it was
conceived has been under attack. Today there are fewer critics,
but there are those among my colleagues and those in the
administration that question its importance. Both Senator
Stevens and myself are convinced we should have another one.
Of all the military special schools in the United States, I
believe the retention rate among graduates beyond obligation is
over 80 percent, is that not correct?
Admiral Nelson. It has been very high, yes, sir.
Senator Inouye. I do not want to put on the record what it
is for West Point or Colorado Springs or Annapolis, because
they are below that.
Secondly, is it not correct that we have had problems
retaining medical personnel in the reserves since Desert Storm,
and not very many doctors are joining the reserves.
General Peake. If I can address that, sir, it is true we
have a real shortfall in our reserves. There are a number of
folks who just could not take that length of time away from
practice. It is an area that we are addressing very hard in
terms of recruiting and retention. But we have an aged
population and there is a significant number of those folks who
are coming into the retirement window, in addition to those who
are not coming in to fill the ranks because of the Desert
Shield, Desert Storm experience.

KOSOVO

We are working. We had two hospitals now just recently go
into Kosovo. What we have done is with a 90-day rotation, as
opposed to a 179-day rotation, we think that we can get reserve
providers out of the window of vulnerability, if you will, in
their civilian practices. We are studying that now. The first
rotations are done. What it does is rotates people more
frequently.
But we are trying to be attentive and understanding of the
needs of the reserve physicians. They are very important to us
both in the deployment piece and in backfilling our hospitals
here at home.
Senator Inouye. General Carlton, one of the arguments made
by critics of USUHS is that there are a lot of medical schools
all over the Nation; why should we have one for the military?
Is there such a thing as military medicine?
General Carlton. Yes, sir. I believe our opponents do not
understand our business. When we define our business, they say
``medical care'' and they envision peacetime medical care as
the only business we are in. In fact, we have two broad
categories of businesses. One is called readiness, the other is
called the peacetime benefit.
USUHS, as the best investment in readiness medicine we can
make, provides a tremendous baseline for us. Then we train our
Uniformed Services graduates in the benefit mission through
residencies, but they have a foundation in readiness that we
cannot get any place else. So we do not practice medicine in
the military; we practice military medicine, and it is very,
very different.
I believe that lack of understanding is what draws this
fire for the Uniformed Services School.
Admiral Nelson. Senator, the three Surgeons General make up
the Executive Board for the Uniformed Services University and
we have direct impact on some aspects of the University. I was
skeptical of the university years ago, but over the last 8
years as I have commanded a major medical center and also been
the Navy Surgeon General I have learned of the quality of the
product of the University and the focus that it has on military
medicine and the importance to us.
I would be hard put to be without the graduates of the
Uniformed Services University (USU).
Senator Inouye. In fact, is it not correct that the
Secretary of Defense has awarded the three of you a special
unit award?
Admiral Nelson. The award was to the university, yes, sir.
Senator Stevens. Because of the work that you three have
done.
Admiral Nelson. Because of the work of the university, yes,
sir.
Senator Stevens. Could you yield?
Could you give us a plan to develop a western university
for military medicine?
Admiral Nelson. How far west, sir?
Senator Stevens. We will not answer that on the record.
But I do believe we should know what it would cost. This
one is running very well here, but I think to a great extent
the people who are attending it are mainly from the East. I
would like to check that out, too.
Admiral Nelson. Yes, sir.
Senator Stevens. I think we should have an additional
medical university for defense.
Senator Inouye. There is a lot of space out there.
Senator Stevens. Finished?
Senator Inouye. Yes. Thank you, Mr. Chairman.
Senator Stevens. Senator Hutchison.
Senator Hutchison. Thank you, Mr. Chairman.
Senator Stevens made a very good point and this is
something that I too have observed. For instance, the Navy
built a hospital in Corpus Christi, Texas, in the nineties. It
is now almost totally vacant. They do offer clinic services
only. But this is a pilot training center, Corpus Christi and
Kingsville nearby. There is no emergency facility. If a pilot
is injured in training, they go to the emergency center in
Corpus Christi, Texas.
I would just ask the question if that is the most efficient
use of those largely empty facilities? Perhaps it is, but I do
think it is worthy of questioning. When you close a military
hospital, then the many veterans who also have the ability to
use those facilities on a space available basis have to go and
get other care, which can also be more expensive.
Certainly all of you who have been in the military know
that military personnel believe they get better care from
military personnel rather than civilians. Now, I know the
civilians give wonderful care and many are civilian type
functions. As Senator Inouye said, it is pediatricians, it is
gynecologists. But the unique situation that military people
and their families have in moving around and having a different
bonding situation with their medical facilities I think does
augur for military-trained health personnel that can deal with
the unique problems.
So I would just ask you to look at that. I am sure it is
duplicated in other Air Force and Army bases where maybe we
have available space and maybe looking at the costs both for
active duty and retired military would bring new results. It is
at least worth looking at.

PERSONEL ISSUES

I would just ask the general questions. Obviously, health
care is an intensive people business. There are unique
situations for military personnel. I would just like to ask you
what personnel issues any of you see that you think we should
be aware of as we are reassessing how we best give this health
care.
General Peake?
General Peake. The personnel issues that we are concerned
about right now as far as the Army medicine is the issue of
retention, making sure that we can attract and retain quality
health care providers in our system. We want to train them well
because those are the folks that stay with us, so we need to
keep our graduate medical education programs strong and robust.
Already we have alluded to the pay issue. We have a pay gap
that is increasing the way it is. I am looking forward to the
final report from the Center on Naval Analysis, but the
preliminary one is showing a gap anywhere from--an increased
gap from what we had 10 years ago. People are just saying,
well, with this increased optempo and with everything else,
and, oh by the way, I do not have the ancillary people to
support me in the clinics, so the status of practice. They
start putting those various pieces together and they will then
decide to go ahead and leave our service.
We need to not only increase the pay, as has already been
discussed, we really do need to get something, I think before
2003. There is legislation that really does not have funding
behind it yet in the NDAA that allows us to do some bonuses for
critical skills. So I think we need to take that on and get
some money behind that and do that in a shorter term than the
2003 Unified Legislation and Budgeting (ULB).
But we also need to improve the practice, and this
investment in the direct care system that we have all been
talking about would help us do that, give the ancillary people
that allow the doctor not to have to type his own Temporary
Duty (TDY) orders or his own clinical notes and things like
that, or change the paper on the tables, as sometimes happens,
but to make that kind of investment for the quality of
practice.
Senator Hutchison. Thank you.
Any additions?
Admiral Nelson. I would very much agree with those. Those
are the issues across the Navy as well. It is not just
physicians, it is all of our folks who are involved in clinical
health care. We are getting in critical condition on a number
of the nurse corps positions, as well as physicians and
readiness critical specialties.
The analysis CNA did within the Navy identified six areas
of particular concern to practitioners concerning retention.
Pay, as I mentioned, was the top one, the top concern. But the
very issues that General Peake speaks of are included in some
of the rest of them: the administrative, lack of administrative
and ancillary support, the things they have to do for
themselves, the lack of good information management systems to
help speed up that side of their health care, things that take
away from their ability to see patients, spend time with their
patients. Those are the factors affecting our health care
providers, our inability to provide them with adequate support
staff.
In the Navy--well, across the Military Health Services
(MHS), we have a goal of 3.5 support staff to each provider. We
are at 1.8 in the Navy. That is just very dissatisfying to
providers.
Senator Hutchison. Thank you.

DIRECT CARE SYSTEM

General Carlton. Yes, ma'am. I would echo what has been
talked about. The reliability of our direct care system to pay
for our people and a clear focus on customers--we are in danger
of losing the trust of our customers because our funding
profile has gone up and down so rapidly. It has to do with our
business.
There is a recent example in San Antonio where we picked up
a baby in Japan, Okinawa, Japan, that needed a heart-lung
machine for transport. Several years ago I had been told to
shut that service down because it was not cost effective for
the business that I was in. My response was: You do not
understand my business. My business is to provide stateside
quality health care around the world. I told those critics no.
Well, we recently did that to a naval base in Okinawa. We
picked up an Air Force family child who was dead, very nearly,
would have been dead within an hour. In the standard of care in
the country that they were in, that was accepted. It was not
accepted in our standard of care.
Our families and our members overseas understanding that we
will guarantee them stateside quality care. We did pick the
baby up. We did transport them back to Wilford Hall, at great
expense, and the baby is a normal baby home with mother now.
Our business is fundamentally different. I count that as a
readiness business. The staff sergeant that appeared on KSAT
News whose child this was said: ``I had no idea of my medical
benefits until I saw what the military will go to to take care
of my family.'' I cannot buy advertisement like that.
So your point, it is a people-related business and
sometimes we do things that from strictly a business
perspective or a peacetime benefit do not make sense, but make
sense in the great scheme of things that literally we are
around the world.
Senator Hutchison. Thank you very much. That is a wonderful
story.
Thank you.
Senator Stevens. Thank you.
Senator Domenici.

BUDGET BLUEPRINT

Senator Domenici. Mr. Chairman, thank you very much.
I want to ask a question with reference to, today we got a
little blue print from the administration of their budget plan.
It is not in great detail, but it tells us generally. The
little blue book, what is it called?
Mr. Cortese. The Budget Blueprint.
Senator Domenici. Yes, the Budget Blueprint. We are
analyzing it now, but let me ask: For 2002 do you have any idea
what was put in for the health system that the military
provides? Do you know what number is in that budget?
General Carlton. No, sir. I have not seen that blue book.
Senator Domenici. So who would know what they put in there
and how that number was arrived at?
Senator Stevens. Senator, we are going to have the Deputy
Secretary testify on April 4, who will be able to answer that
question. I do not think these gentlemen have access to it, and
I have not seen it, either.
Senator Domenici. I was just going to tell you, Mr.
Chairman, if the same mistakes are made in that year's estimate
in terms of inflation, if they are made in the 10-year plan,
then my number is we are $18 billion short over a decade in
terms of providing the service at today's level, which is a
very big amount.
If in fact it is not in there, we will make room for it in
the budget resolution, because we cannot do otherwise.
General Carlton. Yes, sir. The problem is that does not
include recapitalizing our system in the new world that we are
in with the National Defense Authorization.

MENTAL HEALTH CARE

Senator Domenici. Let me include a couple of questions with
reference to the kind of service you have. You know, in the
United States the mentally ill population is a growing
population. Those who are between 17 and 19, 21, 23, get a
number of the serious mental illnesses, schizophrenia, manic
depression, severe depression. It pops up very frequently in
the age 17 through 23, 24. I assume you all know that, which
causes me to think that you must have some mental health care
that is specific to those with severe mental illnesses within
the military system. Would that be a fair assumption?
General Peake. Sir, it is a fair assumption. It is an issue
that, with that population, if you look at our expenditures,
about half in some of our regions of mental health dollars that
we purchase are for adolescent health care for dependents for
mental health specifically.
Within the military, in dealing with soldiers we are all
attentive to the notion of combat stress and bringing out those
kinds of things. So we have units that involve themselves with
really down at the grassroots level. They are active actually
in Kuwait today. They spread out and they give command
consultation and so forth to try to focus on this kind of
issue.
Senator Domenici. I will be more precise. Do you have
within the direct care system all through your services, do you
have any programs or activities that are directed at the
mentally ill within the medical definition today of ``mentally
ill''? I am not talking about needing counseling. I am talking
about very sick people, schizophrenia, manic depression,
depression.
There has got to be some with this that are entitled to
care in your direct system. I am not talking about the outside
system. If that is, do you have special programs with reference
to it and how can we find out what those programs are about and
what they do? Would you answer that, please, all three of you?
Admiral Nelson. I think all of us have mental health
programs and they are of varying strengths depending on
location and requirement. At National Naval Medical Center in
Bethesda, I know there is an adolescent medicine or a pediatric
and adolescent medical health unit particularly for young
people.
In our training center in Great Lakes we have seen an
increasing number of serious mental illnesses in people who
have volunteered as recruits, and we have to dismiss them from
further service. But it is, I think, indicative of the
population we are drawing from.
Senator Domenici. Well, maybe I will not ask each of you to
answer that. Maybe I will not take as much time. The reason I
am asking this is it seems to me we are entering an era with
reference to the treatment of the severely mentally ill that,
if you had a group that you had to treat within the military,
it would seem to me that that would be a very, very excellent
and exciting research--has research potential for the seriously
mentally ill, because if you have a population that you are
treating there is much that you can learn from it in terms of
the efficacy of drugs and the like, and there are very many
modern pharmaceuticals that help this population.
I assume it does not come to any of your minds that we have
such a program going that could be identified?
General Peake. Sir, if I could comment. We have psychiatric
training programs, but those are few. We do not have a lot
within the Army system. As I say, most of our dependent care
with serious illness like that would go out in the adolescent
community.
Senator Domenici. Let me close by saying that all the
problems that the health delivery system has in the United
States--and believe you me, they are numerous. We really do not
know where we are going in terms of how much America is going
to spend on health care. But obviously, unless there are some
big breakthroughs we are going to spend a lot more every year,
and it is ever changing.
I compliment you for keeping the system together.
Obviously, the TRICARE is going to be an enormous challenge. It
is one of the largest systems we have in the country, and you
all will be managing it by contractors and utilizing that. I
hope it works. I hope it does not cost a leg and an arm. But if
it does, I guess we are going to have to pay for it. We already
agreed to.

RETENTION OF SPECIALISTS

Secondly, I would like to ask in closing if you would
answer a question. It seems to me the specialties within the
medical doctors at your facilities, those who are very good in
one field and they are specialized, like surgeons, it would
seem to me the turnover must be extremely high there. There is
very good opportunities for those kind of specialists to get
big jobs.
Is the turnover in that area higher than it is for those
that do not have specialty qualifications? Any of you, do you
know?
General Carlton. Yes, sir, it is. We do not retain very
many of those people.
Admiral Nelson. Part of the study that I will provide
addresses that for the Navy in quite significant detail. The
surgical specialties are the ones that we have the most
difficult time in retaining right now, along with radiology. We
retained no radiologist who was eligible to leave at the end of
his initial service last year.
Senator Domenici. General?
General Peake. Senator, we have anesthesia, radiology. It
periodically waxes and wanes about which tends to leave the
most. But what it talks to is the importance of our graduate
medical education programs, because that retains, A, the
quality of teacher and people that want to be a part of a
system where what they are focusing on is the patient. So that
is why we have the kind of people that you need out at the
military treatment facilities within the D.C. area, as an
example.

TRANSFER OF UNUSED EQUIPMENT

Senator Domenici. General Carlton, I will close on a
personal note. This committee helped me put in language in the
VA-HUD bill last year for the transfer of some unused equipment
that is sitting in a hospital in Cannon Air Force Base which is
unused. We provided that you could transfer it to a new
community hospital that is being built.
I am going to leave you this note because after the statute
was passed month after month and nothing happened. It appears
from the top level the signal is not being given that you are
going to comply with this statute that permits the transfer of
unneeded equipment at Cannon Air Force Base to a new community
hospital that could use it. Would you look into that for me,
please?
General Carlton. Yes, sir, I certainly will.
Senator Domenici. Thank you.
Thank you, Mr. Chairman.
Senator Stevens. Thank you.
Gentlemen, if I am informed correctly, you report
individually to your service chiefs, but you get your funding
through the Office of the Secretary of Defense, Health Affairs,
and the TRICARE management activity. Is that correct?
Admiral Nelson. Yes, sir.
General Carlton. Yes, sir.

JOINT MEDICAL COMMAND

Senator Stevens. We are in a period of jointness now. Many
people are lecturing us about jointness. What would you say as
the surgeon generals of the respective services about a joint
medical command? Would that help you in dealing with your
problems?
General Carlton. Sir, that is a structural fix to a poor
modeling problem. Our service-specific activities are a very
different culture in the Navy, Air Force, and Marine Corps. The
danger of putting those two areas, the benefit mission and the
readiness mission, closer together, which a joint command might
do, would be that we would lose our readiness perspective.
I do not see that rearranging boxes would help us to solve
the financial issue.
Senator Stevens. What would be your suggestion for solving
the financial problem? It seems to me we are facing a problem
at the Department level, when it has to sort of fudge a little
bit on budgets, reduces your budget, and the people who
negotiate your TRICARE contracts negotiate them for you and
suddenly we find, as I said, a $14 billion gap in TRICARE now,
right now, between 2002 and 2007.
Now, you are telling us, and I believe you are right, that
you need a supplemental again this year. That is because
someone else up at the top level cut each one of your requests.
Why would not a joint command that would be able to deal at the
Secretary level, instead of you going to the secretaries and
service chiefs, and they go to the under secretary or assistant
secretary of defense, and then it goes up the line, and each
guy up the line has got a lot of pressures on him, and they are
cutting you back as they face modernization requests throughout
the Department.
I want to get out of this perennial circle of a
supplemental for defense health financing every year. You are
then in competition with the emergencies that have taken place
in the country, and you do not have an emergency; you just have
an underfunding situation. Supplementals ought to be dealing
with emergencies and not with routine costs that are
predictable and request in the very beginning.
You should be asking now for the moneys for 2003, right?
General Carlton. Yes, sir.
Admiral Nelson. Yes, sir.
General Peake. Right.
Senator Stevens. You would need a crystal ball to do that.
Admiral Nelson. Mr. Chairman, I have a little different
view than General Carlton. I think there could very well be
some value to a joint command. However, I think it must
preserve the readiness side of what we do, the responsibilities
and service culture issues that affect how we prepare for our
readiness role and how we perform it.
I think, properly done, it could do both.
Senator Stevens. It should be no surprise to you that when
we asked the people who are really involved with the readiness
for military combat they had the same response. They do not
like joint commands. Our problem is how are we going to deal
with funding?
What are your shortfalls this year? Have you got a
projection for us on how much you are going to be short this
year?

GLOBAL SETTLEMENT

Admiral Nelson. There is a lot of if's in it, in a way. We
started out the year feeling that we were adequate; it was not
great, but adequate. We have had a 1 percent withhold, so that
cost me $17 million. We did not receive, in my case, $21
million of advances in medical practices, which was part of
$100 million taken out. I think it was first started in 1999.
It was taken out of the existing budget, but it was identified
as a part that would be shared to us as we saw what the coming
advances that had to be financed in military medicine were. At
the current time I think that has been placed against the
global settlement.
The rescission, which we all understand----
Senator Stevens. Pardon me. Did anyone request the money to
fund that global settlement?
Admiral Nelson. I am sorry, sir?
Senator Stevens. Have you requested the money to fund the
global settlement?
Admiral Nelson. I cannot comment on whether Health Affairs
has done that. I think part of what they are requesting in the
$1.4 billion includes some funds for that. But that would be
coming out of Health Affairs and Tricare Management Activity
(TMA).
But the recission was held entirely against the direct care
system as well. So instead of what would have been a $3.5
million charge to me, it is $7 million, over $7 million.
Then with the talk of the $161 million potentially coming
out of us, that is another $45 million against my budget. If
all those things happen, I am approaching $140 million short.
Senator Stevens. How about you, General?
General Peake. Sir, I am in a very similar boat. The
supplement last year gave for us, as an example, about $49
million that was going to be for TRICARE Senior Prime bills and
revised financing bills in 2001 money. That money, as an
example, has been used for the global settlement. We had about
$18 million in the advanced medical practice, which in fact
pays for pharmaceuticals and appropriately pays for
pharmaceuticals so that we can stay up with the standards of
practice out there in the civilian world.
You start adding those pieces together, which may come. If
all of that is in fact included in the $1.4 billion that Health
Affairs is talking about, I could still lay out an additional
about $153 million of shortfall kinds of issues for this year,
things that allow us to--we invested some money in Walter Reed
last year, as an example, in the North Atlantic region, and it
takes a little while, but we are seeing about a 10 percent
increase in their productivity.
Part of our issue is you cannot fund our venture capital or
our initiatives in 1 year and then recoup the savings in that 1
year. So there is opportunities for investment in our system
that will pay off in the longer run, even with the managed care
support contracts. Things like investing in obstetrical
recapture at a place like Fort Hood, you can bring back, make
$332,000 as an example, but it will not come back until another
option period when they renegotiate or do the bid price
adjustment on the contract.
There is a number of examples like that, that you can pay
for now, ultimately it is the right business decision, but
without cash flow you cannot do that. So it is those kind of
things that really do not show up sometimes, I think, in these
budget submissions that you are talking about.
Senator Stevens. General Carlton?
General Carlton. Yes, sir. The $1.4 billion has been
discussed. The Air Force number today is $158 million. That is
broken down into $90 million for the direct care system, $68
million for the contractor. But it does not include the global
settlement nor the new National Defense Authorization Act
(NDAA) authorizations nor recapitalization of our direct care
system, all of which, with the world changed as a result of
that wonderful legislation, we must work out and must solve.
Admiral Nelson. May I correct my number? I said $140
million and actually to fully fund us would be $151 million.
Senator Stevens. Well, we will do our best, gentlemen. I
think we will be getting a supplemental some time the end of
May. We will see what happens.
But I do appreciate your being here, and we are going to
ask some of the questions of the panel that is coming in April
of the type that Senator Domenici wanted to have a response to.
I hope we can take this out of the cycle. I would hope we get
to the day where we will not face supplementals except in
emergencies. Then we will have greater stability,
predictability, and I think the cost of the service that you
provide would be less in the long run than this start and stop
kind of funding.
We appreciate your help. Admiral, God be with you, my
friend, and we look forward to seeing you down the line. I am
sure I will bump into you along the line. We thank you again
for your service to your country.
Admiral Nelson. Thank you very much, Senator.

STATEMENTS OF:
REAR ADMIRAL KATHLEEN L. MARTIN, DIRECTOR, NAVY NURSE CORPS,
U.S. NAVY
BRIGADIER GENERAL WILLIAM T. BESTER, CHIEF, ARMY NURSE CORPS,
U.S. ARMY
BRIGADIER GENERAL BARBARA C. BRANNON, DIRECTOR OF NURSING
SERVICES, OFFICE OF THE SURGEON GENERAL, U.S. AIR FORCE

Senator Stevens. We will now turn to the panel for the
nurses. We will take sort of a 5-minute break.
Gentlemen, if anyone comments to you about your responses
to my questions, you tell them to come and see me, will you?
This is a transition now to the chiefs of the nursing
corps. Military nurses of all services are absolutely essential
to providing care to the men and women in uniform so richly
deserve. We thank you for all you do to make that happen.
We welcome back Admiral Kathleen Martin, General Barbara
Brannon, and General William Bester. General, I think it is
your first appearance here, is that correct?
General Bester. Yes, sir.
Senator Stevens. We congratulate you on your promotion and
your new assignment.
Before we hear from you, let me turn to my friend Senator
Inouye, who is sort of the godfather of the oversight of the
nursing corps. It is better than being the grandfather.
Senator Inouye. Before I begin, I would like to have my
prepared statement relating to the Nurse Corps placed in the
record.
Senator Stevens. Without objection.
[The statement follows:]

PREPARED STATEMENT OF SENATOR DANIEL K. INOUYE

Good morning. I join the Chairman in welcoming Brigadier
General Bester, Brigadier General Brannon, and Rear Admiral
Martin to discuss Military Nursing Programs. It has been my
pleasure to work with military nurses for many years, and I am
proud to witness their numerous accomplishments.
We have an outstanding group of leaders testifying before
the Committee today.
Rear Admiral Martin is appearing before this committee for
the last time as the Director, Navy Nurse Corps. I would like
to thank Rear Admiral Martin and commend her for her dedication
to the Navy, the nation, and her assistance to this committee.
Not only has she served as Deputy of the Navy Nurse Corps,
she has concurrently served with distinction as commander of
one of the premier Navy medical centers.
I would like to welcome Brigadier General Bester for his
first appearance before this committee. I hope you will find
this hearing a worthwhile experience and it will be the first
of many productive discussions.
Finally, I would like to congratulate the Army Nurse Corps
on its 100 year anniversary and thank them for the quality care
its members have provided America's Service Men and Women over
the past century.
Military Nursing is a profession that is at the forefront
of our medical mission. Military nurses continue to provide
outstanding care to their patients in all types of clinical
settings, and have excelled in vital leadership roles.
The fact that three military medical centers are currently
commanded successfully by Nurse Corps Generals or Admirals is
testament to their ability, accomplishments, and competency as
military officers.
The success of these nurses also illustrates the need for
all military nurses to enter active duty with a minimum of a
Bachelor of Science degree in Nursing.
Now it appears we will have a larger mission for the
Military Health System due to the recently authorized expansion
of TRICARE. This, in light of the current and future nursing
shortage, will present difficult challenges to military
nursing.
The challenge will be to: ensure readiness; retain officer,
enlisted and civilian nursing staff; continue to educate
advanced practice nurses; maximize usage of nurse
practitioners, nurse midwives, and nurse anesthetists; maintain
a strong research foundation to answer questions to which
nurses need answers; develop new paradigms to successfully meet
health care delivery problems; and last, but not least,
continue to excel in providing outstanding care anytime,
anywhere.
In order to meet these challenges the Nurse Corps must plan
and implement policies that develop innovative ways to reduce
health care costs while at the same time advocating for high
quality health care.
I appreciate your attendance this morning and look forward
to hearing about retention, readiness, practice issues,
TRICARE, and research initiatives in the Nurse Corps.

Senator Inouye. Like many of my fellow Americans, I have
been the beneficiary of nursing services for many, many years.
I am pleased, Mr. Chairman, that together we inaugurated the
nursing intern program as a program of this subcommittee. At
this time I would like to note one of the graduates of that
intern program. She will be succeeding Admiral Martin.
Admiral Lescavage, are you here? Congratulations.
Admiral Lescavage. Thank you.
Senator Inouye. I wish to join the chairman in welcoming
all of you here and tell you that it has been my pleasure to
work with military nurses for many, many years. I have admired
so many of your accomplishments.
Today is very likely the last time, Admiral Martin will be
appearing before this subcommittee and I join the chairman in
thanking her for her many years of service to our Nation. We
appreciate that very much.
General Bester, this is your first hearing.
Congratulations. I am glad the Army decided that the time had
come for a man to be selected as chief of the Army Nurse Corp.
This is one way nursing can get better recognition. This world
of ours has not quite come to that level of enlightenment yet
where it considers women to be the equal of men, and as a
result nursing throughout the years has had to take a back seat
in the health care professions.
I recall not too long ago when all of the TV weekly shows
on hospitals and hospital care, portrayed nurses as always
trailing behind doctors and they were the ones who were always
faulted for mistakes that were made. Since that time I'm glad
to say there has been an improvement in the perception of
nursing.
I would also like to welcome General Brannon. We are glad
to have you here.
We have heard the surgeon generals testify. Admiral Martin
I would like to know what impact TRICARE will have on nursing
services.
Admiral Martin. Sir, one good thing about TRICARE and
TRICARE for Life is that it gives us many patients in which to
enhance our competencies and retain our readiness. However,
with TRICARE we see many conflicts with our dollars and with
our funding, and our facilities are not configured to really
meet the changing health care needs and health care
environment.
Our nurses many times look on the outside for other
opportunities and perhaps even better pay. So TRICARE really
has had a positive effect on our nursing community, as well as
a negative effect on our nursing community.

NURSING SHORTAGE

Senator Inouye. Admiral Martin do you think you will be
able to recruit enough nurses to meet the growing number of
applicants for TRICARE for Life? For example, will there be
enough nurses who are trained to take care of the elderly?
Admiral Martin. In the Navy we are having success with our
pipeline programs, and those are our scholarship programs and
our Reserve Officer Training Corps (ROTC) programs and our
direct commissioning programs, our medical enlisted
commissioning programs. However, when we try to recruit fully
qualified nurses we are having difficulties. We are having
difficulty recruiting civilian nurses for our civil service
system. They see civilian pay, they see many of the bonuses the
civilian hospitals are offering, and because of what I consider
an antiquated personnel system it takes a lot longer to hire a
civilian into our civil service program than it does for our
civilian counterparts to hire.
Senator Inouye. Do you have any recommendations on how we
can reform that system? I notice that the length of time it
takes for processing applications is about three times as long
in the civilian sector.
Admiral Martin. Yes, sir.
Senator Inouye. What can we do to make hiring civilians
easier?
General Bester. Senator, we are working very hard with the
civilian personnel, with our civilian personnel counterparts,
to try to get that system streamlined. It is a large impediment
to the way that we do business, and with the additional TRICARE
benefit coming on line, which we are all very much in favor of,
that was passed in the National Defense Authorization Act,
along with that comes no increase in authorizations in military
nurses, of course. So where we have to get those nurses is from
the civilian sector.
The processing times are just not conducive to allowing us
to do that, and we are working hard with our civilian personnel
counterparts to streamline that system. I think we have got
interested applicants out there, but they have to wait too long
to get hired.
Senator Inouye. I would like to hear the nursing chiefs
opening statements.
Senator Stevens. Well, that is perfectly all right. I am
sure they do not have any objections.
Go ahead. Would you like to proceed with your questions--
with your statement, Admiral, your statement, and then going
Brannon and then General Bester?
Senator Inouye. May I?
Senator Stevens. Yes.
Senator Inouye. Admiral Martin, we will have your testimony
now.
Admiral Martin. Thank you.
Good morning, Mr. Chairman, Senator Inouye. It is my
pleasure to testify today as the Director of the Navy Nurse
Corps and the Commander of the National Naval Medical Center
Bethesda. Today's testimony does mark a milestone event. For
the first time, this committee will gain our perspectives as
Nurse Corps Directors as well as military treatment facility
commanders.
First, I would like to address the military health care
system's newest program, TRICARE for Life. As you have heard,
this program poses special challenges for all of the services.
The TRICARE for Life initiative provides us the opportunity to
meet the health care needs of our beneficiaries in a way that
we have not been able to in the past. Enrollment in TRICARE
Prime will provide our over 65 population with access to
comprehensive care at a time when it is most needed. For
military medicine, TRICARE for Life will contribute to a robust
training environment and provide the clinical competencies
necessary to keep our personnel ready to meet operational
missions.
However, TRICARE for Life presents significant hurdles. The
resource shortages that we face at the facility level have
serious implications on our ability for us to meet our mission.
Presently, as you heard, we are struggling to provide a limited
benefit to our over 65 beneficiaries. Without further
resources, we will be unable to increase services to deliver
the proposed comprehensive benefits.
One of the key principal resource issues is, as you
mentioned, staffing shortfalls. Key to the success of TRICARE
for Life is ensuring sufficient numbers of providers and
support staff to enhance productivity and access to care. We
continue to be successful in making effective use of our
military personnel. However, a revamping of the civilian hiring
process and improved funding for the entire health care
delivery system is what we need to support that expanded
benefit.
When we are talking about compensation, it is not just
limited to nurses or physicians. It is really including all of
our health care disciplines. I would say our technicians and
other ancillary personnel are included in this shortfall.
Military personnel work side by side with contract staff who
command salaries far exceeding some of their military
counterparts. This creates additional dissatisfaction for our
military members.
Compensation is a very powerful driver in the decision to
remain on active duty or to leave the service. Additionally,
there is little elasticity left, as the health care dollar is
stretched to cover advances in technology, escalating pharmacy
costs, continuous training requirements, and numerous overhead
expenses. There is a constant tradeoff of tight resources for
upkeep and renovation of old infrastructure.
I know you have been in our health care facilities and you
have seen our aging buildings and their outdated
configurations, which prevent us from keeping pace with the
changing health care environment. Facilities are rapidly
deteriorating due to scarce resources. These issues confront us
daily as military treatment facility commanders.
As Nurse Corps Directors, a significant resources issue is
the growing nursing shortage. We must employ effective
recruiting and retention tools to maintain a healthy force
structure in both our active and reserve components. An
important retention strategy is advanced education, preparing
our nurses to effectively lead diverse technical and
professional personnel in the delivery of quality care.
The Federal Nursing Service Chiefs from the Army, the Navy,
the Air Force, and the Veterans Administration partner with the
Graduate School of Nursing at the Uniformed Services University
to create advanced practice nursing education with a focus on
military readiness. The nurse anesthesia and family nurse
practitioner programs are becoming stronger as we support them
with exceptionally talented instructors and expand the number
of clinical training sites in our military facilities.
In closing, TRICARE for Life is welcome news to our
beneficiaries. As we collaborate with our fellow service
colleagues to achieve high quality, cost effective care, our
patients remain our highest priority. I am confident military
nursing has the leadership skills and the professional
expertise to lead health care into the future.
I sincerely thank you for your support and for the
opportunity to address you today. It has been an honor to serve
as the Director of the Navy Nurse Corps and I assure you that
my successor, Rear Admiral-select Nancy Lescavage, is the
perfect choice to assume this leadership position in Navy
medicine. I look forward, though, to our continued association
in my position as the Commander of the Flagship of Navy
Medicine.

PREPARED STATEMENT

Senator Stevens. The commander of what?
Admiral Martin. Commander of the flagship of Navy Medicine,
the National Naval Medical Center.
[The statement follows:]

PREPARED STATEMENT OF REAR ADMIRAL KATHLEEN L. MARTIN

Good morning, Mr. Chairman and distinguished members of the
Committee. I am Rear Admiral Kathleen Martin, Director of the Navy
Nurse Corps and Commander of the National Naval Medical Center. It is
my pleasure to be here.
Today I would like to address two major programs: TRICARE for Life
and Military Health System Optimization, an effort to make the most
effective use of our resources. These two programs pose special
challenges for the Military Healthcare System of today and tomorrow.
The TRICARE for Life initiative provides us the opportunity to meet
the healthcare needs of our beneficiaries in a way we have not been
able to in the past. The opportunity of the over 65 population to
enroll in TRICARE Prime will provide them with access to comprehensive
care at a time when their healthcare needs are becoming more complex.
For military medicine, TRICARE for Life will contribute to a robust
training environment and provide the clinical competencies necessary to
keep our personnel prepared to meet operational missions.
Both TRICARE for Life and Optimization pose significant hurdles.
The resource challenges we face at the facility level have serious
implications for our ability to meet our missions. Without further
resources, we will be unable to increase services to deliver the
promised comprehensive benefit.
One of the principal resource issues is staffing shortfalls. A key
to optimizing health care is ensuring sufficient numbers of providers
and support staff to enhance productivity and access to care. We
continue to be successful in making effective use of our military
personnel; however, there is a need to increase the numbers of civilian
support staff in order to make Optimization work. For that, there must
be improved funding for the entire system and a revamping of the
civilian hiring process. The current civilian personnel system impedes
our efforts to bring new staff on board in a timely manner, resulting
in loss of potential new hires to civilian employers. The antiquated
classification system prevents us from competing with civilian
employers in salary and professional status.
Compensation is an issue for military staff as well. I clearly see
this as an MTF commander. Military personnel work side by side with
contract staff who command salaries far exceeding those of their
military counterparts. This creates additional dissatisfaction for our
military members. Compensation is a powerful driver in the decision to
remain on active duty or to leave the service.
Additionally, there is little elasticity left as the health care
dollar is stretched to cover advances in technology, state-of-the-art
equipment, spiraling pharmacy costs, continuous training requirements,
and a myriad of other overhead expenses. Finally, there is a constant
trade-off of tight resources for upkeep and renovation of old
infrastructure. World War II era building configurations prevent us
from keeping pace with the changing healthcare environment, and
facilities are rapidly deteriorating due to scarce resources.
These issues confront me daily as the commander of a military
medical center. In my role as Director of the Navy Nurse Corps, I see
the impact system-wide. Utilization of existing resources, advancing
technology and an aging population are fueling the demand for multi-
skilled, well-educated nurses to meet patient care needs in an
increasingly intricate healthcare system. Navy Nurse Corps officers
fulfill this need through their broad scope of professional practice.
Basic preparation at the baccalaureate level provides leadership
skills, critical thinking ability, and case management in addition to
strong clinical skills. This enables them to serve in critical
positions as clinical support staff for comprehensive care delivery as
well as direct care providers.
However, we are competing with the private sector for baccalaureate
prepared nurses. In light of the growing nursing shortage, we must
employ effective recruiting and retention tools to maintain a healthy
force structure in both the active and reserve components. The Nurse
Corps has implemented initiatives that assist existing recruiting and
retention processes. In partnership with Navy Recruiting Command, we
created a multi-step recruiting plan that seeks the best-qualified
candidates for the Nurse Corps. The current nurse accession bonus is a
key component of our recruiting strategy. Our recruiting success
depends heavily on your continuation of the accession bonus and
educational stipend programs.
Given today's competitive health care environment, that may not be
enough to maintain the force structure. Currently, only nurse
practitioners, midwives and nurse anesthetists receive any type of
special pay. That program has been a successful retention tool thus
far, but the civilian-military pay gap is rapidly widening. Further
retention bonuses may be needed to retain all types of nurses as
competition increases for the dwindling supply.
An important retention tool is advanced education for Nurse Corps
officers, which prepares nurses to effectively lead both military and
civilian personnel of different technical and professional levels in
the delivery of quality care, in any setting. Of note, over 23 percent
of our Nurse Corps is master's prepared. The Federal Nursing Service
Chiefs partner with the Graduate School of Nursing at the Uniformed
Services University of Health Sciences to create a pipeline for
advanced practice nurses. The nurse anesthesia and family nurse
practitioner programs are becoming stronger as we support them with
exceptionally talented instructors and expand the number of clinical
training sites in military facilities. Innovative distance learning
programs offer military and Veterans Administration nurses the
opportunity to complete nurse practitioner certificate programs within
their hospitals. Uniformed Services University provides superb
educational opportunities for military nurses, and we look forward to
future collaboration on creative educational initiatives.
In closing, the recent advent of TRICARE for Life and Optimization
are welcome news to our beneficiaries, and arguably the most
significant changes to our healthcare system since the creation of the
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
program in 1966. Navy nurses, in concert with the whole Navy Medicine
team, look forward to using their considerable talents for the
successful implementation of these new initiatives. But these talented
people are not enough to achieve the task before us. I sincerely hope
that our entire military healthcare system will be correctly supported
so that we may meet our operational and peacetime missions.
As we collaborate with our colleagues in all the services to
achieve high quality, cost effective care, our beneficiaries are our
highest priority. I sincerely thank-you for your support and for the
opportunity to address you today, I look forward to our continued
association during my tenure as Director of the Navy Nurse Corps and
Commander of the Flagship of Navy Medicine.

Senator Inouye. Thank you very much.
General Brannon.
General Brannon. Yes, Mr. Chairman, Senator Inouye. It is
certainly a privilege and a pleasure to be invited back to
testify again this year as the Air Force Assistant Surgeon
General for Nursing Services, and this year I am also the very
proud commander of the 89th Medical Group at Andrews Air Force
Base, and certainly honored to be the first Air Force Nurse
Corps officer to command a medical center.

RECRUITING

Now, I am going to speak on behalf of all the corps chiefs
when I talk about recruiting, which we had identified last year
as a significant challenge. This year that challenge has
continued to grow for all of us. Nursing is a very rewarding
profession, but with the many career options people have today
it is not very popular with our young adults. So while the
demand for nurses in America continues to grow, the supply is
dwindling. It is projected that registered nurse positions will
increase 23 percent over the next 5 years and yet baccalaureate
nursing programs have had declining enrollments for 6
consecutive years.
Our nurse work force is also aging. The average age of a
registered nurse in the United States is 45.2 years. We also
see that 50 percent of our current nursing work force will be
retirement eligible--that is age 65--in 2015. These trends have
had a dramatic impact on the Army Nurse Corps. Reserve Officer
Training Corps is their primary accession source, and as the
school enrollments have decreased so have the scholarship
requests, and they are down about 50 percent.

NURSING SHORTAGE

The Army Recruiting Command has been able to make up a
significant part of this shortfall. However, direct accessions
of nurses over age 40 has become increasingly common in the
Army. What this creates is an older, limited term, non-career
work force for them.
The Navy Nurse Corps has been fortunate to meet their
recruiting goals for the past 10 years and pipeline programs
that they first established in the early eighties have been the
key to their success. While their recruiting goal is 290 nurses
this year, they are only looking for 100 through direct
accessions. The remainder will come from ROTC, medical enlisted
commissioning, and nurse candidate programs.
The Air Force Nurse Corps is experiencing our third
consecutive year of potential recruiting shortfall. Now, our
needs are somewhat different from the Navy and the Army. Our
initial accession goal is higher and we also have a much
greater need for nurses who already have some experience. That
is because outpatient clinics comprise about 65 percent of our
current Air Force military treatment facilities, and most of
them do not afford that hands-on skill that those brand new
novice nurses need.
Last year, in order to work on this problem we increased
the training capacity in all of our bedded facilities and we
also broadened the definition of the fully qualified nurses we
needed to access. We now include those who have a year of
outpatient nursing experience in addition to inpatient
experience. We have commissioned more enlisted members who have
earned their baccalaureate degrees in nursing and we also
doubled our number of ROTC scholarships.

MILITARY BONUS SYSTEM

While each of these strategies has had some impact, I fear
we will still fall far short of our goal this year. We all
agree that the nurse accession bonus is critical for recruiting
in today's environment. But the civilian world has upped the
ante. To attract new nurses, health care organizations in many
parts of our country are offering larger bonuses, more robust
benefit packages, and also nursing scholarships in some cases.
We will continue to work with our sister services to evaluate
the effectiveness of our current military bonus system.
We have a lot of challenges--nurse recruiting, nurse
retention, implementing TRICARE for Life. But military nursing
is still a great way of life. We are on the leading edge of
health care and we are making population health a reality for
all of our patients. Our nurse-managed clinics and our
telephone nursing initiatives provide great support to our
families.
Last year we recognized the need to standardize telephone
nursing practice and we have really improved this service by
deploying new policies and new training programs. We also have
a nurse triage demonstration project under way that was funded
by the Tri-Service Nursing Research Program. The objective is
to develop more effective and efficient procedures.
Last year I described the Air Force's commitment to
optimize the vast potential of our enlisted members. Since then
we have made our technicians pivotal members in our primary
care teams. They enhance the quality of each patient visit by
performing initial screening, identifying preventive health
needs, and also providing patient counseling and education. We
have also made amazing progress in our initiative to increase
the number of licensed practical nurses in our enlisted force,
and we have gone from concept to students in the classroom in
less than a year. Our first class of 23 students will graduate
from an accelerated civilian program in June.

READINESS

Now, although many of our efforts have concentrated on
peacetime health care, readiness remains job one. Our Air Force
nursing motto is ``Global Nursing, Precision Care,'' and it
reflects our commitment to our patients and to our Nation.
Military nursing stands ready to respond any time, anywhere, in
peace or in war.
I think a great example of this was our joint participation
in MedFlag 2000. That was a State Department-sponsored
humanitarian effort in Cameroon, West Africa. I was able to
visit one of those villages during the deployment. I got to see
our medics in action as they immunized over 19,000 African
children to protect them from meningitis. I truly will never
forget the looks on the faces of those African mothers, because
they stood in line for many hours, but they recognized that our
care could make a difference between life and death for their
children.

NURSING TRAINING

Nursing is critical to the success of our Nation's
partnership in peace initiatives and other contingency
operations. Research is also vital to readiness. Your enduring
support of the Tri-Service Nursing Research Program enabled
nurses at Wilford Hall Medical Center to validate deployment
readiness of our Air Force nurses. They used web-based training
programs in a simulation laboratory to assess 200 nurses, and
their study will help us determine the training frequency
required to maintain critical wartime skills.

PREPARED STATEMENT

Mr. Chairman and distinguished members of the committee, on
behalf of my colleagues I really thank you for allowing me to
share some of the achievements and the challenges of military
nursing. We are very grateful for your enduring and tremendous
support.
[The statement follows:]

PREPARED STATEMENT OF BRIGADIER GENERAL BARBARA C. BRANNON

Mr. Chairman and distinguished members of the committee, I am
Brigadier General Barbara Brannon, Director of Air Force Nursing
Services and Commander of Malcolm Grow Medical Center at Andrews Air
Force Base. It is an honor and privilege to represent today the 19,000
dedicated members of the active and reserve components of Air Force
Nursing Services. Thank you for this opportunity to report on our
achievements and challenges, and for your continued advocacy and
support of our many endeavors. My comments will focus on recruiting and
retention, nursing leadership and optimization, readiness, and
research.

Recruiting
The national nursing shortage is having a devastating effect on
staffing throughout the healthcare industry, and the Air Force Medical
Service is no exception. For the third consecutive year, we are
experiencing shortfalls in accessions. We were 85 nurses, or 30
percent, short of our nurse recruiting goal in fiscal year 1999. In
spite of revising the goal last year from 300 to a ``remotely
achievable'' 225, only 205 new nurses joined the Air Force in fiscal
year 2000 by direct commissioning. Unfortunately, current reports
project an even more serious shortfall of nurses this year.
This is despite several initiatives implemented during the past
year to enhance recruitment. We changed the operational definition of a
``fully qualified nurse'' to include those with one year of outpatient
nursing, as opposed to only accepting those with inpatient acute care
experience. The Air Education and Training Command redesigned the Nurse
Transition Program and we increased training capacity at our larger
inpatient facilities that enabled us to recruit nurses with no
experience for the first time in over three years. We also commissioned
twice the number (from 12 to 23) of enlisted members who had earned
their baccalaureate degree in nursing by removing the cap on that
accession source. The number of ROTC scholarships doubled to 50 from
the original goal of 25 set three years ago. Anticipating a severe
shortage of Certified Registered Nurse Anesthetists, we instituted, for
the first time ever, a loan repayment program that grants reimbursement
of education costs up to $24,000. Innovative incentives like this are
essential as we struggle to meet our recruiting goals in critical
nursing specialties.
Other incentives designed to enhance our officer recruiting efforts
have been discussed, but could not be supported last year by our sister
services due to differences in our personnel management systems and our
recruiting goals. One proposal was to change Department of Defense
policy to reduce the minimum term of service from three years to two
years. We believe this proposal would attract nurses not interested in
a longer active duty commitment.
We would also like to evaluate the nurse accession bonus. It is our
belief that the five thousand dollar accession bonus no longer competes
favorably with the employment bonuses offered in the civilian market
place. Newspaper advertisements and our recruiters tell us that some
civilian hospitals offer as much as $10,000 in sign-on bonuses. We will
continue to work with our sister services to find mutually acceptable
legislative answers to the bonus question.

Retention
Our current end strength reflects our accession shortfalls, the
final year of the Air Force Nurse Corps voluntary draw down program,
and an unexpected increase in the separation of nurses after their
initial active duty commitment. At the end of fiscal year 2000, there
were 4,048 nurses on active duty, 165 nurses below our authorized
endstrength. This is the first time in over a decade that we have been
below endstrength.
I have directed that every nurse who voluntarily separates from the
Air Force be interviewed by the Chief Nurse, or a senior Nurse Corps
officer. The standardization of exit interviews will help identify the
factors that are influencing our nurses to separate early from active
duty military service. Trend analysis of information provided by the
survey will potentially enable us to target both the timing and type of
incentives needed to improve retention.
Retention of our enlisted members has also become a challenge. For
example, the retention goal for first term medics is 55 percent. Last
fiscal year, the medical technician retention rate was 51 percent, the
lowest in seven years. Retention among career enlisted members, those
with ten to fourteen years in service, was also below goal. A selective
reenlistment bonus was instituted to improve the declining retention
for our first termers. Little improvement has been noted, with the
January 2001 reenlistment rate for first term medical technicians at
only 43.9 percent.
Quality of life issues, including child care, housing, benefits,
and workload, is often cited as a major factor when our people make
career decisions. Continued congressional support of legislation that
focuses on improving military quality of life will bolster recruiting
and retention of our officer and enlisted forces.

Nursing Leadership Opportunities
The Air Force has a solid progressive leadership track, and nurses
as commanders are no longer a novelty. I am very proud to be the first
Nurse Corps officer selected to command an Air Force medical center.
Active duty nurses now command 22 percent of our medical groups.
Thirty-one Nurse Corps colonels met the most recent Medical Commander
Selection Board. Forty-two percent were identified as command
candidates, and of those 13 nurses, 6 were selected for group command.
Compared to the previous year, the selection rate increased 12 percent
and the match rate decreased 8 percent.
Active duty nurses currently command 19 percent of our squadrons.
On the last selection board, 39 nurses were identified as squadron
command candidates and comprised 24 percent of all AFMS candidates.
Twenty-two nurses were selected as squadron commanders and filled 25
percent of the requirements. Nurses command 32 percent of the Air
Reserve medical squadrons and 13 percent of Air National Guard medical
squadrons, representing a 3 percent increase for the Air Reserve and a
2 percent decrease for the Guard.

Nursing Optimization
Air Force nurses are also on the leading edge in the implementation
of new health delivery models. Primary Care Optimization, and its
overarching strategy of population health management, remains the focus
of our peacetime health care system. Although challenges are great, we
enjoyed many successes this past year. I am as excited about the role
of the Health Care Integrator this year, as when I spoke of it in last
year's testimony. These nurses work at the facility level as ``air
traffic controllers,'' ensuring our patients get the right care at the
right time, from the right provider. Prevention and disease management
are essential ingredients of the health care integrator function. For
example, the Health Care Integrator at Tyndall Air Force Base in
Florida managed the follow-up care of over 800 patients seen in local
civilian emergency departments. By returning these patients to the
military treatment facility, the nurse ensured continuity of care and
reduced costs per patient by eliminating duplication in services. As
this role continues to evolve across our health system, I am optimistic
that there will be even greater improvement in services and higher
cost-savings.
Another success story revolves around telephone nursing practice,
telehealth that is based on a philosophy committed to the goals of
delivering quality, cost effective, and safe nursing care. Our nurses
in our outpatient clinics reported in a recent survey that 50 to 60
percent of their duty time was spent providing telephone support to
patients, assisting them in meeting their health care needs. This is
equivalent to the time our civilian counterparts report that they spend
in the same activities. Our nurses use the telephone to triage,
educate, and coordinate care for patients.
Because of the amount of time spent on the telephone, there was a
demand to standardize Air Force telephone nursing practice. We
developed guidelines, training materials, and other support tools that
were deployed to the field late last year. This tool kit was well
received and stimulated improvements throughout the Air Force Medical
Service. In addition, we are conducting a triage demonstration project
to evaluate access to care, clinical outcomes, patient and staff
satisfaction, and required resources. This project is funded through
the TriService Nursing Research Program. Although the demonstration is
just underway, there are early lessons learned to validate that support
of nurses in the triage function was much needed. I look forward to
reporting our results next year.
We have also made great strides in optimizing the role of our
enlisted members providing patient care services. As a result of
Primary Care Optimization, our enlisted personnel have become pivotal
members of the healthcare team. They are responsible for initial
patient screening, identification of preventive health needs, and many
aspects of patient counseling and education. Their work improves the
quality of the patient visit by enhancing the efficiency of the
physicians, nurse practitioners, and physician assistants.
Last year I spoke of the vast untapped potential of our enlisted
force. We have made great progress in our initiative to increase the
number of Licensed Practical Nurses in our skill mix. We entered a
partnership with a civilian college and our first class of 23 students
are now attending an accelerated program to earn a practical nurse
certificate.
Much work was done this past year to develop an inpatient staffing
model to correct the skill mix imbalance prevalent in our bedded
facilities. The goal is to ensure the patient receives the right level
of care from the appropriate nursing staff member. The model was field-
tested last summer and the new standards were applied in the fiscal
year 2003 manpower programming cycle.
We are now focused on developing new staffing models for our
specialty services. Advanced practice nurses can play a critical role
as we expand population health and condition management programs. We
believe that increasing the number of advanced practice nurses in
ambulatory care settings will increase access to care, improve patient
satisfaction, and enhance the efficiency and effectiveness of our
health care delivery.
Deployment of ``TRICARE for Life'' will also present another
opportunity to capitalize on the talents of nursing personnel. We are
delighted that we may be given the opportunity to welcome our over-age
65 retirees and their families back to our healthcare facilities. It is
absolutely the right thing to do, and will also allow our people to
practice the full scope of nursing, and maintain those skills critical
to our medical readiness.

Readiness
We are at the nation's call and must be prepared to respond any
time anywhere. We capitalize on every opportunity to sustain top
clinical skills and to gain experience in a variety of settings. Two
hundred Air Force medics participated in MEDFLAG 2000, a United States
European Command (USEUCM) three week medical readiness exercise in
Cameroon, West Africa. The 86th Aerospace Expeditionary Group, from
Ramstein Air Force Base, Germany, was the lead agency of the joint team
that also included medical personnel from the Army and the Navy. I made
a personal visit to one village and witnessed our medics in action as
they conducted a massive immunization campaign protecting over 19,000
African children from meningitis. I will always remember those parents
who patiently waited in line for hours, knowing that our help could
mean the difference between life and death for their children. Nursing
is critical to the success of our nation's ``Partnership for Peace''
missions.
In Southeast Asia, our Independent Duty Medical Technicians (IDMT)
supported Joint Task Force Full Accounting, a mission to search for and
recover remains of Americans Missing In Action. Our IDMTs also deployed
to the Federated States of Micronesia in support of civil engineering
teams, and provided immunizations and routine medical care to the local
population. These contingency operations help our people gain new
skills and sustain clinical competencies essential for medical
readiness.

Research
The continued support of the TriService Nursing Research Program
enabled us to study military nursing practice models and new
technologies in the patient care environment. Nurses at Wilford Hall
Medical Center in San Antonio, Texas, conducted research on wartime
nursing competencies. This initiative used a web-based computer
assisted training program and an innovative simulation laboratory to
verify the readiness skills of over 200 clinical nurses. A key outcome
of this study is the validation of the training frequency required to
sustain necessary skills.
We also received a grant from the TriService Nursing Research
Program that will help us deploy ``Medical Team Management'' throughout
the Air Force Medical Service. Using the aviation crew resource
management concept well-known to our flying community, a team at Eglin
Air Force Base, Florida, designed a program to improve patient safety
by enhancing communication and collaboration between nursing staff and
other healthcare disciplines. During the past year, over 1,500 Air
Force medics were introduced to the elements critical to building a
successful safety culture. The initiative also produced a Hospital
Safety Index to measure staff attitudes toward patient safety. Analysis
of preliminary data is pending.

Closing remarks
Mr. Chairman and distinguished members of the Committee, it has
been a pleasure to share the most recent chapter of our Air Force
Nursing story with you today. Our motto, ``Global Nursing, Precision
Care'', reflects our commitment to our nation and our patients, in
peacetime and in war. We thank you for your tremendous support of
military nursing.

Senator Stevens. Thank you very much.
General Bester.
General Bester. Mr. Chairman, Senator Inouye, it is indeed
a pleasure for me to be asked to come here today to testify.
Over the last year, all three of us nursing chiefs have
worked very closely on issues that affect all three of the
services. Today what I would like to discuss primarily is the
manning issue, both military and civilian. Last year, you will
recall, all the armed services stressed the need for continued
incentives to attract and retain military members in light of
the present and the projected future nursing shortages. The
need for incentives to retain military nurses remains critical.
According to a policy statement from the Tri-Council of
Nursing Organizations--and that is comprised of the American
Association of the Colleges of Nursing, the American Nurses
Association, the American Organization of Nurse Executives, and
the National League for Nursing--today's nursing shortage is
very real and very different from any experienced in the past.
The new nursing shortage is evidenced by fewer nurses entering
the work force, acute nursing shortages in certain geographic
areas, and a shortage of nurses adequately prepared to meet
certain areas of patient care needs in a changing health care
environment.
Enrollments in all basic register nurse (RN) preparation
programs have declined each year for the last 5 consecutive
years. According to the National League for Nursing, between
1995 and 1999 the number of nursing programs of all types
actually increased in the United States by 2.6 percent. Despite
this overall growth in the number of nursing programs, the
number of students enrolled and graduating from nursing
programs has actually declined 13.6 percent. The clear trend is
toward an increase in the number of programs occurring
simultaneously with a decrease in the number of enrollments and
graduations from these programs.
Currently our greatest retention challenge is at the
lieutenant and captain level, the 01 through 03 level, which
really is the heart of the military work force for all the
services. Each of the services has targeted this group through
open communication and via interviews with upper level
management to ascertain the reasons the junior officers depart
the military. We are closely monitoring this group and working
those retention issues that are within our power to effect
change and resolution.
Last month the Army Nurse Corps hosted the Charles J. Ready
Leader Development Conference. That conference is designed to
develop and mentor future nursing leaders from all three of our
services. Participants address critical issues affecting their
development as military nurses.

SPECIALTY NURSING

Most appropriate to today's environment was answering the
key question: Why are the mid-level officers leaving the
military today? The service chiefs received a very powerful
message from them. In addition to quality of life issues,
participants made it clear that educational opportunities and
pay and incentives were a top priority to them. Current
civilian sign-on bonuses, flexible work schedules, compensation
packages and benefits are attractive alternatives to our cost-
cutting environment.
The reality is that the competition with the civilian
nursing market has increased dramatically over the last few
years. Continued erosion in our health education and training
budgets for our military nurses adversely impact our ability to
provide the professional development necessary to prepare our
officers for the rigors of senior leadership and advanced
nursing practice.
I am happy to report that we have been extremely successful
over the past few years with specialty and certification pay
for our nurse practitioners, our certified registered nurse
anesthetists, and our certified nurse midwives. I would ask
that we continue with additional economic incentives that are
necessary to encourage military nurses to enter low-density
specialty areas and remain in practice longer than the current
1-year post-training obligation.
Our civilian work force, comprising anywhere from 33 to 55
percent of our nursing force structure, presents equal
challenges. Current vacancy rates range from 27 percent on the
high range to 7 percent on the low range. Coupled with costly
15 to 35 percent turnover rates and significant differences in
hiring practices between the government and the private
sectors, we are unable to maintain an adequate level of
civilian nurses to meet our needs.
Our civilian competitors are able to provide timely hiring
actions, in some instances as little as one week from
application to the first day they arrive in the facility.
Conversely, the average length of time to bring a new RN into a
military treatment facility is 93 days. Civilian hiring
practices constrain and entangle what should be an expeditious
process for us.
We have all worked diligently here at the front table to
overcome these barriers through innovative practices. The Army
Nurse Corps has partnered with the Air Force, utilizing Air
Force nurses to temporarily fill civilian vacancies until
hiring actions are completed. The Navy similarly has used
extensive resource-sharing agreements and contracts to meet
their needs.
Teams of civilian and military leaders have met to discuss
ways to streamline civilian recruitment and hiring processes
and identify sorely needed revisions in outdated civilian
standards to assist us in meeting our current needs. We must
create a system that is not cumbersome and one that does not
threaten human resource availability. We must have the funding
to develop and implement accession programs that meet the
current critical need for swift hiring of highly qualified
candidates and to continue to develop an effective career
progression ladder for them.
Funding civilian training and incentive programs that
enhance professional development, leadership skills, and work
force productivity is absolutely essential. With the passage of
the 2001 National Defense Authorization Act that expands, of
course, our health care to a greater number of our
beneficiaries, the numbers of beneficiaries enrolled in our
military health care facilities is expected to rise, as is the
severity of illness of those patients. The increased demand for
health services, the aging of the population, and the need to
maintain the appropriate mix of patients necessary to maintain
both our clinical proficiencies and our readiness posture
mandate that we have sufficient nurses to provide these much
needed health care services. We must act expeditiously in order
to allow us to continue to adequately support this critical
patient care mission.

PREPARED STATEMENT

In closing, I want to thank you, Mr. Chairman, Senator
Inouye, for the opportunity to address these critical issues
with you. We are all at this table very, very grateful for your
assistance in keeping our military nursing corps strong and
ready for the challenges that face us in the future.
Thank you.
[The statement follows:]

PREPARED STATEMENT OF BRIGADIER GENERAL WILLIAM T. BESTER

Mr. Chairman and distinguished members of the committee, I am
Brigadier General William T. Bester, Assistant Surgeon General for
Force Projection and Chief, Army Nurse Corps. I am both pleased and
honored to testify before you today. I look upon my appointment as the
21st Chief of the Army Nurse Corps as both an honor and a privilege.
The opportunity to serve with and direct some of the finest men and
women in the Army Medical Department (AMEDD) is a professional reward
that far surpasses anything that I could have thought possible some
twenty-seven years ago when I first joined this outstanding
professional nursing organization. I have an absolute commitment to
serve the Army Nurse Corps with the same tenacious spirit of my
predecessors.
In that same context, I stand committed to fully support The Army
Surgeon General in his quest to maintain our high quality of peacetime
healthcare while, at the same time, being trained, equipped and capable
of supporting the medical needs of our deployed forces. In an
environment of limited resources, he has charged me to be actively
engaged in our corporate business plans that will allow us to generate
the greatest benefit from the resources, both human and fiscal, that we
have available to us.
This morning my focus will highlight three important concerns that
relate to the ability of the Army Nurse Corps to serve the nation:
manning, the impact of operational deployments and the importance of
the congressionally sponsored TriService Nursing Research Program. I
would first like to begin by discussing manning.
Manning: The demand for professional nurses in America is
increasing while the supply of professional nurses is declining;
according to a policy statement from Tri-Council members, The American
Association of Colleges of Nursing (AACN), The American Nurses
Association (ANA), and The American Organization of Nurse Executives
(AONE) dated 31 January 2001. Last year, you will recall, all armed
services stressed the need for continued incentives to attract and
retain military members in light of the present and future nursing
shortages. We greatly appreciate the Senate directing the Health
Professionals Retention/Accession Incentives Study (HPRAIS), currently
being conducted by the Center for Naval Analyses (CNA), that is
evaluating the adequacy of special pays and bonuses for military health
care professionals. We are hopeful that this study will identify the
need for incentives for both our military nurse force and our
Department of Army (DA) civilian nurse workforce.
The Bureau of Labor Statistics reports that Registered Nurse
positions will increase 23 percent by 2006. According to the policy
statement form the Tri-Council members, AACN, ANA, and AONE,
enrollments in all basic RN preparation programs have declined each
year for the last five consecutive years. According to the National
League for Nursing (NLN), between 1995 and 1999, the number of programs
of most types has increased in the United States 2.6 percent. Despite
this overall growth, the number of students enrolled in and graduating
from nursing programs has declined 13.6 percent. The clear trend is
toward an increase in the number of programs occurring simultaneously
with a decrease in the number of enrollments and graduations from these
programs. For the fourth year in a row, Bachelor of Science in Nursing
(BSN) enrollments are down 5 percent. Attractive, competing career
options with greater compensation are luring young adults away from
nursing as a career choice. To compound the shortage, the current
workforce of civilian nurses is rapidly approaching retirement age. The
average age of civilian RNs is 45.1 years. By 2010 it is estimated that
more than 40 percent of the nursing workforce will be over the age of
50 and by 2015 approximately 50 percent of the nursing workforce will
be retirement eligible.
These trends--decreased nursing school enrollments and an aging
workforce--have a dramatic impact on our ability to attract and retain
qualified military and civilian nurses. In the early 1990's our Corps
made a commitment to use the Reserve Officers' Training Corps (ROTC) as
our main source of accessions. With the nursing shortage of the last
three years however, we have seen a decline in scholarship requests and
our ROTC accession numbers have decreased 50 percent, from a high of
228 in 1996 to a projected low of 113 for 2001. Although U.S. Army
Recruiting Command (USAREC) has made up a significant part of this
shortfall, direct accessions of nurses aged 40 years and over have
become much more common. This creates an older, limited-term, non-
career track force. This approach further shrinks our already eroding
mid- and late-career captain and major ranks that supply the majority
of our expert clinical specialty base. Having to recruit a greater
number of working nurses means we must compete with the civilian
institutions for the same critical specialties at a time when they are
offering streamlined hiring practices and significant recruitment and
retention bonuses. Furthermore, continued erosions in our health
education and training budgets for our military nurses adversely impact
our ability to provide the professional development necessary to
prepare our officers for the rigors of senior leadership and advanced
practice. Our junior officers look to these educational offerings as a
means to advancement and a critical motivator for retention.
Our civilian ranks present a more acute dilemma. Within our current
AMEDD nursing structure approximately 50 percent of nursing care is
provided by Department of Army (DA) civilian nurses. Over the last
three years our inventory has not met the level of need. The reasons
are varied. Current vacancy rates for authorized positions vary by
region from a high of 27 percent to a low of 7 percent. Coupled with
costly 15 percent to 35 percent turnover rates and significant
differences in hiring practices between the government and private
sector, expeditious hiring is tenuous at best. The average processing
time from application to hiring is 93 days.
Much has been done to alleviate current and future shortages.
Recruitment bonuses and specialty course guarantees continue to attract
nurses to the military. The Army Nurse Corps has partnered with the Air
Force utilizing Air Force nurses to temporarily fill civilian vacancies
until hiring actions are completed. Army civilian and military leaders
are exploring ways to streamline civilian recruitment and hiring
processes. Further action and support are needed if we are to develop a
responsive hiring system.
Several key initiatives must be realized to ensure that a robust
force of civilian and military nurses is available to care for our
ever-increasing number of beneficiaries seeking care at our Army
Medical Treatment Facilities. Achieving recruiting goals at the entry
level and retention past initial and subsequent tours is of great
concern. The success of recruitment bonuses proved its worth and now
must be expanded to retention bonuses for officers completing their
first tour. Furthermore, economic incentives are necessary to encourage
military nurses to enter specialty areas and remain in practice longer
than the current one-year post-training obligation. The current
specialty and certification pay for our nurse practitioners, certified
nurse anesthetists, and certified nurse midwives, demonstrates the
success of such initiatives.
Even greater efforts must be dedicated to achieving dramatic
improvements in our civilian recruitment and retention initiatives.
Government hiring practices are archaic, cumbersome, and threaten human
resource availability. Wages are set by law and not easily adapted to
market forces. We must have the flexibility to develop and implement
accession programs that meet the current critical need for the swift
hiring of highly qualified candidates. Funding civilian training and
incentive programs that enhance professional development, leadership,
and work force productivity, such as the revision of the Army Civilian
Training Education Document System and civilian tuition assistance
programs, are a must. We ask this committee to support necessary
changes to simplify or eliminate outmoded hiring rules and produce a
modern, streamlined personnel system, one that is more responsive to
our needs.
Making such changes now will enable the military treatment
facilities to execute innovative business plans designed to provide for
the preventive, acute, and chronic health care needs of its
beneficiaries. With the passage of the 2001 National Defense
Authorization Act expanding health care for a greater number of
beneficiaries, the numbers of beneficiaries enrolled in our military
health care facilities is expected to rise, as is the severity of
illness of our patients. The increased demand for health services,
aging of the population, and the need to maintain the appropriate
``mix'' of patients necessary to maintain our clinical proficiency and
readiness, mandate that we have sufficient nurses to provide health
care services. We must act expeditiously in order to allow us to
continue to adequately support this critical patient care mission.
Deployments: In an environment of persistent personnel shortages,
Army Nurses continue to provide services around the world whenever and
wherever they are needed. In fiscal year 2000, 444 Army Nurse Corps
Officers deployed to over 10 countries consuming 12,116 man-days not
available to deliver the TRICARE benefit. For fiscal year 2001 we are
on a glidepath to exceed that amount by 23 percent, with 227 Army
Nurses who have already deployed, consuming 6955 man-days.
Army nurses continue their expert performance in support of the
worldwide missions. During the 6-month deployment of the 212th Mobile
Army Surgical Hospital (MASH) to Bosnia, Army nursing personnel were
responsible for daily health support to over 10,000 Kosovo Force 4
(KFOR) soldiers and emergent care for over 250,000 local nationals.
These personnel provided direct care to over 339 trauma and major
medical patients, including victims of motor vehicle accidents, gunshot
wounds, and grenade and mine blast injuries. In the course of providing
host nation medical support, the 212th MASH's medical and nursing staff
provided weekly visits to the rural town of Gnjilane to instruct the
local hospital staff in basic and emergency medical care. Their efforts
significantly increased the host nations' ability to provide competent
regional healthcare. Shortly after their arrival at Eagle Base in
Bosnia, the 249th General Hospital's (Forward) nursing personnel
actively collaborated in establishing a telemedicine link with four
isolated base camp aid stations establishing weekly telemedicine
conferences. Such conferences significantly reduced numbers of
evacuated patients through prompt diagnoses and treatment and increased
unit level education for division medics. Task Force Med Eagle received
recognition as a Training Site for the National Registry for Emergency
Medical Technicians. This site now facilitates the 91W transition
training for all follow-on units. This action has far reaching
implications, ensuring that up-to-date combat medic training and
enlisted professional career development continues, even when our
soldiers are deployed. The 67th Combat Support Hospital was
instrumental in rebuilding a local hospital and educating the local
national staff, ensuring its ability to treat trauma patients.
Additionally, in just 3 months, this unit volunteered countless hours
to repair a badly damaged local school void of heat, electricity,
water, and functional classrooms, and stock it with donated school
supplies from Germany and the United States. While participating in
Joint Task Force Bravo in Honduras, US military nursing personnel and
Honduran military personnel conducted a comprehensive Health Project at
the Honduran Department of Defense in Tegucigalpa. This activity
enhanced international medical cooperation between Honduran and
American armed forces through education, information sharing, and
interdisciplinary collaboration.
Not only are our active duty Army Nurse Corps Officers fully
engaged, but our reserve family is in full support of our deployed
forces as well. In August of 2000, the 914th Combat Support Hospital
from Backlick, Ohio traveled to the southwestern valleys of Columbia,
South America for a 15-day Medical Readiness Training Exercise. During
the 10 days the clinics were in operation, the staff treated over 6,400
patients. Currently the 313th Combat Support Hospital (Hospital Unit
Surgical), from Springfield, Missouri is staffing Task Force Med Falcon
in Kosovo, continuing to provide quality healthcare to the
approximately 10,000 NATO soldiers in the sector.
These few examples serve to highlight once again that Army Nurses
possess the expert clinical skills, critical thinking abilities and
dedication necessary to execute the most challenging mission in the
most austere of environments, never compromising patient care.
Nursing Research: Thanks to your continued support, the TriService
Nursing Research Program (TSNRP) continues to increase our
understanding of the most critical issues facing the delivery of
military nursing care today. One example is the staffing shortages
mentioned earlier in the testimony and their current impact on our
ability to deliver timely and quality nursing care. With the aid of
TriService Nursing Research funding, Army nurse researchers are working
with experts from the California Nursing Outcomes Coalition and the
University of California, San Francisco to establish an Army-wide
nursing database that uses standard definitions and data extraction
techniques to measure patient outcomes. The Army nursing Outcomes
Database will be used in three key ways. First, participating MTFs will
use the data for internal quality improvement efforts. Second, the data
will provide a foundation for research and other systematic studies
assessing the impact of skill mix, educational level, and other factors
on indicators of health, quality and safety. Third, data will be used
to make evidence-based Army health care policy decisions that affect
patient safety, educational planning, health systems design, and nurse
staffing. This year I provided direction to Army nurse researchers to
re-prioritize nursing research programs within the Army Medical
Department. These programs will focus on the most compelling problems
over which we have an ability to influence outcomes. Among these are:
(1) identification of specialized clinical skill competency training
and sustainment requirements; (2) deployment health challenges (nursing
care requirements during current mobilization and operations other-
than-war situations); (3) issues related to the nursing care of our
beneficiaries in garrison; (4) identification of acute care nurse
staffing requirements and their relationship to patient outcomes; (5)
issues related to civilian and military nurse retention in this era of
critical shortages;) and finally, (6) program evaluation of our core
education programs for nursing personnel. I am confident that Army
Nurse researchers will continue to add to the scientific body of
knowledge underlying military nursing practice.
Your support of the TriService Nursing Research Program is
fundamental to the success of military nursing research. I would like
to share some brief examples of our successes. In a series of
TriService Nursing Research funded studies, two self-diagnosis kits
were developed that can accurately determine the presence of vaginal or
urinary tract infections in deployed female soldiers. These kits will
allow self-diagnosis and treatment. Implications for military women
deployed in austere environments include less time away from duty,
increased manpower availability for mission-related operations, and
greater health and comfort levels.
Research not only answers questions; it frequently uncovers gaps in
what we know. In a study evaluating intravenous catheter insertion by
nursing personnel wearing chemical-biological protective gear, nurse
researchers discovered that some personnel encountered difficulties
with task completion due to claustrophobia associated with the
confinement of the protective clothing. Based on this finding, further
study will address this issue in an attempt to find the means to
improve nurses' performance in the chem-bio environment.
The TriService Research Advisory Group, fully supported by all
Federal Nursing Chiefs, has developed a strategic plan that prioritizes
the most critical and relevant topics for future military nursing
research. These topics include: (1) deployment health--studies that
analyze factors that affect operational readiness before, during, and
after deployment; (2) development and sustainment of skills--studies
that address the acquisition and maintenance of key nursing
competencies; (3) clinical practice outcomes management--studies that
determine the most effective health care interventions across the full
spectrum of care from health promotion to disease management in
military populations; (4) recruitment and retention--studies that
identify strategies to improve force management of military and
civilian nurses within the Department of Defense (DOD); and (5)
clinical resource management--studies that determine staffing models
that optimize the utilization of DOD nursing personnel.
Military nurses are ever vigilant of the health care needs of those
we serve. We possess a unique understanding and knowledge to provide
the care required by our beneficiaries. Continued congressional support
for the TriService Nursing Research Program is essential for military
nurse researchers to conduct studies to improve practice and develop
policy within the DOD.
Army Nurses are a key spoke in the wheel of Army Medicine.
Collaboration with our sister Corps within the Army Medical Department
will insure that we capitalize on every opportunity to support The Army
Surgeon General's vision of providing the highest quality of patient
care predicated on evidenced-based practice and business plans that
utilize our fiscal and human resources in the most efficient and
effective way possible.
Finally, I would like to express my unqualified support of the
Uniformed Services University of the Health Sciences (USUHS). The
Graduate School of Nursing has been instrumental in providing trained
Certified Registered Nurse Anesthetists and Family Nurse Practitioners.
Most importantly, USUHS has become the sole educator of our Family
Nurse Practitioners, saving the Army Medical Department in excess of
$300,000.00 annually in Health Education Funds. Graduates of the USUHS
programs have excelled masterfully and have enjoyed a 100 percent pass
rate on their certification exams. Our continued affiliation with USUHS
is a must if we are to maintain sufficient numbers of practitioners
necessary to support our primary care mission.
In a closing note, on February 2, 2001, the Army Nurse Corps
celebrated 100 years of nursing service to our country. Army Nurses
reflected on our illustrious past and applauded our accomplishments of
service to our soldiers. Now we are poised and ready to address the
challenges of the future, with the same drive, professionalism and
dedication as our predecessors. We will be successful. Army Nurses
remain Ready, Caring, and Proud. Thank you for this opportunity to
address Army Nursing. We are grateful for your assistance in keeping
the force strong for the future.

Senator Inouye. I thank you very much, General Bester, and
congratulations on your new mission.
General Bester. Thank you, sir.
Senator Inouye. May I proceed?
Senator Stevens. Yes.

PROCESSING APPLICATIONS

Senator Inouye. General Bester, you have noted that it
takes an average of 93 days to process applications for new
nursing positions. Who is responsible for processing civilian
nursing applications, your offices or some other organization?
General Bester. No, sir, our civilian personnel challenges.
There are a number of steps in the process and we have blocked
those steps with our folks and we are trying to decrease the
processing time, which by the way, sir, we have decreased some
already since we have started addressing the issue.
But it really needs to come down much more than it already
has, because what happens is is we get very interested
applicants. Let me use Brooke Army Medical Center down in San
Antonio for a recent example. We had a job fair down there and
had 100 very interested nurses who were interested in working
at that beautiful health care facility that we have. The issue
is that the processing time was so long that they took other
offers downtown, not so much because they were being offered
any more money, which they may have been, but they were really
interested in working at Brooke Army Medical Center, but they
were not interested in waiting 2, 3, or 4 months to be
processed.
Senator Inouye. Why did it take so long?
General Bester. We have, sir, built-in obstacles in our
hiring system that just prevent us from expeditiously bringing
people on into our civilian nursing system.
Senator Inouye. Who is responsible for the hiring of
nurses?
General Bester. Our civilian----
Senator Inouye. Your office?
General Bester. No, sir. We identify the individuals that
we want hired, but we have to go through the civilian personnel
office to hire those individuals.
Senator Inouye. Would it make a difference if you got the
responsibility?
General Bester. Yes, sir.
Senator Inouye. Would the others feel the same way?
Admiral Martin. Yes, sir.
General Brannon. Yes, sir.
Senator Inouye. So right now you depend upon another
office, which is not in your profession, to do the recruiting?
Admiral Martin. Yes, sir, for civil service personnel the
Office of Personnel Management (OPM) recruits and hires all
these individuals.
Senator Stevens. What about uniformed people?
Admiral Martin. No, sir, we do that.
General Brannon. We do that.
Senator Stevens. You do it directly?
Admiral Martin. Each service has some type of a recruiting
command where we actually have active duty nurses
participating.
Senator Stevens. He is asking, are you doing it? You
recruit your own people?
Admiral Martin. Yes, sir.
Senator Inouye. But not the civilians?
Admiral Martin. No, sir.
Senator Inouye. If you had the authority to recruit
civilian nurses, it would be done much more expeditiously,
would it not?
Admiral Martin. Yes, sir.
Senator Inouye. Would the surgeons general oppose this?
General Carlton. No, sir. We support it fully.
Senator Inouye. You support it.
Senator Stevens. We will have to discuss that with the
Government Affairs Committee, but I understand you are
interested.

CERTIFIED REGISTERED NURSE ANESTHETISTS (CRNA)

Senator Inouye. How successful has the Army, Navy, and Air
Force Nurse Corps been in retaining the USUHS Graduate School
of Nursing advanced practice nurses?

NURSE ANESTHETISTS

General Brannon. I think we struggle a little bit, sir,
with retaining our certified registered nurse anesthetists.
Many of them will retire, but often they do not stay past their
20-year obligation because of the compensation benefits in the
civilian world. But that school has been very successful in
producing full-up, readiness-ready CRNA's who perform
outstanding service while they are with us.
Senator Inouye. All of them--I gather you have a 100
percent pass rate?
General Brannon. Absolutely. We are very proud of that
quality education, sir.
Senator Inouye. It is the only nursing school that has done
that in this Nation.
One of the problems we seem to have from underfunding, as
noted by the surgeon generals, is the fact that we have to
either postpone or cut back programs as we get close to the end
of the fiscal year. One program that suffers every fiscal year
is the continuing education program. Has that affected the
nursing profession in your experience?
Admiral Martin. Yes, sir, it has. As our dollars become
tighter, we then cut down on sending nurses to professional
education programs, certification programs, and so forth. You
need to continuously train and send professionals to either
challenging courses or updates for professional education.
Senator Inouye. Do you have common problems, for example,
in recruiting active duty personnel? In the Air Force do you
find it a bit easier recruiting than the Army? Do the services
find that women would rather go into the Army or the Air Force
or the Navy?
General Bester. Senator, I think they all want to come in
the Army.
Admiral Martin. I believe they like our uniform better.
General Brannon. They all want to be flight nurses.
We all have our advantages, I think, sir.
Senator Inouye. Recently, General Bester, there was a
revision in the Army regulations affecting the standard of
practice for certified registered nurse anesthetists. How is
that working out?
General Bester. Sir, I can report that that is moving along
very well. General Peake approved that revision last November,
which is our Army Regulation 40-48, which really defines our
scope of practice for CRNA's. What it really has done is codify
the way we have been practicing anesthesia for a number of
years now, and we have got that new revision implemented in
most of our facilities. The last couple facilities that it will
be coming on line here, it will be implemented there very soon.
So I can report to you that it is moving along very well,
being supported by both the surgeon general and the Chief of
the medical corps, Major General Kevin Kylie.
Senator Inouye. Are the anesthesiologists satisfied?
General Bester. Probably not every one, sir. But we are
working the issues in particular institutions and I think we
are working through the issue very well.
Senator Inouye. Do you think that will have an impact on
retention?
General Bester. Retention for us, sir, for CRNA's? Yes,
sir. I think the practice environment, that coupled with the
$15,000 bonus that they currently get that you approved some
years back, I think are the two factors that allowed us to come
from about a 73 percent fill rate in the early nineties to
where we currently are, which is over 90 percent fill in our
CRNA positions, which is a really good news story.

FLIGHT NURSE TRAINING

Senator Inouye. Is there a different type of training for a
flight nurse as compared to an Army nurse?
General Brannon. Well, flight nurse is an additional
training and we send our nurses to a specific school that
teaches them some of the physiological changes of flight and
some of the nursing procedures and things that they need to
know. So it's certainly a postgraduate training for that
specific job. Not everyone gets to be a flight nurse, but we do
have some opportunities for that.
Senator Inouye. We have a situation where the Marines have
no medical corps. What sort of arrangement does the nurses
corps have with the Marines?
Admiral Martin. We have nurses that are assigned to various
Marine Corps units right now throughout the world. We have
quite a few nurses that are assigned with the Marines.
Senator Inouye. Who is responsible for the training of the
corpsmen in the Marines?
Admiral Martin. The corpsmen all go through a field medical
program that is an established program before they go to the
Marines. There are physicians working in the Marine battalions
and detachments and there are also various nurses working with
them as well to keep up their skills.
Senator Inouye. Mr. Chairman, I have many other questions,
but I would like to submit them to the surgeon generals and the
nurses as well.

RECRUITING PROGRAMS

Senator Stevens. We all recognize Senator Inouye's
leadership in dealing with your services.
I do not have any questions, but I have two areas I would
like to talk to you about. One, what kind of outreach do you
have to the universities, the State universities, and other
institutions that do graduate nurses? I ask that because one of
the things that happened in my State is we found there are an
overwhelming number of people that wanted to take the nurses'
courses, but then they did not have any opportunity for
employment, they have so few facilities in the State.
Do you really reach out to those universities for
recruitment, like the other services do, in the early part of
their training? What is the outreach that you have?
Admiral Martin. I can say for the Navy, we have Navy Nurse
Corps recruiters assigned throughout the United States and they
make it a point to visit all of the colleges and universities
in their areas. When they have the various professional days
and recruitment programs, they participate in those.
Senator Stevens. They are your people or they are just Navy
recruiters?
Admiral Martin. No, sir, they are Navy nurses.
Senator Stevens. Do you do the same thing, General?
General Bester. Yes, sir. We also have recruiters in every
State and in Puerto Rico. We have Navy nurses assigned to the
recruiting command and then we have recruiters that are
identified specifically to the nurse recruiting mission.
General Brannon. Ours is a little different and I think
that is a problem, Senator Stevens. We do not have a lot of
nurses actually assigned to primary recruiting responsibility
where they are out making that interface with potential nurse
recruits. They are often enlisted members or other corps. What
we have done to try to fill that gap is I have written a letter
to each recruiting service and volunteered my services and
those of nurses in nearby facilities to go out and speak with
groups. I speak at any national conference I can where I know
there will be civilian nurses. I will be going to the Student
Nurse Association meeting and taking recruiters with me so we
can potentially get out there.
But I think we would have an advantage if there were more
nurses in the recruiting business for the Air Force.
Senator Stevens. All right. Let us get just to our basic
business here, which is money. Are you all caught up with the
shortfall? Are you going to be part of that request for
supplementals this year? Admiral?
Admiral Martin. Sir, that will all be a part of our
proposed budget, yes, and we will be caught up in it.
Senator Stevens. Your funds are included in moneys for the
surgeon generals?
Admiral Martin. Yes, sir. Yes, sir.
Senator Stevens. How extensive is your shortfall?
Admiral Martin. Would you like for me to speak as the
Director of the Nurse Corps or as the commander of Bethesda?
Senator Stevens. I would like for you just to tell me the
truth.
Admiral Martin. Well, as the Director of the Nurse Corps,
we do not put a direct price tag on all the education that goes
on within all of our various facilities. So I do not fund that
out of a central Nurse Corps fund. Each of our medical facility
commanders funds the number of nurses that they have out of
their direct health care dollars working right at their
commands for any of their education.
Senator Stevens. You do not get a budget and then you
fulfill the needs for your service?
Admiral Martin. No, sir. That comes out of the command
funds.
Senator Stevens. Well, how do they treat you?
Admiral Martin. Pardon me?
Senator Stevens. Are you getting your requests fulfilled?
Admiral Martin. Well, each of the nurses at the various
commands, they go to their commanding officers to request funds
for any type of programs and so forth. What we do look for as
far as central funds is any type of bonuses that we request or
augmentation of bonuses. Our school programs are funded out of
the central command when we send individuals to various
training programs, say to become certified nurse anesthetists
or nurse practitioners.

VENTURE CAPITAL

General Bester. Senator, if I may, I think along these
lines, and what General Peake referred to a little bit earlier,
is the venture capital issue when we are asking for these
additional dollars is very, very important, because as we need
additional nurses, for example, those come in the form of the
business plans that General Peake referred to, and that venture
capital up front will pay you dividends down the road, but it
might not be seen for a year or 2 years or 3 years down the
road.
But it is absolutely essential that we get that venture
capital, so we then can go up and purchase those nurses and
work those increases with this increased benefit population
that we are going to get via the National Defense Authorization
Act.
Senator Stevens. You do not get line item funding from us?
General Bester. No, sir.
Admiral Martin. No, sir.
Senator Stevens. Would you like to get it?
Admiral Martin. No, sir.
General Bester. No, sir.
General Brannon. I cannot separate what we do as nursing
from what our medical service does. We are team members and all
of our programs are really woven in with the total benefit. So
I could provide more robust nursing services and support to
patients, but if we did not provide those programs it would not
really help very much.
I think the entire system needs to be resourced. We are
certainly getting our fair share. However, it just is not
adequate to progress as we would like.
Admiral Martin. For example, sir, as the commander of
Bethesda I have a nursing shortage. I need civilian nurses to
fill vacant billets right now. But I buy those out of my
command funds. I pay for those positions, those nursing assets,
out of my command funds, not out of a central Nurse Corps fund.
Senator Stevens. I am worried about, and I think Senator
Inouye is, too, about the word we are getting that there is a
crisis in nurse staffing generally in the country. I assume
that you are suffering from that as much as civilian hospitals
are. If your recruiting is done by your own people, where do
you get the payment for those? You say you send out people to
do recruiting. It is not done by the medical corps, right?
General Bester. We have authorized positions, though, sir,
that are authorized into those slots. So we have been
authorized the moneys in the military pay system to pay for
those individuals who are on the recruiting command doing those
jobs.
Senator Stevens. Do you have a sufficient number? If
recruiting is going down, I would like to find out what we do
to build it up. Where do we put money to give you some
additional boost in getting more people?
General Bester. Sir, I think if we can funnel some moneys--
we are going to continue to work hard, of course, in the
recruiting effort for our active duty divisions. But if we can
get the money that we have discussed here for our civilian
nurses and if we can streamline that process, I think that that
will answer the mail on a lot of the problems that we are
currently having.
Senator Stevens. What are the education requirements for
you people to come in as just recruits, new recruits as nurses?
General Bester. Baccalaureate degree.
Senator Stevens. Same with you?
Admiral Martin. Yes, sir.
Senator Stevens. Same with you?
General Brannon. Yes, sir.
Senator Stevens. Well, Senator, do you have anything
further?

RESERVE OFFICER TRAINING CORPS

Senator Inouye. I would like to follow up by asking a crazy
question. When I was in high school I was in ROTC. I am
certain, although we do not admit this matter publicly, one of
the major reasons to keep the ROTC program on college campuses
and high school campuses is it helps in recruiting. Have you
ever considered setting up ROTC for nurses?
Admiral Martin. Yes, sir. We have a nursing ROTC program in
the Navy.
Senator Inouye. Where do you have them?
Admiral Martin. We have them at any of the colleges or
universities that have a Navy ROTC program.
Senator Inouye. Not in high schools?
Admiral Martin. No, sir. In college.
General Bester. Senator, we also have an Army nurse ROTC
program, but we do not have any in the high schools.
Senator Inouye. Is it successful?
General Bester. It has been in the past for us. I know the
Navy is very successful. We are not successful at the current
time and I think it is because of some issues, some decisions
we made a few years ago. We have corrected those and we are
already starting to see a swing back up.
The unfortunate thing, of course, about ROTC is you do not
see anything come out of the pipeline for 3 or 4 years once you
make your decision. So I think in the next 3 or 4 years we will
see that turned around. But at the current time, this year, for
example, Senator, we had planned on ROTC bringing in 175 nurses
and we are going to bring in 113.
Senator Inouye. And the Air Force?
General Brannon. We do have an Air Force college level ROTC
program. It is small, but we are increasing those numbers, and
we have been thus far successful in bringing folks in under
that. I am thinking we are at the level of 25 this year, so it
is small.
Senator Stevens. Do you get anyone from academies who come
in to you?
Admiral Martin. No, sir.
Senator Stevens. You?
General Bester. No, sir.
General Carlton. Yes, we have a program at the Air Force
Academy training folks directly.
General Brannon. Yes, sir.
Admiral Martin. The Naval Academy does not have that
option.
Senator Inouye. Let us know of ideas you have on recruiting
and retention for nursing.
Senator Stevens. Let me ask you another question that is
sort of off the wall. Do you keep track of the people that have
been in your services who go on and are working in civilian
hospitals throughout the country?
General Bester. We try to recruit, sir, as they leave
active duty, we try to recruit to go into the reserves. We talk
to each and every one as they leave active duty. And we have
recovered--we had a very low select rate in the Army about 3
years ago and we have recruited some of those folks that were
asked to leave the Army in the 1997 time frame. We have now
brought those back from active duty.
Senator Stevens. I am not talking about active duty. I am
looking at what kind of a cadre we would have to deal with that
high school ROTC if we decided to start one. I do not know how
many of your people who have been in the service are out there
in the civilian community and to what extent they might be
available to be members of a guard or reserve component that
would help us deal with the ROTC.
We are very familiar with the fact that the ROTC has
worked. A fellow named Colin Powell, who attended City College
of the City of New York, is a good example. And they come
through the high school ROTC. A great number of our people have
come in through that channel. I would like to explore it.
Anything else, Senator?

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. No. I have got a whole flock of questions
here, but it is lunch time.
Senator Stevens. Well, we do thank you very much and we are
proud of what you do. As we said, both of us have been
beneficiaries of your services and we thank you for the kind of
people you recruit and train and how you really effectively
serve our country.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to Lt. Gen. James B. Peake

Questions Submitted by Senator Ted Stevens

FISCAL YEAR 2000 SUPPLEMENTAL

Question. How much relief has your direct care system received from
the fiscal year 2000 Emergency Supplemental?
Answer. In fiscal year 2000 the Army Medical Department (AMEDD)
direct care system received $96.9 million from the fiscal year 2000/01
Emergency Supplemental. These funds resourced Army military treatment
facility (MTF) incremental expenditures for the Tricare Senior Prime
(TSP) demonstration, the escalating costs of pharmaceuticals, and
revised financing expenditures that exceeded programmed funding.
The multi-year nature of the appropriation gave us the flexibility
to carry forward funds not essential in fiscal year 2000 to satisfy
fiscal year 2001 requirements. The Army carried forward $49 million for
the TSP demo and revised financing cost over-runs. However, in fiscal
year 2001 the OSD Comptroller redirected the residual $49 million to
the global settlement of managed care support contracts.
Language in last year's bill allowed the Department flexibility in
determining how the supplemental money would be used. Unfortunately,
the rise in private sector costs and the decision to globally settle
outstanding obligations to our managed care contractors limited the
direct system benefit from the supplemental.
Question. What happens when your MTFs are the first to pay the
bills, or the last to receive any funding relief?
Answer. When funds are diverted from the direct care system to
cover private sector care bills or when our MTFs are the last to
receive funding, we must initiate actions to curtail spending.
Expenditures on real property maintenance (RPM) and equipment are
limited to emergency items only. These areas recover most readily if
funds are delayed. Other actions taken include: Curtail all non-mission
essential travel to include Continuing Medical Education; freeze all
hiring for vacancies, both civilian and contractor; defer purchases of
supplies until the next fiscal year; defer contracts for items such as
hospital maintenance; limit pharmacy refills to 30 days; defer elective
surgery to the next fiscal year; and direct operative cases and
procedures into the managed care network. However, it is difficult if
not impossible to recover from these actions. Deferrals create
tremendous backlog in our operations and a bill to be paid in following
years; actions that reduce capability in the MTF result in increased
private sector care costs.
Care not provided in the MTFs ultimately shifts to the more costly
private sector. Such a shift only delays the inevitable. The DHP must
pay the managed care support contract bills from next year's budget
thereby reducing funds available for the direct care system.
Investments in the MTFs would facilitate their recapture of expensive
care from the private sector and contain the cost of the DHP.

CURRENT YEAR DHP FUNDING SHORTFALLS

Question. Do you have enough funds to fully execute your fiscal
year 2001 program? Where are your shortfalls?
Answer. The Army Defense Health Program (DHP) has a total
projected ``direct care'' shortfall in fiscal year 2001 of $330.2
million, however some of Army's shortfall is addressed in OASD(HA)'s
$1.398 billion DHP draft unfinanced requirements list. Full funding of
OASD(HA)'s unfinanced requirements would reduce Army's shortfall to
$207.1 million. Army owes the AMEDD $53.5 million in RPM ($16.5 million
from fiscal year 2000 and $37 million in fiscal year 2001). If these
funds are received by the AMEDD the shortfall is further reduced to
$153.6 million. This shortfall is in addition to any shortfall
identified by TRICARE Management Activity related to the private sector
care Managed Care Support Contract (MCSC). Army's DHP direct care
shortfall can be broken down into four distinctive groups:
--Survival/Fact of Life: replacing lost military with civilian labor
to maintain current patient workload level of effort to
preclude sending patients out to the Managed Care Support
Contract (MCSC) contractors; TRICARE Senior Prime demonstration
project and Revised Financing bills; unachievable outsourcing
and privatization (A-76) savings; funding for data quality
medical coders; AFIP lease and Real Property Maintenance (RPM);
and across the board utility/energy increases. The shortfall
$330.2 million also assumes TMA does not release to MEDCOM
funding held by TMA in a withhold account and Advances in
Medical Practices (AMP) pharmacy dollars not yet distributed to
MEDCOM. The TMA withhold shortfall will be programmatic for it
is calculated in MEDCOM's fiscal year 2001 Total Obligation
Authority.
--New Mission/New Programs: IM/IT special pay bonuses and dollars
needed to ramp up MTFs in support of new benefits authorized by
the Fiscal Year 2001 National Defense Authorization Act (NDAA)
for Medicare-eligible military retiree.
--Infrastructure Sustainment: a sufficient level of maintenance is
needed to maintain MTFs and avoid infrastructure decay. The RPM
shortfall includes funding medical facilities at 2.73 percent
PRV (category 500 medical buildings at 3 percent) versus
current funding levels and RPM funding owed MEDCOM as a result
of fiscal year 1999 PBD 041 directive, yet not received by
MEDCOM.
--Business Initiatives: investment capital needed to increase the
AMEDD's capacity to render cost effective, quality care in the
direct system as an alternative to purchasing contract care.
These funds are needed for health care infrastructure
improvements such as enhanced provider/patient staff ratios,
more appropriate support staff/provider ratios, and facility
modifications.
Question. Is your direct care system fully funded in fiscal year
2001? How will your fiscal year 2001 shortfalls impact delivery of care
in your hospitals and clinics?
Answer. Our direct care system is experiencing a significant
funding shortfall in fiscal year 2001. The Army Defense Health Program
(DHP) has a total projected ``direct care'' shortfall in fiscal year
2001 of $330.2 million. The $1.398 billion request from OASD(HA) will
partially address this requirement. Full funding of the OASD(HA)
unfinanced requirements would reduce Army's shortfall to $207.1
million. This shortfall will be further reduced by $53.5 million, funds
to be paid to the Army Medical Department (AMEDD) by the Army for
essential real property maintenance. After the above actions, our
direct care system will still face a $153.6 million unfinanced
requirement.
Without adequate funding our hospitals and clinics must initiate
management actions to reduce spending such as: enforce hire lag; defer
maintenance and repair of facilities; defer purchases of supplies and
equipment; limit pharmacy refills to 30 days; defer elective surgery;
curtail non mission essential travel to include Continuing Health
Education. All of these actions are detrimental to hospital and clinic
operations. Hire lag produces artificial savings in that delays in
filling key personnel positions force our hospitals and clinics to
refer patients to the private sector for their care. Ultimately such
actions are more costly for the military health system (MHS), but those
costs are deferred to either later in the year or the next fiscal year.
Similarly, curtailment of all but emergency real property maintenance
only creates an unmanageable backlog that in the long run produces more
emergent conditions. Eventually repairs must be made or hospitals will
not meet JCAHO standards.
Recruiting and retaining quality medical personnel is a major
concern of the Army Medical Department (AMEDD). We must retain optimal
aggregate number and specialty mix of qualified clinicians. To
accomplish this we must ensure our physicians have the opportunity to
treat the full spectrum of care required to support the graduate
medical education program, to maintain certification and to function
using industry standard technology and standards of care. Continued
under-funding of our military treatment facilities impairs our efforts
to transform, modernize and optimize the AMEDD.

TRICARE FOR LIFE

Question. To arrive at a cost for ``Tricare for Life'', has DOD
used accurate assumptions for medical and pharmacy inflation rates?
Answer.
Inflation Rates
In the direct care system, we are restricted to using the Bureau of
Labor Statistics Medical CPI for medical expenses (supplies and
contracts) and we used a slightly higher rate for pharmaceuticals (5.5
percent vs. 3.9 percent in fiscal year 2000).
Increased Health Care costs are often incorrectly represented as
simple inflation.
When the media say inflation costs for Prescription Drugs are going
up 10-20 percent they usually mean expenditures. The Consumer Price
Index (CPI) and the Producer Price Index (PPI), measure price changes
only, not total expenditures.
Cost Growth is more than Inflation
Cost Components.--A traditional inflation definition does not
capture changes in:
--Standard of Care (more comprehensive tests are routine now, a newer
hi-tech ancillary service is required, more intensive drug
therapies, etc.) Technology advances increase the cost of every
area of healthcare from drugs to hand-pieces to sutures to
MRI's.
--Changing Demographics of the patient population (population is
aging and they use both a greater volume of services and the
more expensive services.)
--Increased usage by our beneficiaries (new benefits cause an
increased demand. A benefit with little out of pocket for the
consumer will show an even greater increase in demand because
of human behavior).
Cost Control.--Unlike private sector health care organizations, the
military cannot elect out of unprofitable or high cost markets. The
Army maintains hospitals and clinics in areas of the country, which
have less than optimal business environments due to mission
requirements. This diminishes our ability to control costs.
DOD Pharmacy Estimate.--DOD Pharmacy and Therapeutics Committee is
estimating expenditures to be up 15 percent between fiscal year 2000
and fiscal year 2001. This figure includes both inflation and cost
growth components.
Civil Health Insurance.--In the health insurance industry, the
Employment Cost Index (ECI) from the Bureau of Labor and Statistics is
showing an 8.5 percent increase in the average civilian health
insurance premiums for the calendar year 2000. Once again, Health care
costs are rising faster than inflation or even the medical component of
the CPI or PPI.
FEHBP.--HMO premiums nationwide have outpaced inflation for several
years. Premiums will increase between fiscal year 2000 and fiscal year
2001 an average of 8.5 percent. Fee-for-service plans will increase an
average of 10.9 percent from fiscal year 2000 to fiscal year 2001.
Alternative indexing
While CPI and PPI do a good job of reflecting inflation, some other
tool would be more appropriate to gauge the increase in health care
costs because of other influences (Standard of care, changing
demographics, usage rates, technology leaps, etc.)
Milliman & Robertson, Inc., a recognized leader in Health Care cost
forecasting, publishes a Health Cost Index (HCI). This index contains
inflation and other components such as utilization, leverage and mix/
intensity. Their HCI (ALL BENEFITS category) has been 5.15 percent for
fiscal year 1998, 6.6 percent for fiscal year 1999, and 6.5 percent for
fiscal year 2000. The Pharmacy component for the HCI has been 14.1
percent for fiscal year 1998, 18.4 percent for fiscal year 1999 and
17.2 percent for fiscal year 2000 (See attached chart).
The use of the HCI published by Milliman & Robertson or a similar
product would be a more accurate tool for projecting health care costs
in the DOD.
Indexing to FEHBP HMO premiums or fee-for-service increases would
be another alternative using a federal measure.
Question. On October 1st, where do you believe retirees will go for
their new benefit--to the MTF or in the network?
Answer. Approximately 220,000 Medicare-eligible beneficiaries live
near an Army MTF. Retirees who do not live near an MTF will undoubtedly
continue to use their Medicare authorized provider, and have TRICARE
act as 2nd payer. A survey performed by the TRICARE Management Activity
(TMA) in January 2001 confirmed that those who currently use an MTF for
at least some of their medical care, wish to continue to use the MTF.
As faithful stewards of our taxpayers' dollars, I firmly believe that
we must provide as much of their care as possible within our MTFs. I
believe that many retirees prefer using military facilities. They enjoy
continuing their relationship with the military family and have over
the years been most patient and loyal to our health care system.
However, base realignment and closures (BRAC) eliminated many MTFs, the
large drawdown of the military reduced the availability of services at
remaining MTFs and the creation of the TRICARE program reduced their
access to our facilities. Supporting this population is important, not
only to keep our promise, but to allow our physicians full range of
complexity of patient diagnoses to maintain their skills at a level
required for our clinicians who could deploy with relative short
notice. If we cannot provide service that meets these beneficiaries
expectations, they will seek care in the community at significantly
greater cost to the government. We have one opportunity to succeed;
failure to accurately resource our healthcare system to provide this
level of care will ultimately drive higher costs through Medicare, a
significantly greater pharmacy cost, and a less robust and ready
military healthcare system.
Question. If the retirees go to your MTFs, is your system ready and
funded for the new workload?
Answer. If the retirees continue being seen in our MTFs at their
current numbers and utilization, then we are funded for them in our
base. The NDAA changes their benefit and also their patient category.
If more of them begin to be seen in our MTFs or the ones we presently
see want more complete coverage within the MTF, then we will need
supplemental funding.
Our present plan has us continuing our present scope of care for
Tricare Senior Prime (TSP) enrollees with costs in the civilian market
shared with HCFA. We also plan to convert our present space available
care to equivalent lives and provide them the same level of care as
TSP. Our military readiness requirements model requires another 30,000
65+ beneficiaries for which we are not presently funded but which we
could do by leveraging our sunk costs if our budget is augmented. A top
line increase in our budget is required for that.

FULL FUNDING OF THE DEFENSE HEALTH PROGRAM (DHP)

Question. Is your DHP funding stable and predictable? If not, how
does that instability impact your healthcare system?
Answer. The DHP has experienced chronic, recurring shortfalls for a
number of years. These shortfalls have necessitated infusion of funds
during the execution year through budget amendments, reprogramming
actions and supplemental appropriations. Unfortunately these
adjustments are made to the execution year only with no increase to the
top line funding for following years and so do not provide a stable and
predictable funding environment. As a result, we return the next year
once again requesting additional funding. The Department of Defense has
ameliorated some of the out-year shortfalls through reprogramming of
funds from the Service line to the DHP. However, these funds will
primarily dampen the affect of escalating private sector care costs.
Funds reprogrammed to the direct care system resourced pharmaceutical
inflation.
However, the direct care system experiences cost growth that
exceeds the allowable inflation factors. Pharmacy increases are
attributable not only to inflation but to demand factors as well. The
DOD Pharmacy and Therapeutics Committee estimates cumulative
expenditures will increase by 15 percent between fiscal year 2000 and
fiscal year 2001, far exceeding the 5 percent inflation factor allowed
for pharmaceuticals. Furthermore, the inflation factors do not resource
the military facilities for costs associated with maintaining industry
level standards of care nor do they recognize requirements to
incorporate technological advances in our MTF medical practice.
Furthermore, authorized entitlements without commensurate
appropriated funds exacerbate an already problematic situation. For
example, we anticipate increased usage of the military health system
when new benefits produce an increased demand. However, benefits
authorized without commensurate appropriated funds destabilize the DHP
and ensure perpetual requests for supplemental funding.
Stable and predictable funding is necessary to increase physician
satisfaction, retention, and readiness, avoid cost shifting to MCSC and
deliver on commitment to DOD beneficiaries. Absent steady and reliable
funding stream, we can't make wise investment decisions or develop
reasonable investment strategies (i.e. labor, capital expense
equipment). This leads to expensive, stopgap, and insufficient business
operations. Instability can result in cost shifting to MCSC and
increased reliance on the private sector care. Cost shifting to our
managed care support contractors is a losing proposition for both
parties since we jointly share the financial risk of providing health
care. Continued under-funding of our military treatment facilities
impairs our efforts to transform, modernize and optimize the AMEDD.
Without adequate funding our hospitals and clinics must initiate
management actions to reduce spending such as: enforce hire lag; defer
maintenance and repair of facilities; defer purchases of supplies and
equipment; limit pharmacy refills to 30 days; defer elective surgery;
curtail non mission essential travel to include Continuing Health
Education. All of these actions are detrimental to hospital and clinic
operations and can ultimately be more costly for the military health
system (MHS), but those costs are deferred to either later in the year
or the next fiscal year. Similarly, curtailment of all but emergency
real property maintenance only creates an unmanageable backlog that in
the long run produces more emergent conditions. Eventually repairs must
be made or hospitals will not meet JCAHO standards.
Our direct care system is experiencing a significant funding
shortfall in fiscal year 2001. The Army DHP has a projected ``direct
care'' shortfall in fiscal year 2001 of $153.6 million, not addressed
in the $1.398 billion request from OASD(HA). Annual top line funding
must reflect both inflation and cost growth not related to inflation.
Absent an annual top line increase (programmatic fix) the DHP will
continue to require emergency supplemental funding. Potential impacts
of not adequately funding Medical Treatment Facilities include
providing standard of care but to fewer beneficiaries with leakage to
more costly private sector, and endangers physician certification,
military recruitment and retention and patient satisfaction.
Question. Has the DHP budget accurately forecast ``cost savings''
and ``efficiencies?'' Have these savings materialized? Have you had a
loss in buying power over the years?
Answer. The combination of utilization management wedges, notional
adjustments and overly optimistic A-76 savings have created a
significant loss in buying power for the DHP and challenges from fiscal
year 1996 through the present, and well into the POM years. The
cumulative impact of these reductions equals $279.5 million from fiscal
year 1996 through the present as shown below:

CUMULATIVE LOSS OF MEDCOM ``BUYING POWER''
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Program or Requirement -----------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
----------------------------------------------------------------------------------------------------------------
UM & Notional Adjustments............... (81,525) (193,792) (272,989) (272,989) (272,989) (272,989)
A-76 ``Savings'' Decrement.............. .......... .......... .......... .......... (2,637) (6,485)
Total loss in fiscal year 2000 constant (81,525) (193,792) (272,988) (272,989) (275,626) (279,474)
dollars................................
----------------------------------------------------------------------------------------------------------------

VENTURE CAPITAL FOR THE DIRECT CARE SYSTEM

Question. Please tell us about your plans to make your hospitals
and clinics more productive.
Answer. Optimizing productivity is a main effort for the Army
Medical Department today. Military treatment facility commanders know
that their performance will be judged in great part on the
effectiveness of their clinics and hospitals in meeting the full
spectrum of medical needs of the beneficiaries who have signed up for
care. Of course, clinic productivity means more than the simple volume
of patients seen each day. Individual efforts are taking place at each
facility to maximize the throughput, the health and the satisfaction of
our patients. Our productivity plans include focusing on being sure our
patients receive their appropriate preventive medicine interventions so
that their health is maximized and their need for visits and admissions
is less. These combined are likely to be the real secret for more
productivity in our medical system today.
At the corporate level, we have been developing a comprehensive
enrollment capacity model that shows us a detailed picture of the ``as-
is'' at our facilities and allows us to explore and prioritize future
changes and investments. The current model looks at primary care
managers, populations served and enrolled, support staff and exam rooms
available. PCM panel size, FTE availability, and support staff
limitations are documented; and potential effects of suggested
improvements can be examined. Parameters such as support staff and exam
room shortages can be compared across the entire enterprise and
prioritized for intervention based on the highest potential impact.
This model is being expanded into specialty care areas over the coming
months.
In its final form, the model will provide a virtual laboratory in
which different assignments of PCMs, specialists and support staffs can
be modeled and best outcomes chosen. Assignments can be based on best
productivity outcomes for the Army as a whole, not one facility at a
time. This effort and others in our overall optimization effort will
directly and positively impact our productivity and provide more
quality care across the entire Army.
As a recent example, additional efforts include deploying such
advances in medical practice as a new method for processing Pap smears
for our female beneficiaries for a $4.8 million investment this year.
This computer controlled liquid cytology system will result in 90,000
fewer patient visits needed to provide effective screening for cervical
cancer at a cost avoidance of nearly $6 million annually. Those saved
visit appointments can be used to provide additional access to our
clinics for needed care while our female patients require fewer visits
for repeat testing. The system will be operational later this year with
improved processes in place during next year.
Question. Do funding constraints keep you from optimizing your
system? Would a ``venture capital'' fund, or a ``Surgeon General's
Investment and Initiative Fund'' allow you to operate your system more
smartly and at less expense?
Answer. Funding constraints for the Defense Health Program (DHP)
have prevented full optimization of the Military Health System (MHS)
going back as far as fiscal year 1986. For the DHP as a whole, this has
meant chronic, recurring shortfalls, resulting in the need for
recurring plus-ups from the President's Budget position. The
chronological portrait below demonstrates the problems with chronically
underfunding an ``entitlement'' program.

INCREASES AFTER THE PRESIDENT'S BUDGET
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Between PB During
Fiscal Year Reprogramming or Supplemental Type & Execution Execution
----------------------------------------------------------------------------------------------------------------
1986......................................... Reprogram & Supp....................... $0 $360
1987......................................... Supplemental........................... 0 425
1988......................................... Reprogramming.......................... 0 529
1989......................................... Reprogramming.......................... 0 152
1990......................................... Reprogramming.......................... 0 706
1991......................................... Reprogramming.......................... 0 278
1992......................................... None................................... 0 0
1993......................................... None................................... 0 0
1994......................................... Appropriation Act...................... 290 0
1995......................................... None................................... 0 0
1996......................................... None................................... 0 0
1997......................................... Appropriation Act...................... 475 0
1998......................................... Budget Amendment....................... 274 0
1999......................................... Amend. & Reprog........................ 304 0
2000......................................... Supplemental........................... 0 1,311
----------------------------------------------------------------------------------------------------------------

For the U.S. Army Medical Command, the combination of utilization
management wedges, notional adjustments and overly optimistic A-76
savings has created significant challenges from fiscal year 1996
through the present, and well into the POM years. The fiscal year 2001
cumulative impact of fiscal year 1996-2001 reductions equals $279.5
million.

Because there is currently no source of external dollars for
funding a ``venture capital'' fund, or a ``Surgeon General's Investment
and Initiative Fund'', these dollars would need to be resourced through
an internal reallocation process. In application this would mean that
each of our medical treatment facilities (MTFs) would be taxed a
certain amount from their base operating budgets, in order to find the
dollars to create a venture capital investment and initiative fund.
This would have two potentially negative results. First, not every
facility will share in venture capital dollars, which means that many
facilities will see only negative growth in their operating budgets as
a result of this program. Secondly, and depending on how extensively
this corporate ``venture capital withhold'' tax might be, we could even
see recipients of venture capital investment dollars rechanneling these
dollars into core shortfalls, rather than using them for their intended
use as recapture initiative start-up dollars. In either case,
internally funding of venture capital initiatives, from a system that
is already constrained by inadequate funding levels can only produce
sub-optimal results.
An inadequate level of funding in each fiscal year's budget results
in the medical treatment facilities attempting to sustain the previous
year's level of healthcare services versus seeking to recapture patient
care workload performed in the more expensive private sector. Funding
is not available to hire the additional ancillary support staff
required to optimize the health care providers' capabilities to treat
patients. Funding shortfalls in the Real Property Maintenance Activity
(RPMA) account prevent the renovation of the medical treatment
facilities to accommodate each provider having two exam rooms and the
associated ancillary staff to efficiently provide patient care in
accordance with current standards of practice. Computers are an
integral component to the efficient delivery of quality healthcare
services. The sustainment of the existing operational computers for
designated staff members and the associated local area network (LAN)
infrastructure requirements to support the computers is a challenge for
medical treatment facilities in the present fiscal environment. There
is no funding for the acquisition of computers that support the
technological advances in software, such as Operating Room Management
Applications, necessary to maximize the providers' efficiency.
We believe that the appropriate infusion of venture capital,
external to the MEDCOM's operational budget, would greatly enhance our
internal capabilities and the ability to recapture workload. By
optimizing the military health system we can increase physician
satisfaction, retention, and readiness; reduce the cost associated with
increased reliance on private sector care; and finally to deliver on
our commitment to all DOD beneficiaries.
Question. If such a fund were established, please explain how the
``best business case'' approach would be used to identify, select and
fund projects.
Answer. The Army Medical Command has developed a five-step process
for identifying, selecting and funding ``best business case''
initiatives:
1. The subordinate commands identify ``best business case''
initiatives through a nomination process. These nominated ``best
business case'' initiatives are submitted to the Army Medical Command
in a standardized business case analysis format. Use of the business
case analysis format ensures that the funding requirement, capacity
modeling, demand assessment and qualitative impacts are clearly
articulated.
2. The Army Medical Command collects all of the nominated ``best
business case'' initiatives and has them validated and prioritized by
an interdisciplinary working committee. The criteria used by the
committee to prioritize the initiatives take into account the
initiative's return on investment, the timeliness of the initiative's
ROI, the strategic alignment of the initiative with The Surgeon
General's priorities, the initiative's qualitative return to the
soldiers/patients, the complexity of implementing the initiative, and
the interdependencies of the initiative with other initiatives. The
interdisciplinary working committee is composed of subject matter
experts from resource management, managed care, program and analysis,
health facilities planning, and clinical care. Other subject matter
experts are added to the team as unique initiatives are submitted.
3. Once the initiatives have been validated and prioritized by the
working committee, a Council of Colonels and General Officers then
review the list and adjudicate any discrepancies between the working
committee and the submitting commands. Once approved by the senior
staff, the prioritized list is submitted to The Surgeon General for
final review.
4. The top initiatives will then be developed into business plans
and await funding.
5. When funding becomes available, The Surgeon General will select
the top business plans and approve them for execution.
The Army Medical Command initiated this process in March 2001 and
is currently in the process of validating and prioritizing ``best
business case'' initiatives submitted by the subordinate commands. The
goal is to have an ``approved'' and prioritized list of business case
initiatives by late June 2001.

ORGANIZATIONAL REFORM

Question. Would the creation of a ``Joint Medical Command'' or a
``USMEDCOM'' remedy some of the problems experienced with DOD medical
programs?
Answer. USMEDCOM potentially offers a more coherent command
structure than the current medical organization within DOD. In a Joint
Medical Command concept, one uniformed officer would have operational
control of the Military Health System. This officer would also have
responsibility for the programming, budgeting and execution of the
Defense Health Program. This single point of accountability should
improve budgeting and associated administrative processes.
Question. Is there clear authority and accountability in the DOD
medical programs today? Would a ``USMEDCOM'' foster better lines of
responsibility for DOD medical programs?
Answer. In my view, authority and accountability for DOD medical
programs are in need of improvement. Establishing a USMEDCOM would
offer a clearer command and control structure. This would enhance unity
of effort for the DOD medical mission. I support the continued
assessment of the proposal to establish a USMEDCOM. However, there
should be a close examination of operational, staffing and resource
issues at the detail level before any final decision is rendered.

RECENT TRICARE SATISFACTION SURVEY

Question. Have there been recent improvements in customer
satisfaction with TRICARE? What remains to be done to further improve
satisfaction with the TRICARE program?
Answer. On February 22, 2001, the Center for Naval Analyses/
Institute for Defense Analyses (CNA/IDA) released the results of a
Congressionally mandated evaluation. The CNA/IDA study uses the Annual
Health Care Survey of beneficiaries and demonstrated a trend of
increased satisfaction with TRICARE. Survey results show positive
progress in the areas of customer satisfaction with access and overall
quality of care. The percentage of all TRICARE Prime enrollees who were
satisfied with their access to care was 74 percent, compared to 63
percent prior to TRICARE. In the regions where TRICARE Prime has been
in place for three or more years, satisfaction with access to care
improved from 70 percent prior to TRICARE to 83 percent. This is higher
than recent civilian managed care data, which reported that 79 percent
of beneficiaries were satisfied with access to care.
Satisfaction with overall quality of care increased from 73 percent
prior to TRICARE to 82 percent. Satisfaction with quality of care
improved from 79 percent to 90 percent in regions where TRICARE has
been in place for three or more years.
The Army continues to work to increase beneficiary satisfaction.
The following steps are being taken: enhance MTF health care delivery
in order to improve beneficiary access; standardize appointment types;
develop web-based appointing; increase access in remote areas; and
implement the benefit improvements of the National Defense
Authorization Act of 2001.

MEDICAL RECRUITING AND RETENTION

Question. How is your service doing in recruiting and retaining
medical professionals?
Answer. In the last four years, the United States Army Recruiting
Command has made 94 percent of their medical active duty mission for
officers. This equates to around 1,200 new personnel per year. While
each of the Corps presents its own set of challenges, without a robust
student program we would be in far worst shape. Unfortunately, we have
not received the production that we would like from Cadet Command in
recent years. This organization provided us the majority of our non-
allied science Medical Service Corps officers and Army Nurse Corps
officers. The economy has made it difficult to recruit some specialty-
specific medical officers, dental officers and pharmacy officers. The
total number of officers we must recruit has remained fairly constant
over the last five years. What have altered are the programs necessary
to get that number. Without the increase in student scholarship
programs we would continue to decline. We must now essentially buy our
officer force.
Prior to fiscal year 1992, the average loss rate for the Army
Medical Department was approximately 9 percent of the force each year.
The average for the last four years is 11 percent. This increase in
loss rate is a combination of factors. These factors include OPTEMPO in
shortage skills, lure of larger compensation in the civilian job market
and completion of pre-accessioning incurred obligations.
We ended fiscal year 2000 at 97.7 percent of our strength.
Currently we are projecting to end fiscal year 2001 at approximately
the same percentage.
Question. Is the current special and incentive pay structure
adequate to keep your force manned?
Answer. No, it isn't. Neither optimization nor any other
improvement in health services delivery can be accomplished without
quality healthcare professionals. Recruiting and retaining quality
medical personnel is a major concern of the Army Medical Department
leadership. The civilian health-care industry is an attractive
alternative to our officers. We need funding to support additional
incentives to attract and retain quality health care professionals.
Current special and incentive pay structure are becoming inadequate
to provide sufficient incentive to meet aggregate end strength needs.
Special pay rates (particularly entitlement pays) have remained fixed
(in dollar amount) since 1990, resulting in a climate of devaluation.
Maximum amounts allowed for discretionary pays have remained similarly
fixed, precluding certain specialties which reached the maximum years
ago from the possibility of any further increases. It is perceived that
this devaluation, as well as escalating civilian practice salaries, is
impacting on the Army Medical Department's ability to retain the
optimal aggregate number and specialty mix of qualified clinicians in
the long-term. To that point, the military Surgeons General have
requested the Flag Officer Review Board at the Office of Assistant
Secretary of Defense for Health Affairs to evaluate the current special
pay rate structure, and develop Legislative proposals which will
address rate increases in the fiscal year 2003 Unified Legislative and
Budgeting (ULB) process.
In light of the current situation and projected trends associated
with continuing to hold compensation at current levels, every effort is
being made to effect a change as quickly as possible. In order to do
this, the Army Medical Department wishes to use the Critical Skills
Retention Bonus (CSRB) authorized in the Fiscal Year 2001 National
Defense Authorization Act while the ULB initiatives are pending. The
CSRB would be used as a contractual agreement to pay retention bonuses
for specified amounts in return for obligated service. The amount of
the bonus would depend on the specific specialty, for example--
--Physician CSRB would take the existing pay structure and present a
bonus with a range of $12,000-$28,000/year. Specific medical
specialties would then be targeted based on criticality.
--Dentist CSRB could be used to combine the proposed increases in
entitlement pay and additional special pay (ASP) to result in a
similar variable rate bonus for the critical retention years as
follows: less than 4 years equals $15,000/year; 4 but less than
10 years equals $24,000/year; 10 but less than 13 years equals
$17,000/year; 13 but less than 24 years (maximum YOS for CSRB)
equals $15,000.
--Veterinarian and specific clinicians in the nurse, specialists and
service corps would likewise be identified with a bonus to
supplement the existing pay structure until the proposed
increases are enacted, with a range of $6,000-$12,000/year.
The desired effect is to stop the rapid departure of our health
care providers to the civilian health care sector. But we need the
immediate authority and additional funding to support these
initiatives.
Shortly, the Office of the Secretary of Defense for Health Affairs
will provide a report on a recent study by the Center for Naval
Analyses to the House and Senate Armed Services Committees. I believe
this will quantitatively demonstrate that there is a pay disparity that
we must continue to address in order to attract and retain quality
health care professionals.
Question. Where do you have the most difficulty recruiting and
retaining medical professionals? What specialties are most undermanned?
Answer. Currently our most critical recruitment challenges are
Dental Corps officers and Pharmacy Officers. Even with a robust student
scholarship program, we are over 100 dental officers below our budgeted
end strength. While we are doing well within these student programs,
our ability to attract fully trained dentists is minimal. Likewise, the
starting salaries for trained pharmacists in the civilian marketplace
simply puts us out of the competition without significant incentives.
We are attempting to utilize the Health Professions Loan Repayment
Program to attract more Pharmacy officers, but we have not offered the
program for a sufficient length of time to be able to access its
impact. Our retention in Optometry officers is less than optimal. The
majority of our officers are from the Health Professions Scholarship
program who separates upon completion of their active duty service
obligation. Recruitment of Certified Registered Nurse Anesthetists is
very difficult. Again, if we were not training our own, we would be in
a more difficult state than we are now.
The most critical specialties right now are:
Dental Corps
General Dentists
Comprehensive Dentists
Medical Corps
Anesthesiologists
Diagnostic Radiologists
Psychiatry
Medical Service Corps
Pharmacy Officers
Optometry Officers
Army Nurse Corps
Operating Room Nurses
Certified Registered Nurse Anesthetists

HEALTHCARE NEEDS

Question. I would like to ask the members of panel one to comment
on DOD plans to meet the healthcare needs of military personnel,
dependents and veterans living in rural areas with no local access to
military healthcare facilities.
What is the status of demonstration projects that seek to address
these problems?
Answer.

1. Active Duty Service Members in Remote Areas
TRICARE Prime Remote.--The concept of providing TRICARE Prime in
remote areas was tested in a demonstration program in Region 11 in
1996. TRICARE Prime Remote (TPR) was implemented CONUS-wide on 1
October 1999 and is the program to provide a Prime-like benefit for
active duty service members who live and work greater that 50 miles
from a military treatment facility (MTF). Most recent estimate show
that there are 44,790 eligible active duty service members serving in
remote areas (60 percent of these are Army and Army National Guard).
These soldiers include recruiters, professors of military science at
various universities, active Guard and Reserve members, etc. Over 90
percent of these soldiers are currently enrolled in TPR. Military
oversight of active duty service member medical and dental care is
maintained by the tri-service Military Medical Support Office (MMSO)
located at Great Lakes, Illinois. In areas where TRICARE reimbursement
to non-network providers is a barrier to access for active duty
soldiers, waiver of the CHAMPUS Maximum Allowable Rate (CMAC) rates can
be granted by the Regional Lead Agents.

2. Active Duty Family Members with their Sponsor in Remote Areas
Geographically Separated Unit Program (GSU).--The managed care
support contracts in Regions 1, 2, 5, and 11 contain requirements to
establish and maintain TRICARE Prime networks for dependents of
soldiers eligible for or enrolled in TPR. Like TPR, this program was
established as the result of the demonstration program conducted in
Region 11 in 1966. Unlike TPR, this program is not yet available CONUS-
wide. The TRICARE Prime Remote for Family Members (TPRFM) program will
replace the GSU program and is scheduled to be implemented CONUS-wide
in April, 2002. To provide interim financial relief to eligible remote
family members who are paying TRICARE Standard cost shares and
deductibles (except pharmacy), all cost shares, deductibles and co-
payments are waived from 30 October 2000 until TPRFM begins. Procedures
to implement this one time waiver are to begin in August 2001.

3. Active Duty Family Members not Residing with Their Sponsor in Remote
Areas and Retirees under the Age of 65 in Remote Areas
These beneficiaries must rely on TRICARE Standard or Extra (if
available) to share the costs of medical care. They may use the
National Mail Order Pharmacy, network pharmacies or non-network
pharmacies under the new TRICARE pharmacy benefit. They may utilize the
TRICARE contractor health care finders to locate TRICARE participating
providers in their areas and may use the toll free Health Care
Information Line to obtain health care information.

4. Retirees Over the Age of 65 in Remote Areas
TRICARE Senior Supplement Demonstration (TSSD).--There are two
demonstration sites, encompassing approximately 11,100 eligible
beneficiaries: the Santa Clara County area of California, and the
Cherokee County area in Texas. To date, out of the 368 beneficiaries
enrolled, 266 (74 are Army) are enrolled at the Texas site and 102 (32
are Army) at the California site. California enrollment is so low
because many of the beneficiaries have a BRAC pharmacy benefit.
Congress mandated the TSSD under Section 722 of the Fiscal Year 1999
National Defense Authorization Act.
TSSD facilitates DOD payments on behalf of Military Health System
(MHS) beneficiaries receiving Medicare benefits while enrolled in the
TRICARE Program as a supplement to Medicare. An eligible beneficiary is
described as a member or former member of the Uniformed Services, a
dependent of a member of the Uniformed Services, or a dependent of a
member of the Uniformed Services who died while on active duty for a
period of more than 20 days. Those eligible must meet the following
requirements: (1) 65 years of age or older; (2) entitled to hospital
insurance benefits under Medicare Part A; (3) enrolled in the
supplemental medical insurance program under Medicare Part B; and (4)
reside in a demonstration program area.
Each eligible beneficiary who enrolls in the TRICARE Program under
the TSSD Program is required to pay an enrollment fee. Payment of the
enrollment fee can be made annually or quarterly. The enrollment fee
has been established at $576 per person per year. The Medicare Part B
Premium is $50.00 per month. Enrollees in the TSSD may not receive
health care in military hospitals or clinics, including pharmacy
services, while they are enrolled in TSSD.
TRICARE is the primary payer for pharmaceutical benefits, and
beneficiaries pay Standard CHAMPUS Non-Active Duty Dependents (NADD)
cost-sharing premiums. Beneficiaries also have access to the National
Mail Order Pharmacy (NMOP). The demonstration is currently scheduled to
end December 31, 2002.
Federal Employees Health Benefit Project (FEHBP-65).--In 10
randomly selected sites of the United States including the vicinity of
Coffee County, Georgia, and extensive parts of southern Georgia, the
Federal Employees Health Benefit Project (FEHBP-65) is being offered to
many Medicare-eligible Uniformed Services retirees and their family
members. An important feature of the project includes coverage that can
be extended to family members who are not Medicare-eligible. The
project is also open to certain other individuals who are not eligible
for Medicare, such as surviving dependents and certain unmarried former
spouses. The demonstration extends the same health care benefits as the
federal government's health benefits program for its career civilian
employees. In order to participate, otherwise-eligible persons must
live within the ZIP codes that encompass one of the demonstration
sites.
The FEHBP-65 demonstration is a three-year trial congressionally
mandated and jointly sponsored by the Department of Defense (DOD) and
the Office of Personnel Management. It started in January 1, 2000, and
is currently scheduled to end December 31, 2002.
DOD makes eligibility determinations through the Defense Enrollment
Eligibility Reporting System (DEERS), at the time of enrollment. The
project has not proven to be popular with military retirees. As many as
129,112 uniformed services retirees and family members were eligible to
participate but only about 7,751 lives are covered and represent 5.85
percent of those eligible. The total enrollment is 5,734 (representing
7,751 lives). The Army's enrollment tally is about 2,999 or 52.30
percent of the total enrollment (5,734). A site by site comparison
showed low enrollment in those project sites near military treatment
facilities with strong pharmacy services. At the end of the project,
the Department of Defense will submit two evaluation reports along with
their recommendations. One will be submitted to Congress and the other
one to the Government Accounting Office (GAO). In collaboration GAO,
the Office of Personnel Management (OPM) and DOD designed the survey
instrument to satisfy the congressional requirement for an evaluation
of FEHBP-65. Currently, the survey results are pending and there is no
official data available, as yet.
Pharmacy Redesign Pilot Program.--The DOD implemented a Pharmacy
Redesign Pilot Program on July 1, 2000 for DOD beneficiaries over the
age of 65 at two sites selected randomly. The pilot locations are
Fleming County, Kentucky (including selected areas of Kentucky, Ohio
and West Virginia), and Okeechobee County, Florida. The benefit for the
eligible beneficiaries is equivalent to the TRICARE Extra pharmacy
benefit with an enrollment fee of $200, which can either be paid in a
one-time lump sum of $200 or can be paid in two $100 installments every
six months, plus the applicable co-payments. The co-payments are 20
percent for up to a 30-day supply of medication from a TRICARE Retail
Network Pharmacy or $8 for up to a 90-day supply of medication from the
National Mail Order Pharmacy. There were only approximately 600 who
signed up for this program. The project closes on 1 April 2001, when
the TRICARE Senior Pharmacy Program is implemented nationwide. Those
who signed up for the program above will have their annual enrollment
fee refunded based on a ``prorated'' basis.
New Senior TRICARE Pharmacy Benefit.--Effective 1 April 2001, all
beneficiaries over the age of 65 become eligible for the same pharmacy
benefits as other military beneficiaries. After April 2001,
beneficiaries who become eligible for Medicare Part B must have it to
be eligible for this benefit. This includes the National Mail Order
Pharmacy, TRICARE network pharmacy--or if necessary--non-network
pharmacies.
TRICARE as Second Payer to Medicare.--On 1 October 2001, for
military beneficiaries over the age of 65 who have Medicare Part B,
TRICARE becomes second payer to Medicare. This is expected to
significantly lower or eliminate the out of pocket costs for medical
care for older retirees in remote areas.
The Army Medical Department in collaboration with the Air Force and
the Navy has implemented numerous best business practice improvements
to the DOD Pharmacy benefit. These include the simplification and
standardization of the pharmacy co-pays to a tiered co-pay structure
which parallel the ``industry trend'' with civilian pharmacy benefit
management companies. The co-pays have been realigned and will be based
on drug formulary status regardless of the pharmacy point of service
the beneficiary utilizes. The co-pays will be $3 for Generic drugs and
$9 for Brand name formulary drugs. There will continue to be no co-pay
for prescriptions filled at medical treatment facility (MTF)
pharmacies. Additionally, to ensure patient safety remains a primary
focus as pertains to drug therapy, the Pharmacy Data Transaction
Service (PDTS) is currently being implemented nationwide which will
integrate the MTF Pharmacy patient medication profile with the National
Mail Order Pharmacy (NMOP) and the retail pharmacy network. This system
will screen for duplicate drug therapies as well as significant drug-
drug interactions and will provide instant messaging back to the
provider or pharmacist for appropriate interventions. Joint
Pharmaceuticals contracting initiatives continue with our VA partners
for the major high cost drug classes where clinically appropriate and
economically feasible. In fiscal year 2000 these joint contracting
initiatives resulted in over $64 million in cost avoidance for the
major drug classes. Lastly, aggressive efforts continue in implementing
a Uniform Formulary and expanding the DOD Basic Core Formulary which
will ensure more uniform availability of drugs to meet a majority of
our patients primary care needs.
______

Questions Submitted by Senator Kay Bailey Hutchison

TRICARE BUSINESS PRACTICES

TRICARE FOR LIFE

TFL Marketing Steps: (Office of the Lead Agent (OLA) and MTF level
actions)
1. MTFs provided complete info package as information is known
--Preliminary sources on TMA website as guide
--OLA teleconferences (monthly and as necessary)
--OLA sponsored Regional Beneficiary Counseling and Assistance
Coordinator (BCAC) training conference
2. Contractor line informed and modified
--Contingent on contract modification approvals
3. Website modifications (use links into TMA whenever possible)
4. MCSC briefing schedule (contingent on contract modifications)
--Supplement with briefs from MTF in catchment areas
--Supplement with OLA briefs in non-catchment areas
5. Articles for Installation newspapers
--Using only official releases due to gaps in program
--As program details finalized new articles to be made available
6. Send press release to all Congressional offices in Region 1
--OLA action when contract modifications are approved
7. Visit with all Congressional offices
--OLA action--education of congressional admin staffers (field
offices)
8. News release to retirement organizations and commercial news
--TMA, SG or OLA levels
9. Meetings with retiree organizations
--OLA for non-catchment and state levels
--MTF coordination in catchment areas
--MCSC (contingent on contract mod approvals)
10. Direct mailing to over-65
--TMA or SG level (not cost effective at MTF level)
11. Publication of new brochure
--TMA level
--Not cost effective at local levels
--Reduces chance of misinformation or error
12. MCSC education of network providers
--Contingent on contract modifications

Question. Can you comment on how the implementation of TRICARE For
Life will impact your resources? (Physician contacts per year average
12 per year in those over 65 as compared to 4.6 per year in ages 15-
44). (Days of Hospital Care per year average 269 days of care per one
thousand persons in those over 65 as compared to 54.6 per one thousand
persons in ages 15-44).
Answer. This group of patients will stress our capacity to handle
primary care patients with the primary care managers we now have within
our system. To answer your question about the need to account for the
increased utilization of older patients, I can tell you that the
standard panel size for each PCM in our model has been adjusted to
allow for just the increased workload. Our models for specialty care
will also account for the added workload. These older patients will be
welcomed not just because they are members of the Army family, but also
because they bring serious medical and surgical problems to our medical
providers that will maintain and even improve their medical readiness.
The bottom line is that we can handle a portion of the eligible
population under the Tricare For Life program as we fully optimize our
existing facilities.
TFL is a step in the right direction towards keeping faith with our
most senior retirees. However, to meet this increase in workload will
require an increase in resources and a renewed vigilance to ensure
maximum efficiency of our health care resources. Where we can leverage
the existing infrastructure of the direct care system by covering the
marginal costs of caring for the older retirees who have higher average
expenses. We will save the taxpayer's dollar and protect an ever
dwindling Medicare trust fund. The key is an infusion of dollars that
will allow us to fully utilize our MTF's capacity. We are continuing
work on a model that will allow marginal expansion of our MTFs to bring
a greater number of retirees back to the MTF.
Question. Gentlemen, will you be able to meet the goals of TRICARE
For Life and still be able to provide care to the active force based on
your projected budgetary guidelines?
Answer. Our primary mission is threefold: project and sustain a
healthy and medically protected force; deploy a trained and equipped
medical force that supports deployed Army forces; and manage the care
of the soldier and the military family. As currently structured, there
are no additional funds for TFL within the Direct Care System. There
are budget projections that will allow TRICARE to act as second payer
to Medicare in the civilian sector. We support expanding our limited
Space Available capacity and formalizing a relationship with more
retirees that allows them to receive care in the MTF within the
clinical capability of that MTF. This would require funds earmarked for
the marginal costs of taking care of additional beneficiaries.

MEDICAL PERSONNEL

Question. Are you able to recruit the professionals you need to
meet medical personnel requirements (Active and Reserve Components)?
(All three services identify recruiting and retention of nurses as an
important shortfall).
Answer. No, we have not been able to recruit the number of health
care professionals we need to meet the medical personnel requirements.
In the last four years, the United States Army Recruiting Command has
made 94 percent of their active duty mission. This equates to around
1,200 new personnel per year. While each of the Corps presents its own
set of challenges, without a robust student program we would be in far
worst shape. Unfortunately, we have not received the production that we
would like from Cadet Command in recent years. This organization
provided us the majority of our non-allied science Medical Service
Corps officers and Army Nurse Corps officers. The economics of the
country have made it extremely difficult to recruit specialty-specific
medical officers, dental officers and pharmacy officers. We now must
utilize larger student programs to obtain the same number of
individuals. I believe that this is an important point. The total
number of officers we must recruit each year has remained fairly
constant over the last five years. We have altered the programs
necessary to get that number. Without the increase in student
scholarship programs we would continue to decline. We must now
essentially buy our officer force.
Specifically, nurses are not at our budgeted end strength. With the
nursing shortage, we have seen a decline in the Reserve Officers'
Training Corps (ROTC) scholarship requests; thus our ROTC accession
numbers have decreased significantly. Recruiting Command has made up
for some of this shortfall. Having to recruit a greater number of
working nurses means we must compete with civilian institutions for the
same critical specialties at a time when they are offering streamlined
hiring practices and significant recruitment and retention bonuses. As
in the civilian sector, we have critical shortages in the critical
care, nurse anesthesia and perioperative specialties. Currently we are
experiencing low fill rates in the majority of our specialty
development courses. Although we are engaged in an aggressive marketing
campaign to increase our seat fill, if these current fill rates
continue we will have a severe shortage of these clinical specialties
in the out years.
For COMPO 2 requirements there are shortfalls in the nurse
anesthetist and perioperative nurse populations.
Question. Are medical professionals able to sustain their clinical
skills at a high level? (We have funded the Joint Trauma Training
Center at Ben Taub which is a Triservice program).
Answer. The principal means whereby Army Medical Department (AMEDD)
healthcare providers sustain their clinical skills is through the
delivery of healthcare to active duty soldiers, dependents, and retired
personnel in our Military Treatment Facilities (MTFs). In particular,
the care of trauma patients provides a valuable training environment
that more closely duplicates the rigors of combat casualty care. To
ascertain if our healthcare providers are caring for trauma patients,
we analyzed AMEDD Standard Inpatient Data Records (SIDRs) for fiscal
year 1995-99 from Army Community Hospitals (ACHs) and Army Medical
Centers (AMCs). During fiscal year 1995-99, there were a total of
41,815 trauma admissions; 22,273 (53.3 percent) trauma admissions to
AMCs and 19,542 (46.7 percent) trauma admissions to ACHs. Over the
period of analysis, the number of MTFs decreased by 26.3 percent (38 to
28), and the annual number of trauma admissions decreased by 51.9
percent (11,698 to 5,622). The decrease in annual trauma admissions was
most pronounced in ACHs (64.1 percent) compared to AMCs (38.7 percent).
While standards for continuing competence in all disciplines of
medicine are under development, these data suggest significant erosion
of trauma readiness training in our MTFs, especially our ACHs. The
AMEDD is not unaware of these statistics and the implications for
medical readiness.
In our AMCs, directors of graduate medical education programs
routinely supplement training our residents receive with rotations at
American College of Surgeons (ACS)-verified Level I trauma centers.
These rotations ensure our training programs meet certification
requirements, and our residents graduate with the requisite clinical
skills. To enhance sustainment of clinical skills among healthcare
providers assigned to deployable medical units, the AMEDD is an ardent
supporter of the Joint Trauma Training Center (JTTC) at Ben Taub
Hospital in Houston, TX. Our Forward Surgical Teams (FSTs) receive a
one-month training rotation at Ben Taub Hospital every two years. The
JTTC program has had clear, demonstrable results in enhancing
individual and team trauma care skills and improving the medical
readiness status of FSTs. Currently, we are exploring ways to expand
trauma care delivered by one or more of our AMCs and integrate ACH
healthcare providers and deployable units in these AMC trauma care
programs. Based on the success of trauma simulators at the JTTC, we are
also considering expanded use of advanced trauma simulations to augment
trauma training. We anticipate these analyses will be complete the end
of fiscal year 2001.
Question. Does the current medical structure meet military
readiness and force projection requirements?
Answer. The current medical structure is a legacy force that was
designed to support the ``Cold War'' scenario. It is a large, heavy,
somewhat cumbersome force that cannot offer the Combatant Commanders
the flexibility or versatility required of a modern military medical
force. The medical force structure is currently undergoing a Force
Design Update under the Medical Reengineering Initiative (MRI). This
redesign will provide the Army with the medical structure to support
the Interim Force and pathway to the Army Objective Force. MRI
emphasizes deployability, modularity and split-based operational
capability. MRI provides a flexible medical force enabling split-based
operations and employs reach-back technologies. Due to Army resource
constraints, the current medical structure is supporting a mixed force,
part legacy structure and part MRI reengineered. Presently, the Army
can only convert 42 percent of its medical operational structure to the
MRI medical force by the end of fiscal year 2006. Although this ``mixed
force'' does support the Army transformation priorities, its
sustainment poses operational support difficulties for personnel,
training and equipping. Warfighting is complex--providing Combat Health
Support (CHS) is equally complex. A MRI medical force would provide a
well-balanced fully interoperable CHS capability that can gain medical
dominance at every point in the spectrum of operations. Conversion of
the entire medical force structure would provide full spectrum CHS to
the Army as an integral part of the joint force that can rapidly deploy
with sufficient capability to meet the most demanding missions.
Question. What have been the military medical requirements for the
Balkans, Southwest Asia, and other deployments? What is the impact?
Answer. Total AMEDD deployed in support of the following missions:
JTF-B SOUTHCOM: 56 AMEDD personnel; MEDRETE (SOUTHCOM monthly aver) 35
AMEDD personnel; Desert Spring (CJTF-Kuwait) 128 AMEDD personnel; OSW-
Saudi Arabia (MEDEVAC Crew) 15 AMEDD personnel; MFO Sinai 25 AMEDD
personnel; ARCENT Area Support 22 AMEDD personnel (monthly aver);
Bright Star Exercise 250 AMEDD personnel; Operation Joint Forge-SFOR
351 AMEDD personnel; Operation Joint Guardian-KFOR 198 AMEDD personnel;
RSOI FE UFL Exercise to PACOM 120 AMEDD personnel; Cobra Gold Exercise
to Thailand 150 AMEDD personnel; and GME backfill to Korea 18 AMEDD
personnel (for aver 120 days).
The analysis covers only USA MEDCOM overseas deployments for fiscal
year 2000 and fiscal year 2001, as of 2 April 2001.
Combined for fiscal year 2000 and the first six months of fiscal
year 2001 U.S. Army MEDCOM has deployed 956 military personnel totaling
68,592 mandays in overseas supported activities.
The following is a summary break out of the support provided:
CENTCOM--60 personnel totaling 6,439 mandays.
EUCOM--397 personnel totaling 41,914 mandays.
PACOM--388 personnel totaling 7,463 mandays.
SOUTHCOM--111 personnel totaling 12,776 mandays.
Total officers soldiers deployed equal 523 personnel totaling
44,227 mandays.
(Note: the above officer bullet includes MC/DC totals) Analysis of
the total officers deployed reflects U.S. Army MEDCOM provided 290
Medical Corps and Dental Corps Officers totaling 23,244 mandays.
Total enlisted soldiers deployed equal 333 personnel totaling
24,365 mandays.
Operational impact in regards to FTE (full time equivalent) yield
the following summary:
Total FTE cost (Officer and Enlisted), $30.57 million.
MC/DC FTE cost, $16.9 million.
All other Officer FTE cost, $8.4 million.
Enlisted FTE cost, $5.27 million.
Formula: (Mandays/220)(per FTE cost)=FTE total.
1 military FTE = 220 days in a year.
FTE cost per enlisted, $47,600.
FTE cost per officer (minus MC/DC), $87,600.
FTE cost per MC/DC, $160,000.
Question. How does the third party collection system currently work
within the Military Medical Treatment Facilities?
Answer. The Third Party Collection Program (TPCP) at the MTFs is
responsible for billing the health insurance of eligible beneficiaries
to recover the costs of health care services provided. The MTF uses
these collections to enhance health care to our patients through the
purchases of supplies and services that may not otherwise be available
within the hospital's budget.
At this time, the TPCP utilizes the diagnosis-related group (DRG)
billing methodology for inpatient services and an all-inclusive charge
for outpatient services. Each outpatient clinic, with an assigned MEPRS
code, has their own clinic rate charge. The all-inclusive charge covers
the cost of the clinic visit itself, the professional fee of the
clinician, and any and all ancillary services that may (or may not) be
provided within the visit itself.
The billing methodology will change from an all-inclusive to an
itemized billing rate effective 1 October 2001. Instead of sending one
bill for the health care services rendered, the clinic charge (hospital
or facility service fees), professional fee of the clinician and any
and all ancillary charges (radiology, pathology and pharmacy) will
generate a separate bill based on the CPT code of the service provided
and priced using an adjusted (for region) CMAC rate.

THIRD PARTY COLLECTIONS

Question. What is the impact on Medical Treatment Facilities of
providing the medical services and collecting for those services (for
example at Wilford Hall and Brook Army Medical Center in San Antonio)?
Is the money returned to the Medical Treatment Facilities that provided
the services?
Answer. Under a memorandum of understanding between Bexar County
Hospital District (dba University Health System (UHS)), Brooke Army
Medical Center (BAMC) and the Air Force's Wilford Hall Medical Center
(WHMC), a trauma network was established to facilitate the appropriate
acceptance and transfer of Code III trauma victims for Bexar County and
non-Bexar County patients.
In consideration of the military medical treatment facilities (MTF)
support, UHS will pay to the MTFs a total sum of $3 million annually.
The annual sum is paid in four equal installments of $750,000,
alternating the quarterly payments between BAMC and WHMC. While WHMC
receives this money directly, BAMC does not. These funds are received
by the Army Medical Command (MEDCOM) who reimburses BAMC based on per
episode of care provided to non-beneficiaries, civilian emergency
patients when other collection efforts are exhausted.
The cost of civilian trauma patients to BAMC is $13.1 million
annually. Approximately $3 million is reimbursed through insurance
collections, $7.3 million is received from MEDCOM under this agreement
and debt management processing, leaving a shortfall to the MTF of $2.8
million.
______

Questions Submitted by Senator Ernest F. Hollings

BLOOD-RELATED DISEASE RESEARCH

Question. Under Congressionally Directed Medical Programs, is there
on-going research targeted on blood-related diseases such as leukemia
or lymphoma? Is blood-related disease research to be consistent with
the mission of DOD medical research?
Answer. The Navy has, for several years, received congressionally
directed increases in RDT&E funds to support the National Bone Marrow
Program, which provides a bone marrow registry and supporting research
on methods for tissue typing and matching. The National Bone Marrow
Program directly supports the treatment of leukemia, as well as other
diseases, through the matching of prospective bone marrow recipients
with suitable donors. Funding for the program was $34 million in fiscal
year 2001. There is no on-going research within the Air Force or Army's
Congressionally Directed Medical Research Programs that is targeted on
blood related diseases, to include leukemia or lymphoma.
The answer depends in part on how broadly the phrase ``blood-
related disease'' is to be interpreted. Blood diseases, as they are
generally defined, are not a consequence of most military activities or
threats. The major exception is radiation exposure, which can severely
depress bone marrow function with profound hematological and immune
system effects, and can induce cancers in cellular elements of the
blood system. Radiological effects are considered by the Armed Forces
Radiobiology Research Institute (AFRRI). Aside from this impact, blood
diseases are not considered within the mission of DOD medical research.
This fact notwithstanding, there may be military applications of
knowledge gained through blood disease research. The military
applications of such knowledge are for the most part peripheral to the
diseases themselves and do not benefit victims of these diseases.
Certain research projects on blood-related diseases may be consistent
with the DOD medical research mission if the anticipated findings can
be clearly demonstrated to have direct relevance and applicability to a
militarily unique need. All such projects need to be considered on a
case by case basis.
The principal area of potential application is in combat casualty
care. Hemorrhage resulting from trauma is the primary cause of
battlefield deaths, and the DOD medical research mission is accordingly
concerned with the development of hemorrhage countermeasures, to
include the application of clotting enhancers that were originally
identified through studies of clotting disorders. Clotting disorders
are also occasionally associated with trauma-induced hemorrhagic shock,
reperfusion, and hypothermia; such disorders represent secondary
complications of trauma that are much less important than hemorrhage as
a cause of battle-related morbidity and mortality, but are nonetheless
consistent with the mission of DOD medical research. In addition,
studies on platelet function may be consistent with the DOD mission if
they can be related to the development of improved (field-expedient)
means for platelet preservation and storage. More broadly, the DOD is
interested in substances that can improve oxygen flow to organs under
hemorrhagic conditions where blood flow is reduced. To the extent that
studies of anemic conditions or therapies for these conditions can be
related to the development of pharmacological or other countermeasures
that could be employed in a field trauma management setting, they may
be consistent with the DOD medical research mission.
If one considers blood-related disease more broadly, there are a
number of infectious disease pathogens of military importance that are
blood-borne and cause symptoms directly through their effect on blood
cells or blood vessels. Examples include malaria, HIV, and a number of
viruses that can cause hemorrhagic fevers. However, such diseases are
not typically considered to be blood diseases, per se. Within the DOD
medical research mission, they are instead addressed through strategies
targeted at the infecting organisms. Because the primary focus of this
component of DOD mission research is on prevention of disease,
symptomatic treatments targeted at a particular organ system such as
blood are not of military relevance. Research on the pathogenic effects
of these organisms on blood components are only studied insofar as is
necessary to understand the life cycle of the organism, identify
appropriate targets for intervention (i.e., through vaccines or drugs),
and identify and understand correlates of protection that are essential
to the evaluation of product efficacy.
Question. Has any work been done to identify the occurrence rate or
prevalence of blood-related diseases resulting from environmental
exposure in the theater of war?
Answer. The Army Medical Department, through the Army Medical
Surveillance Activity at the U.S. Army Center for Health Promotion and
Preventive Medicine, tracks the incidence and prevalence of all serious
diseases and injuries that affect soldiers, sailors, airmen, and
Marines, deployed and non-deployed. Several studies focused on the
health of troops deployed to Bosnia have been completed. Although these
studies were not specifically designed to examine blood-related
diseases, results did not indicate any increased risk of these diseases
in military personnel deployed to Bosnia.

HEALTH OF AMERICAN TROOPS

Question. The National Academy of Sciences and the Institute of
Medicine issued a report in January which made recommendations to the
Department of Defense about improving the health of soldiers deployed
to the theater of war. The Institute's recommendations are compelling
and, if implemented, would make a strong commitment to the health of
American troops. Are you familiar with the Committee's recommendations?
Do any of the individual services, or the Department of Defense, have
implementation plans for the any of the Committee's recommendations? If
not, why not?
Answer. The IOM report included 32 recommendations grouped under
six strategies for action by DOD. Army actions, some in conjunction
with the other Services and the Office of the Assistant Secretary of
Defense (Health Affairs), have acknowledged the themes included in many
of these recommendations and strategies. Below are two current Army
activities that directly address these strategies and recommendations.
First, under the leadership of the Deputy Assistant Secretary of
the Army for Environment, Safety, and Occupational Health, the Army is
finalizing policy to implement requirements of DOD Instruction 6490.2
and other relevant DOD force health protection policies. The Army
policy will outline roles and responsibilities for Army organizations
to provide effective, continuous medical surveillance of Army
personnel, improve information-sharing concerning medical threats and
countermeasures, and reduce short- and long-term health risks to Army
personnel through the operational risk management process. This effort
reflects several IOM recommendations, including recommendation 2.2
``DOD should integrate expertise in the nuclear, biological, chemical,
and environmental sciences for efficient environmental monitoring of
chemical warfare agents and toxic industrial chemicals for both short-
and long-term risks''. This policy will be stated in a numbered
Department of Army policy letter to be released in May 2001. Plans for
implementation of this policy are due within 120 days of publication of
the letter. We expect that the implementation plans will highlight
those areas in which the Army will achieve measurable progress in
addressing the recommendations in the IOM report.
Second, we are developing an Army Health Strategic Plan which
includes three goals for Army health: Project and sustain a healthy and
medically protected force; Deploy a trained and equipped medical force
in support of the Army transformation; Manage and promote the health of
the soldier and the military family. Several long term objectives and
strategies of this plan address the strategies and recommendations of
the IOM committee. For example, the long-term objectives under the
first goal address:
--Optimizing the individual fitness and health of soldiers pertaining
to pre-deployment readiness,
--Maintaining the health of soldiers while deployed,
--Developing more robust hazard and health surveillance capabilities,
--Developing knowledge and materiel solutions to deployment health
problems.
This strategic plan provides the basis for the Army Medical
Department Balanced Scorecard through which specific initiatives to
reach these goals will be developed and tracked. The Balanced Scorecard
is designed to provide the appropriate focus so that concrete progress
toward the goals may be measured. The Scorecard is targeted for release
in 3QTR fiscal year 2001.
______

Questions Submitted by Senator Robert C. Byrd

OUTCOMES MANAGEMENT PROJECT

Question. Last year, at my request, and with the concurrence of
Chairman Stevens, the Committee on Appropriations added $10 million for
the Walter Reed Army Medical Center to conduct an Outcomes Management
demonstration project for targeted disease. I am advised that, not only
has this project been successful at Walter Reed, but that the work here
should serve as the model for the Military Health System to evaluate
Clinical Outcomes and accountability of the system to beneficiary
needs. Would you care to elaborate on that?
Answer. Medical Outcomes Metrics are the measures by which ours,
and every other medical system, should be evaluated and ultimately
funded. Due to advances in both information technology and medical
science, we now have the ability to collect and process data that
reflects our system's performance based on how much better our patients
feel or how well they are progressing through their illness or injury.
What is happening at WRAMC is unique in that the software that has been
developed is owned by the government, and was developed to work with
the CHCS software package. Perhaps what makes this program most unique
is the dedication and hard work of those developing it. Through the
visionary leadership and support of the Hospital Commander, few
programs can claim greater success given the rapid development and
fielding of this effort. I feel the outcomes management Program at
WRAMC can serve as a cost and time efficient example of how to build
the next generation of patient management software and serve as the
standard bearer of the future. This program will take us into an era of
accountability not only for how well we practice the healing
disciplines, but also for how well we serve our patients.
Question. It is clear to me that this work is important not only to
the Military Health System, but as well to the Nation. Does your vision
include plans to expand the scope of this effort to include other
Federal agencies, Civilian Academic Institutions, or State Health
Organizations?
Answer. The WRHCS Outcomes Management Program has demonstrated
preliminary (the program is just being initiated) outcomes improvement
in a number of chronic conditions--Diabetes, Congestive Heart Failure,
Chronic Obstructive Pulmonary Disease, Pediatric Asthma, Breast Cancer,
Hepatitis C and Stroke--and in a number of prevention measures. The
Program is linked to MEDCOM's DOD/VA Clinical Practice Guidelines. I
believe that this high quality, evidence-based program can be applied
to any healthcare organization. We will make our results and protocols
available to any health care organization that is interested prior to
actual publication of results.
Currently we are in discussions with the Department of Veterans
Affairs to determine how we can share our software packages and to work
with DVA experts in defining and evaluating our efforts. The greatest
benefit of this effort will be within the DOD and DVA health care
systems, due to the similarity of patient management systems. We are
also working to identify partners who are interested in rural and other
underserved populations that can assist us in determining how to best
disseminate the results of our work to maximize the quality of care for
these populations by empowering the physicians who care for them. I do
intend to aggressively seek other opportunities within state and local
health systems, particularly those who primarily serve poor and
underserved populations.
Question. I understand that in order to sustain the impact and
momentum of the progress made so far in the improved Provision of Care
for the Walter Reed Health Care System, and to assure that the progress
made so far is not lost, an additional $16 million will be necessary
for fiscal year 2002. Would you outline how these funds will be
invested?
Answer. Monies provided to this program in fiscal year 2001 were
used in the rapid definition and deployment of this program. In fiscal
year 2002 we anticipate utilizing these additional funds to
significantly expand the number of patients participating in the
program, and to increase the number of disease states included in the
program. In addition, we anticipate fiscal year 2002 monies to be used
to develop an exportable program package, which we will begin to deploy
in fiscal year 2003. Fiscal year 2002 funding includes monies to
support travel to other medical facilities to train healthcare
providers via a ``train-the-trainer'' philosophy which has been shown
to be the fastest way to indoctrinate the existing culture with a new
sense of accountability and expectations. Though we have accomplished
much this fiscal year, funding for fiscal year 2002 is crucial for the
success of this program and to realize the dividends on investments
made this fiscal year.
Question. Given the importance of this effort and the skill and
proven success of the Walter Reed Management team, how can you insure
that the Outcomes Management Program is fully funded in the future to
insure that the benefits realized by our investment are not lost?
Answer. There are two things I intend to do in order to insure this
important work is not lost. First, my staff is working to incorporate
the fiscal needs of the program into the fiscal year 2003 budget
request. I expect the program to be fully funded within the 5-year
budget plan. Secondly, I have directed that Walter Reed will develop an
exportable program that each Army regional command Tricare region can
implement. I have directed the Program Office to begin deployment of
the initial software/program support modules beginning second quarter
fiscal year 2003. As previously stated, I believe the medical outcomes
management program presents us with the opportunity to actually gauge
our ability to serve patients and too justify our continued level of
service. As such I will insure that, as rapidly as possible, the
program will be funded under the POM and that the knowledge and
expertise we have gained is replicated throughout the Army Medical
Department.
______

Questions Submitted by Senator Patrick J. Leahy

HOSPITAL SYSTEM

Question. As the Army develops lighter, more deployable units and
equipment, is the Army developing an equally mobile hospital system to
deploy with this force. I understand the service's current hospital
system is aging, obsolete, and bulky. I also worry that the Army's
current forward-deployable medical hospital does not offer protection
from nuclear, chemical, and biological weapons. I would appreciate your
telling us about what steps the Army is taking to upgrade this
essential capable to meet the needs of the Army's broader
transformation. Specifically, what plans has the Army developed to
modernize the mobile hospital systems? What funds has the service
dedicated to carry out that plan in the fiscal year 2002 budget? Can
you additionally please provide any relevant data on this effort to the
Subcommittee?
Answer. The Army Medical Department's (AMEDD) has worked to ensure
that the medical capabilities possess responsiveness, mobility,
survivability, agility, and versatility in support of the CSA's
Transformation to the Objective Force. Since 1998, the Directorate of
Combat and Doctrine Development (DCDD) of the AMEDD Center and School
(AMEDD C&S) has been involved in identifying operational requirements
for a future medical shelter system (FMSS) which could plausibly
replace the current hospital system. The operational requirements
address strategic deployability, tactical mobility, integrated support
systems (environmental control, power, water distribution, medical
gases), NBC protection as well as state-of-the-art medical capabilities
and integrated telecommunications/digitization. Phase 1 of this effort
resulted in a virtual reality design of a mobile surgical unit, and
Phase 2 will provide actual engineering schematics. Advances in
technology, composite materiels, as well as other advancements have
indeed made the Deployable Medical System or DEPMEDS ``dated'', in need
of a major overhaul, and it will reach the end of its life cycle before
the end of this decade. We must capitalize upon emerging and future
technologies that will provide a system that is a ``quantum leap
ahead'' of any system that is known today, and then identify the
funding to resource that system.
The AMEDD is working with the Transportation Corps to define
medical requirements that promote tactical mobility for the Family of
Medium Tactical Vehicles Load Handling System (FMTV/LHS). The AMEDD
transformation strategy demands a Combat Health Support (CHS) system
that is rapidly deployable, yet fully supportive of the deployed force.
The FMTV-LHS will require one trained soldier approximately six minutes
to attach and emplace/displace a shelter. The PM-MTV has committed
funding to initiate design and development of the FMTV-LHS prototype by
Stewart & Stevenson and Cargo Tec.
In September 1998, DCDD AMEDD C&S in conjunction with Medical
Research and Materiel Command (MRMC), U.S. Army Tank and Automotive
Command (TACOM) and Mobile Medical International Corporation (MMIC)
were involved in a collaborative team effort to define requirements for
the development of a mobile surgical unit. For the FST capabilities,
the concept envisioned a 2-container system that could be deployed in
two C-130 sorties and transported on one FMTV/LHS and one Medium
Tactical Vehicle--Load Handling System (MTV/LHS) trailer. The FMTV-LHS
consists of a truck with a pneumatic load-handling system that will be
used to load, unload, and transport current and future deployable
medical systems. The maximum weight of the container with equipment
shall not exceed 8.8 STons. Each container will be equipped with
environmental control, self-internal power, telecommunication, and NBC
protection. This concept evolved into a family of systems, which MMIC
termed the 21st Century Mobile Hospital System (21CMHS). The concept
and resulting virtual reality design, based upon combat developer user
requirements, was evaluated as having merit as a future shelter system
for the FST and as a possible follow-on to DEPMEDS. It was recommended
that funding options be explored. Phase 2 of this initiative involves a
continuation and refinement of system requirements. An AMEDD C&S led
Integrated Concepts Team comprised of DCDD, MRMC, Oak Ridge National
Labs (ORNL), OCAR, and USAF personnel have partnered with the National
Automotive Center (NAC) to refine the operational requirements and
concepts for the FMSS. The FMSS is the AMEDD's modernization effort for
the next generation of medical shelter systems. This effort is looking
at developing a family of rigid and soft-sided containers that will
facilitate strategic and tactical mobility consistent with Army
Transformation while providing an appropriate environment and state-of-
the-art medical facilities for surgery, intensive care, and other
hospital support services. These shelters will incorporate autonomous
power generation and environmental control and be wired for
digitization and communications. They will be capable of operating in
chemical and biological threat environments. Their multi-functional
design will allow for quick reconfiguration for multiple medical
applications.
ORNL possesses technologies, capabilities, and some of the projects
that support an initiative to include a new type of a Tactical Quiet
Generator (QTG) that is lighter, quieter than the existing QTG and has
25 percent better fuel consumption that could be integrated into the
shelter system for emergency power. ORNL added that they could develop
a shelter that will be the same height as the MTV cab and will expand
upward. The employment of the FMSS in the theater of operation was
discussed to include strategic deployability and tactical mobility and
strategic mobility requirements. In addition, the Forward Surgical Team
(FST) must be capable of deploying as far forward as the Battalion area
given the capability of the MTV-LHS. Congress provided $8 million for
procurement of the Advanced Surgical Suite for Trauma Care (ASSTC)
shelters. The ASSTC, though, does not meet the AMEDD's operational
requirements. It is anticipated that the Office of the Secretary of
Defense (OSD) will release $7.3 million for research and development
before the end of May 2001 and the total $8 million must be committed
by 30 September 2001. It has been recommended that these funds be
redirected and utilized for concept maturation, requirements
refinements, and advanced prototyping of an integrated medical hospital
system in support of the future Objective Force. The AMEDD has
developed requirements for a containerized shelter system to support
far forward surgical capability as well as other areas of combat health
support. At the present time, there is no dedicated continued funding
for either of these two initiatives.
The current DEPMEDS, in and of itself, does not provide protection
from NBC weapons. Under development, though, is the Chemically
Protected Deployable Medical Systems (CP-DEPMEDS) which possesses the
capability to chemically and biologically harden existing DEPMEDS
equipped hospitals and is a Joint Service effort with the U.S. Air
Force. It provides an environmentally controlled collective protection
for Level III medical treatment facilities that will support healthcare
in an environment contaminated with biological or chemical warfare
agents.
Under the Medical Reengineering Initiative (MRI), this collective
protection will be applied to the 84-bed and 164-bed MRI Corps Combat
Support Hospitals. Under the Medical Force 2000 (MF2K) structure, CP-
DEPMEDS is applied to the hospital unit base (HUB) of the Combat
Support Hospital. CP-DEPMEDS will be part of Operations Project Stock
and will be centrally stored/maintained in depot, and as pre-positioned
assets in theater. Another current and related program, Chemically
Biologically Protected Shelter System (CBPSS), addresses the need to
provide collective protection to medical units operating farther
forward on the battlefield. CBPSS, which is an integrated system, will
be provided to medical treatment squads that provide Level I medical
treatment. Future testing and evaluation will validate the feasibility
of providing CBPSS to Level II Medical Companies and Forward Surgical
Teams. While not addressing forward deployed medical hospitals, CBPSS
does demonstrate the AMEDD's efforts to provide collective protection
to medical units wherever it is deemed necessary on the battlefield.
NBC protection is a requirement for future medical shelter initiatives
to ensure that this protection is available. There is dedicated funding
for both CP-DEPMEDS and CBPSS through Joint NBC Defense Program and
Army funding. The current fiscal year 2002 Budget figures are as
follows: CPDEPMEDS--3 systems, $3 million; CBPSS--32 systems, $15.7
million. Training sets will be issued to AMEDD C&S and Regional
Training Sites--Medical sites.
The AMEV program implements the Army's Transformation Vision by
recapitalizing and remanufacturing excess Bradley M2A0s to enhance and
modernize the capabilities of the Legacy Force. Without the AMEV,
medical ground evacuation assets will remain essentially unchanged
since the 1960's. The AMEDD proposes fielding AMEV's to enhance
mobility in the Counter Offensive Force. With at a per unit purchase
cost of $870,000, the unfunded requirement for 280 AMEVs is
$243,600,000. The UFR is recognized/validated by OCDSOPS as a level III
UFR competing against all other combat systems within the Maneuver BOS.
The total objective force requirement for the UH-60Q(HH-60L/HH-60M)
is 385 MEDEVAC aircraft; 356 for the warfight and 29 for the
operational readiness float account. Of the warfight 356 aircraft, 191
go to the Active Component and 165 to the Army National Guard. The
current modernization projections for the UH-60Q(HH-60L/HH-60M)
complete the 117 aircraft requirement identified in TAA-05 for Force
Package One by 2013 and the 75 aircraft in Force Package Two by 2018.
At a cost of $4.6 million per UH-60Q(HH-60L/HH-60M), the 117 Force
Package One aircraft will cost $538 million and the 75 Force Package
Two aircraft will cost $345 million; cost of the entire program is $883
million.
______

Questions Submitted to Vice Adm. Richard A. Nelson

Questions Submitted by Senator Ted Stevens

FISCAL YEAR 2000 SUPPLEMENTAL

Question. How much relief has your direct care system received from
the fiscal year 2000 Emergency Supplemental?
Answer. In fiscal year 2000, Congress provided an Emergency
Supplemental to the Operations and Maintenance (O&M), Defense Health
Program (DHP) account totaling $1.2 billion. From this Supplemental,
Navy medicine received $52 million for our direct care system. We used
the $52 million to purchase collateral equipment for new construction
that was being completed in the near-term, and to buy forward-funded
health care contracts within our Medical Treatment Facilities and
Dental Treatment Facilities. Navy medicine did not have a significant
backlog of unfunded issues as we started fiscal year 2001 but changes
made by the TRICARE Management Activity (TMA) have reduced our
available funding and together with new healthcare benefits have
created a significant funding shortfall. Of note is the fact that the
workload produced by Navy medicine actually increased from fiscal year
1999 to fiscal year 2000.
Question. What happens when your MTFs are the first to pay the
bills, or the last to receive any funding relief?
Answer. The Navy Medical Treatment Facilities [MTFs] which make up
the Direct Care System have operated each of the last three years on a
severely constrained funding profile which we define at the sustainable
range of operations just above minimally executable. This allows us to
merely sustain current operations and does not allow the Direct Care
System to make needed improvements to patient care capabilities,
renovations of buildings that are continuing to deteriorate, replaced
outdated equipment, pursue additional continuing medical education for
our health care providers, nor fully implement new healthcare benefits.
The funding situation we have been in over the past three years has
seen new TRICARE benefits being added, thereby increasing the bills for
care in the Military Health System (MHS). Of necessity, what we cannot
provide in-house is referred to the private sector, via the Managed
Care Support Contractors. This has caused a requirement within the
Defense Health Program and the Office of the Secretary of Defense
(Comptroller) to continually seek offsets from the Direct Care System
to help defray a portion of those increased private sector costs. Our
MTF Commanding Officers are placed in the position where they do not
replace medical equipment when needed, and conduct only ``breakdown''
maintenance, that is, repair the breakdown, for both medical equipment
and facilities since we cannot afford to put in place regular
maintenance contracts which might preclude the breakdowns in the first
place. At the same time replacement of current medical equipment with
newer technology is not being accomplished and we have seen significant
downturns in equipment expenditures in the past three years.
The constrained funding environment described above also causes a
further degradation of the morale of our medical personnel as evidenced
by the Center for Naval Analysis study which shows the above issues are
having a negative impact, along with the low compensation issue, and
causing our mid-grade providers to leave the Naval Service, most often
without replacements being available.

CURRENT YEAR DHP FUNDING SHORTFALLS

Question. Do you have enough funds to fully execute your fiscal
year 2001 program?
Answer. There is a Defense Health Program (DHP) unfunded
requirement of $1.4 billion which the Surgeons General testified to as
a need for an Emergency Supplemental DHP Appropriation. $220 million of
the $1.4 billion is identified for the three Service's Direct Care
Systems. Of the $220 million, Navy Medicine's portion may be $40
million (depending on TRICARE Management Activity (TMA) distribution).
If the $1.4 billion emergency supplemental is passed, Navy Medicine
would get back the TMA 4th quarter loan of $45.1 million, in addition
to the $40 million noted above for a total of: $85.1 million.
The $85.1 million would still not meet the unfunded fiscal year
2001 requirements of $90.0 million leaving unfunded items such as:
Optimization efforts; NMC San Diego TRICARE Senior Prime Supplies; DHP
Health Professional Scholarship Program shortfalls; Pharmacy Advances
in Medical Practice (AMP) Tail from fiscal year 2000; Maintenance and
Repair (MRP) and new Immunizations. Fully funded, the Navy Medicine
budget requirement is $150.9 million.
A key issue/concern over the emergency supplemental involves the
timing of the bill passage and the provision of the funding to the
Services. If it is not passed and funding provided until August then
Navy Medicine will be unexecutable in the 4th quarter because funding
[$45.1 million] has been moved forward into the third quarter. Navy
Medicine would have to implement draconian actions to even start the
4th quarter. TMA has identified that they will go into violation in
mid-July 2001 if funding is not provided and Navy Medicine would not be
far behind them. This information has been reviewed with TMA on 1 March
2001.
Question. Where are your shortfalls?
Answer. We have a total of $90 million that is unfunded within our
fiscal year 2001 program.
This includes the following items:

In Millions

Submitted and Validated unfunded requirements..................... $40.0
Revised Financing............................................. 29.0
Pharmacy...................................................... 4.3
Immunization Tracking......................................... .6
Data Quality.................................................. 3.2
Expense Equipment............................................. 2.9
Additional Revised Financing...................................... 8.6
Pharmacy AMP tail................................................. 14.9
Immunizations (1/2 year Prevnar).................................. 5.9
HPSP Shortfall.................................................... 3.5
Utilities (29 Palms).............................................. .4
NMC San Diego TRICARE Senior Prime Supplies....................... 3.0
Optimization...................................................... 13.7
______
Total....................................................... 90.0

These are funding requirements that take us to a solvency level,
where our mission operations are considered to be sustainable.
Along with the actions already taken to remove the $17 million
withhold, not providing the $21 million Advances in Medical Practice
funding, and having the entire $7.1 million rescission impact held
totally against the Direct Care System, Navy Medicine becomes
unexecutable.
To fully fund Navy Medicine in fiscal year 2001 the following
funding is required:

[In millions]

Unfunded Requirements [from above]:............................... $90.0
Increase MRP from 2.23 percent to 3.0 percent (the Medical Target) 24.4
Fund fourth quarter NDAA Implementation........................... 45.1
______
SUBTOTAL.................................................... 159.5
=================================================================
________________________________________________
Unallocated Funds Available....................................... 8.6
=================================================================
________________________________________________
TOTAL....................................................... 150.9

Question. Is your direct care system fully funded in fiscal year
2001?
Answer. We have previously identified Navy Medicine's fiscal year
2001 shortfall of $150.9 million. That funding requirement, which is
due in part to identified shortfalls and various offsets already taken
by the TRICARE Management Activity, would provide funding to bring Navy
Medicine to a fully funded program. We have included in that figure the
additional $24.4 million for Maintenance and Repair (MRP) which would
bring that program to a funding level of 3 percent of Plant Replacement
Value which is the ASD (HA) Medical Standard. TMA has used funding
withheld from the Service budgets to fix various fact of life changes
in the Managed Care Support Contracts. Even if a supplemental is
approved at the $1.4 billion level, Navy Medicine's Direct Care System
will only receive benefit of approximately $79 million and would still
have a requirement for additional funds of approximately $72 million to
achieve the $150.9 million noted for fully funding our Direct Care
System.
Question. How will your fiscal year 2001 shortfalls impact delivery
of care in your hospitals and clinics?
Answer. We have focused funding reductions in the non-patient care
areas, such as Maintenance and Repair of Property (MRP), initial
outfitting of our new construction facilities, and other general areas
such as travel and equipment. At the same time, cost drivers which
affect the way we provide healthcare (the practice of medicine) are
being absorbed by our Medical Treatment Facilities (MTFs). An example
is pharmacy costs which are escalating at rates above ten percent yet
funded essentially level with last year. Navy MTFs are paying the
pharmacy bill and giving up something else in the MTF to afford these
increased costs. My fear is that we are coming dangerously close to not
performing required maintenance, replacing our medical equipment, and
impacting on our continuing medical education programs.

TRICARE FOR LIFE

Question. To arrive at a cost for ``TRICARE for Life'', has DOD
used accurate assumptions for medical and pharmacy inflation rates?
Answer. The funding estimates for the TRICARE For Life (TFL)
benefit in fiscal year 2002 are still working. I am reluctant to even
state the latest number as the estimates are still being worked
extensively between the Assistant Secretary of Defense (Health Affairs)
(ASD[HA]), the TRICARE Management Activity (TMA), the Services, the
Department of Defense (DOD) Actuary and others to derive the best
estimate of the costs for the wide range of benefits coming on line. I
can tell you that the latest estimate is around $4 billion for the DHP
in fiscal year 2002 which would drop off considerably in fiscal year
2003 because of the kick-in of the accrual financing methodology.
Question. On October 1st where do you believe retirees will go for
their new benefit--to the military treatment facility or in the
network?
Answer. Those retirees who have developed substantial relationships
with providers in military treatment facilities (MTFs) will continue to
rely on the MTF for their care and will likely have higher expectations
regarding the delivery of services. Those retirees who have not
utilized MTF services other than perhaps pharmacy services will likely
not ``come back'' to the MTFs. The vast majority of those retirees who
intermittently use the MTF will be swayed by specific MTF capabilities
including access, availability of services, reliability, enhancements,
comprehensive management including care coordination and case
management, and customer service. For those retirees who have current
relationships, it is important to recognize that they too will
eventually migrate away from the MTF if the above capabilities and
expectations are not met. Of particular importance in being able to
provide comprehensive care and high quality customer service will be
the ability to predict the health care requirements and then resource
for those needs. Partial commitment and marginal funding will result in
a spiral of attrition which will quickly accelerate and impact both our
ability to live up to the intent of Tricare For Life and our need to
serve these important beneficiaries to maintain a robust Military
Health System.
Question. If the retirees go to your MTFs, is your system ready and
funded for the new workload?
Answer. Navy Medical Treatment Facilities (MTFs) currently provide
care on a space available basis to retirees age 65 and older except at
Naval Medical Center San Diego which is a TRICARE Senior Prime
Demonstration site with an enrolled 65+ population. The performance of
this level of effort for the Medicare Eligible Retirees accounts for
approximately 16 percent of the healthcare performed at our three
Medical Centers, 9 percent of the care performed at our Family Practice
Teaching Hospitals, 8 percent of the care at our non-teaching community
hospitals and much smaller percentages across the remainder of the
Navy's Ambulatory Care Centers and Clinics. The care provided by our
Medical Centers and Teaching Hospitals is in direct relationship to the
higher morbidity cases that this population presents for our residency/
training programs and is supportive of the medical readiness
requirements for our healthcare professionals.
We believe many 65+ beneficiaries who have established
relationships with civilian providers will maintain those
relationships, particularly now that TRICARE will be second payer. But,
at the same time, we anticipate an increased demand by our 65+
population for care in our military treatment facilities (MTF). Our
number one priority is the health and welfare of our active duty
forces. To ensure the operational forces are ready to deploy and that
our medical personnel maintain the skills necessary to support the
operational forces, we must balance our workload to meet readiness and
graduate medical education requirements, and our commitment to our
active duty families and other retirees and their families. Our plan is
to provide as much service as possible in-house, and then rely on
available private sector care (where Medicare is first payer and
TRICARE second payer) for the remainder. However, the Military Health
System's ability to meet the health care needs of our entire
beneficiary population is contingent upon full funding of our current
requirements as well as those new benefits contained in the Fiscal Year
2001 National Defense Authorization Act.

FULL FUNDING OF THE DEFENSE HEALTH PROGRAM (DHP)

Question. Is your DHP funding stable and predictable?
Answer. The short answer to this question is no. The best example I
can give of this is what is happening this year, and is somewhat
typical of the past two fiscal years. We started out fiscal year 2001
at a funded level which was in the low sustainable range. Since the
beginning of the fiscal year we have had $17 million withdrawn from our
direct care funding for a 1 percent withhold at TRICARE Management
Activity (TMA), we have not received Advances in Medical Practice
funding in the amount of $21 million to initiate pharmacy actions and
pay for the tail on advances in medical practice implemented during
fiscal year 2000, we have had a $7.1 million reduction placed against
the Direct Care System associated with the Congressional Rescission
which was taken totally against the Direct Care System and none against
the Private Sector Care arena thus effectively doubling the financial
impact of the rescission.
Finally, we have been informed of a TMA proposal to withdraw $45.1
million from the fourth quarter to pay for implementation bills
associated with the Fiscal Year 2001 National Defense Authorization
Act. In total that would amount to an impact of $90.2 million and would
make us unexecutable during the remaining portion of this fiscal year.
Subsequently, TMA withheld $45.1 million from the fourth quarter to pay
for the implementation of the Fiscal Year 2001 National Defense
Authorization Act.
Question. If not, how does that instability impact your healthcare
system?
Answer. The impacts have been significant! First and foremost, this
instability prevents our Commanding Officers from putting a healthcare
plan in place for their command that they are confident they can
accomplish. They are placed in a position of merely reacting to the
next set of reductions to their financial planning figures. This lack
of stability causes important equipment replacement, facility repairs
and upgrades, and continuing medical education requirements to be
placed on hold until such time as either a supplemental or a
reprogramming action takes place and provides funding at an adequate
level to the Direct Care System. These supplementals usually take place
late in the fiscal year and although the funding is needed and
appreciated, it does not allow us to project that funding over the
entire year to achieve the greatest level of benefit.
Question. Has the DHP budget accurately forecast ``cost savings''
and ``efficiencies?''
Answer. In the past our budgets have reflected efficiencies and
savings. ``Utilization Management'' was an example of these type of
efforts. Through adopting managed care practices we have been able to
make some savings, but we are presently affected by the same cost
drivers as in the civilian healthcare community.
Question. Have these savings materialized?
Answer. At the same time there are moderate savings, new healthcare
benefits have been implemented that has required the reinvestment of
those savings. As demonstrated by the number of times we have had
reprogramming and supplemental appropriations, the budgeted savings
have almost never materialized in the form of actual savings as the
healthcare program requirements have outstripped any savings
identified.
Question. Have you had a loss in buying power over the years?
Answer. Loss of buying power is a certainty. Again, we must only
look to pharmacy were we are allowed to budget for inflation at 5.9
percent while costs are escalating at over ten percent. Over the past
several years there have been numerous articles in the civilian sector
referring to cost increases for various healthcare plans. These
articles and the literature fully support that the medical inflation
rate is close to 10 percent while the Office of Management and Budget
has continued to use a standard inflation rate across the entire DOD
between 3.9 percent and this year 5.9 percent. Rising costs have also
affected our facilities maintenance program and limited our medical
equipment replacement program.

VENTURE CAPITAL FOR THE DIRECT CARE SYSTEM

Question. Please tell us about your plans to make your hospitals
and clinics more productive.
Answer. The Navy Primary Care Optimization Model (PCOM) was
developed to assist corporate and medical treatment facilities (MTFs)
with calculating actual and potential enrollment capacity, while
providing baseline health system information. Many commands have
recently reported moderate capacity increases.
Clinic support, time management techniques, space utilization and
equipment support are several of the means used to increase provider
availability, ensure appropriate clinic operations and utilization, and
increase provider and clinic productivity.
--Clinical manpower support has been increased through resource
sharing, direct contracting, and relocating internal staff.
Increases in clinical support positions include appointment and
secretarial personnel, and medical record coders. In addition
to these efforts, reserve personnel are used to augment clinic
staff and increase clinic productivity. The recent transfer of
operational control of the Naval Reserve medical community to
BUMED will improve the ability to identify and coordinate
reserve support for both provider and clinical support staff.
--Time management techniques that increase provider availability in
the clinic include: minimizing collateral duties (assignments
in addition to clinical duties) and committees assigned to
providers; designating specific days and hours for command wide
administrative, training and meeting times; and establishing
guidelines to coordinate care team schedules (provider, nurse,
corpsman).
--Space utilization--An adequate number of examination rooms per
provider is required to maximize provider/clinic productivity.
Many sites have increased the number of provider examination
rooms by consolidating administrative spaces and converting
administrative spaces into examination rooms.
--Equipment support--Additional investments in support equipment
include auto reminder systems, advanced phone systems, mobile
dictation, voice recognition technologies and pagers for triage
nurse.
In addition to the above mentioned efforts to improve provider
availability and ensure their appropriate utilization, and increase
clinic productivity, there is significant interest in developing clinic
management practices, improving appointment scheduling processes, and
further developing Fleet/Marine Corps Liaison Programs:
--A clinical management course is in progress throughout Navy
Medicine. The course provides guidance on incorporating
business rules, developing roles and responsibilities of the
different clinic staff, using data systems, monitoring
population health, and developing appointment scheduling
templates and schedule management. The course emphasizes clinic
organization and operations that will maximize efficiency for
patent care.
--Appointment scheduling processes focus on improving bookable hours
(the actual time available for appointments). Many clinics have
altered their clinic hours or have changed appointing
procedures to maximize bookable hours. Several sites have
implemented web-based appointing and other e-health initiatives
to improve patient access. We have received favorable reports
from Naval Medical Clinic Patuxent River regarding open access
appointing.
--Fleet/Marine Corps Liaison Programs--There is continued development
within most commands reporting full-time liaison with direct
access to senior leadership. Proactive measures to identify and
meet the health care needs of operational forces include
advance consult reviews, pier side visits, senior leadership
visits and appointing privileges for liaison staff. A Fleet/
Marine Liaison instruction is currently under review.
Question. Do funding constraints keep you from optimizing your
system?
Answer. Yes, funding constraints are affecting the rate at which we
can optimize the Navy Medical System. While we have done a number of
optimization improvements, we do not have adequate funding to initiate
some basic improvements like two exam rooms per provider, adequate
support staff, and support for accurately coding patient encounters.
These optimization efforts require continuous and reliable infusion of
capital if we are to be successful.
Question. Would a ``venture capital'' fund, or a ``Surgeon
General's Investment and Initiative Fund'' allow you to operate your
system more smartly and at less expense?
Answer. The operating budget for Navy medicine's direct care system
has grown steadily over the past several years. However, this growth
has been barely sufficient to support new or expanded benefits as well
as new programs. Fiscal discipline and sound financial management at
all levels of the organization have been necessary to ensure a
consistent level of health care services. Navy medicine has lacked the
resources and financial flexibility to make strategic investments that
will provide long term stability.
Private sector medical organizations recognize the need to make
ongoing invests which produce future revenues. The current budget
structure for Navy medicine does not offer a similar opportunity. The
establishment of a Surgeon General Investment Fund would provide a
vehicle for financing moderate to long term investments that can be
supported by a disciplined business case analysis process.
Establishment of such a fund would require specific guidance from
Congress to ensure the monies were used for the intended purpose. The
fund must be clearly identified as separate from the O&M,DHP account,
and funding for the direct care system cannot be offset because
investment funds are provided. Multi-year, ``no color'' funds would
provide maximum flexibility. Each of the Surgeons General should be
provided an investment fund to avoid non-productive competition for the
available dollars. Use of the fund would be predicated on a sound
business case analysis. Periodic reports to Congress would
appropriately include the business case analysis for each investment,
the execution status, and the monitoring for Return on Investment.
Such an investment fund could have a wide range of applications.
For example, it could be used to procure digital radiology for all of
Navy medicine. This would provide efficiencies in how x-rays are read,
stored, and distributed. Other optimization efforts would also be
logical candidates for the investment fund.
A Surgeon General Investment Fund would provide an appropriate
vehicle for supporting business driven decisions with a moderate to
long term Return on Investment.
Question. If such a fund were established, please explain how the
``best business case'' approach would be used to identify, select and
fund projects.
Answer. Navy Medicine relies heavily on the philosophy and concepts
associated with a strong business case analysis process. For over a
year, the Bureau of Medicine and Surgery (BUMED) has had a formalized
process and management structure to be used at the headquarters level
as well as the clinic level. The documentation and processes can be
found on the Navy Medicine web site (https://bumed.med.navy.mil/med03/
tools/default.asp).
The strategic element of a business case analysis is harvesting the
potential opportunities and using the analysis to lead to correct
decision making. Our commands remain very active in formulating new and
innovative ways of doing business either at the local military
treatment facilities or impacting on the entire Navy Medicine System.
The Department of the Navy recently articulated its Business Values and
Goals (BVG) in a major step toward transforming our business culture
and practices. In short, the Department of the Navy Business Vision
states that the Department will continue to provide the dominant global
naval force and develop future capabilities to safeguard the nation. It
will achieve this vision through:
--Innovation.--Continually fostering conceptual, technological, and
operational superiority.
--People.--Recruiting, engaging and retaining the best people--
military and civilians.
--Decision Support Systems.--Deliver recognizable value for every
dollar spent.
--Organizing Work.--Creating business environment focused on teamwork
and outcomes.
The release of BVG is opportune as we in the Navy Medical
Department seek to refine our focus on Best Business Practices. Our
fiscal realities dictate that we derive the best value per dollar spent
through the application of best business practices. Values may be
viewed in terms of reduced cost, reduced cycle time, improved quality,
increased productivity, or increased return on investment.
Objectives falling under our Best Business Practices goal clarify
my expectations--Consistent, complete, relevant, timely and reliable
data on cost and performance will come through as an imperative. We
expect all of Navy Medicine to explore civilian and military health
care innovations and business practices and rapidly adopt those that
have demonstrated success. BUMED has introduced a Best Business
Practice section on our homepage (https://bumed.med.navy.mil/med08/
bestpractices/bestPractices.htm) to facilitate this.

ORGANIZATIONAL REFORM

Question. Would the creation of a ``Joint Medical Command'' or a
USMEDCOM'' remedy some of the problems experienced with DOD medical
programs?
Answer. Any reorganization effort alone will not solve chronic
financial shortfalls in the Defense Health Program. A combination of a
new organizational structure, better business practices, and an
improved purchased care contracting strategy will together strengthen
the Defense Health Program, but must be accompanied by addressing the
financial baseline.
Question. Is there clean authority and accountability in the DOD
medical programs today?
Answer. There are not clear lines of authority and accountability
in DOD medical programs today, outside of Service command and control
relationships extant in each medical departments' own organizational
structure. For the Defense Health Program, resources and policy flow
from an organization with no command and control over the healthcare
system. This has been problematic in attempts to establish regional
healthcare markets where multi-service military treatment facilities
combine with centrally managed healthcare contract funds to provide
care and control costs. Support and coordination of readiness
requirements often conflict with attempts to minimize purchased care.
The current organizational structure does not facilitate resolution of
this conflict at a single office.
Question. Would a ``USMEDCOM'' foster better lines of
responsibility for DOD medical programs?
Answer. A CINC or USMEDCOM, if constructed under Joint doctrine,
would foster better lines of responsibility for DOD medical programs by
having direct command and control where needed. A set of regional Joint
Medical Task Forces (JMTF), with command and control over all military
treatment facilities and funding for purchased care, would be in a
position to optimize care and control costs in a given region.
Service Component Commanders, under command and control of the
CINC, would be required to deliver to each JMTF a fully funded and
ready military treatment facility, capable of meeting its readiness
mission and delivering a defined capacity of medical care. To make this
executable, all Direct Care system funds must flow through the Service
Component Commanders. The JMTF commanders, to meet the remainder of
regional health care demand, must have control over all purchased care
funds.

RECENT TRICARE SATISFACTION SURVEY

Question. Have there been recent improvements in customer
satisfaction with TRICARE? What remains to be done to further improve
satisfaction with the TRICARE program?
Answer. Yes, there has been steady improvement in customer
satisfaction as reported in the 2001 Stakeholders Report--an
independent evaluation of TRICARE provided by the Center for Naval
Analyses and the Institute for Defense Analyses. In the eight regions
where TRICARE data is available for at least a year or more, our
patients report that it is easier to get an appointment and there is a
shorter waiting period to see providers. We are seeing increased
satisfaction with the quality of care and note that the satisfaction
increases as our patients become more familiar with TRICARE.
My Commanding Officers are all aware of the emphasis I place on
customer service and the realization that our challenge and efforts in
this area will never diminish. I have the ability to view what their
patients report on a monthly basis and take pride in the steady
improvement that I have seen in the data. For example, I was pleased
when Naval Hospital, Jacksonville was recognized by TRICARE Management
Activity as the number one military treatment facility in the area of
customer service for fiscal year 2000.

MEDICAL RECRUITING AND RETENTION

Question. How is your service doing in recruiting and retaining
medical professionals?
Answer. The status of Medical Corps recruiting and retention must
look separately at trained specialists and at scholarship programs.
Recruiting and retaining fully trained specialists are difficult,
especially for the critical wartime specialties. While the overall
annual Medical Corps loss rate is around 10.5 percent, annual loss
rates for fully residency-trained specialists clusters around 20
percent. Some communities historically can only achieve 80 percent
manning (general surgery, orthopedic surgery). The Officer Community
Manager (OCM) at Naval Personnel Command projects that 11 of 23
communities will fall below 90 percent manning by fiscal year 2007. The
Center for Naval Analysis (CNA) report ``Physician Satisfaction
Survey'' documented that unobligated retention rates have significantly
decreased since fiscal year 1992, and that higher military-civilian
pay-gaps are associated with lower unobligated retention. Physicians
leaving the service cite increasing pay differentials with their
civilian counterparts, along with other dissatisfiers. The Center for
Naval Analysis is conducting a 3-phase Health Professions' Retention-
Accession Incentives Study (HPRAIS) to provide a more indepth analysis
of the effectiveness of retention and accession initiatives. We are
reviewing the results of Phase 1 of this study and planning necessary
actions.
About 94 percent of our Medical Corps officers, and hence
specialists, enter the Naval Service through the Uniformed Services
University Health Services (USUHS), the Armed Forces Health Professions
Scholarship Program (AFHPSP) and the Financial Assistance Program
(FAP). Data suggests longer time in uniformed service prior to
completing specialty training predicts longer service on active duty as
a specialist.
Applicant pool and funding determine whether USUHS, AFHPSP and FAP
will deliver sufficient numbers of appropriately qualified physicians.
Total U.S. medical school applications are down significantly,
increasing the competition for the most qualified applicants.
Qualifications remain high for selectees for USUHS and AFHPSP, but
declining applicant numbers and quality are concerning. Of more
immediate concern is that funding for AFHPSP and FAP appears to be
falling behind rising program costs. Fiscal year 2001 recruiting goals
for AFHPSP (320) and FAP (51) required to meet future requirements may
have to be revised downward because of funding limitations.
For the Dental Corps, we are beginning to experience degradation in
our ability to recruit and retain dental officers in the Navy. After a
decade of being significantly undermanned we were able to achieve full
end strength in fiscal years 1999 and 2000. This was accomplished as a
result of aggressive recruiting efforts, new Health Professions
Scholarship Program opportunities and legislative pay initiatives from
fiscal years 1997 and 1998. However, as of February 1, 2001 we are down
to 97 percent of end-strength, a shortfall of approximately 40 Navy
dentists. Data available to us, such as a 44 percent increase in
resignation requests from junior officers over last year, indicates
that this trend will worsen over the next 3-5 years if there is no
intervention.
The Navy Nurse Corps has met recruiting goals for the past 10
years. Higher than expected retention rates over the past four years
have kept recruiting targets at manageable levels, even in the face of
a developing nationwide nursing shortage. As the shortage has worsened,
nurse recruiters have increased efforts by using Nurse Corps volunteers
from active and reserve units who desire to help recruit nurses into
the Navy. The volunteers speak at high schools, nursing schools, and
professional nursing conferences. The accession bonus is critical to
our efforts to recruit nurses.
In the Medical Service Corps, we are currently on target to meet
recruiting goals in less than half our specialties. We have good
recruiting success when we offer scholarship and internship options,
but funding only permits us to offer such options to less than 20
percent of our recruits. Although optometrists, pharmacists,
psychologists and environmental health officers present the greatest
challenges at present, we are also having difficulty recruiting enough
health care administrators, audiologists, industrial hygienists,
entomologists, and microbiologists. Although our overall loss rate is
about nine percent, our success varies greatly between specialties. Our
licensed professionals and doctorate prepared specialties have rapidly
increasing educational debt loads and a substantial pay gap between the
private sector, which are adversely affecting retention. Because we
have been meeting the greatest needs by offering educational
incentives, we are recruiting, training, then losing our experienced
professionals to the private sector. This is leaving us with limited
experience or gaps of up to 20-45 percent in fields such as optometry,
psychology, pharmacy, and some advance health care administrator
specialties.
For Hospital Corpsman and Dental Technicians, currently the U.S.
Navy recruiters can fill all quotas given to them. However the quotas
given to the recruiters have not been sufficient to fulfill our
requirements. Numerous shortages exist in our inventories impacting our
peacetime and wartime capabilities. A plan was submitted to the Chief
of Naval Personnel to increase enlisted accessions to recruit to our
requirements.
Question. Is the current special and incentive pay structure
adequate to keep your force manned?
Answer. Recruiting and retention are most difficult for the
specialties where the gap between military and civilian pay is highest.
The Center for Naval Analysis (CNA) report ``Physician Satisfaction
Survey'' documented that inadequate pay was the top reason for
dissatisfaction with continued service. In a supplemental report,
``Comparison of Navy and Private-Sector Physicians' Total Compensation,
by Medical Specialty,'' CNA found that Navy physicians' compensation is
2-56 percent below comparable civilian compensation by specialty and
similar career points. While CNA also found total career compensation
for 20-year retirement-eligible Navy physicians who work in the private
sector until age 65 comparable to civilian physicians, 86 percent of
physicians forego retirement eligibility to leave service early for
civilian practice with its higher salaries.
Data also shows that as the military-civilian pay gap increases,
physicians without remaining service obligation are more likely to
leave service.
Calculated median retention by source of accession supports the
notion that specialists exit early. Overall, the median length of non-
obligated service for specialists averages only 4.4 years. That average
drops to 2.9 years when Uniformed Services University accessions are
excluded.

----------------------------------------------------------------------------------------------------------------
Median Lengths of
Retention (in years) Median
from: Length of
Percent of -------------------------- Non-
Source of Entry Accessions End of obligated
Start of Initial Service \1\
Active Duty Service as a
Obligation Specialist
----------------------------------------------------------------------------------------------------------------
Uniformed Services University............................... 12.8 17.5 10.5 9.0
AFHPSP--Direct Entry........................................ 56.7 8.5 4.5 4.0
AFHPSP--1 year delay........................................ 7.4 4.5 1.5 4.0
AFHPSP--NADDS............................................... 13.3 4.3 1.3 1.5
Direct Accessions........................................... 3.8 6.0 4.0 4.0
Voluntary Reserve Recall.................................... 2.5 9.0 7.0 7.0
Financial Assistance Program................................ 3.7 3.8 1.8 1.3
===================================================
Weighted Average............................................ ........... 8.5 4.6 4.4
----------------------------------------------------------------------------------------------------------------
\1\ No obligation for initial service or training.
AFHPSP = Armed Forces Health Professions Scholarship Program.
NADDS = Navy Active Duty Delay for Specialty-training.

For Navy Dentistry, the current special pay structure is not
adequate to keep it fully manned. Two factors are the primary
contributors to this. First, many of our dentists, especially junior
officers, suffer under crushing debt burdens. We are only able to bring
60-70 percent of our new dentists onto active duty under the Health
Professions Scholarship Program meaning that the remainder typically
have significant educational loans. Servicing this debt burden, which
frequently exceeds $100,000, on a junior officer's income is a distinct
hardship. (Note--Educational loan debts for dentists were highlighted
during testimony before the Senate Finance Committee on February 14,
2001) Secondly, there is a well established pay gap between military
dentists and their civilian counterparts. In some instances this pay
gap is over 70 percent.
For the Nurse Corps, we believe not. Currently, only nurse
practitioners, midwives and nurse anesthetists receive any type of
special pay for retention. Although the existing special pays have been
successful retention tools thus far; the civilian-military pay gap in
some fields continues to grow, most notably for the entry-level
certified nurse anesthetists. In order to more accurately gauge
compensation gaps for both generalist and advanced practice nurses, the
Nurse Corps is included in the Center for Naval Analyses study on
Health Professions Retention/Accession Incentives. Results of the study
will provide a tool for future strategies. Further retention bonuses
and flexibility to use these bonuses may be needed to retain all types
of nurses as competition increases for the dwindling supply.
For the Medical Service Corps, special pays have not been updated
for over 10 years and some pays, such as optometry special pay have not
been updated in 20 years. At its present rate of $100 per month, the
optometry special pay no longer assists with retention. Special pay and
accession bonuses have recently been approved by Congress for
pharmacists but have not yet been funded. Expansion of educational debt
repayment options could significantly benefit both recruitment and
retention.
For the Hospital Corpsmen and Dental Technicians, retention needs
to remain a priority and the best way we can accomplish this is to
increase program dollars to ensure that our enlisted communities
receive additional special duty assignment pays and reenlistment
bonuses.
Question. Where do you have the most difficulty recruiting and
retaining medical professionals?
Answer. Recruiting and retention are most difficult for the
specialties where the gap between military and civilian pay is the
highest.
Question. What specialties are most undermanned?
Answer. The most undermanned specialties currently are general
surgery and all surgical subspecialties, orthopedic surgery, diagnostic
radiology, anesthesiology and urology.
Many of these specialties are critical wartime specialties and
shortfalls could have a negative impact on medical readiness. In a
peacetime setting, we augment services in these specialties by using
civilian providers at a substantial cost to the MTF/Military Health
System.
The following military physician specialties are experiencing
shortages within Navy Medicine:

Percent manned

Surgical Critical Care............................................ 8.0
Adolescent Medicine............................................... 30.8
Neurosurgery...................................................... 78.5
General Surgery................................................... 77.0
Radiology......................................................... 81.0
Cardiothoracic Surgery............................................ 31.0
Gastroenterology.................................................. 86.0
Orthopedic Surgery................................................ 86.0
Urology........................................................... 83.0

For the Dental Corps, the greatest retention challenges are for
junior dental officers at the end of their initial active duty
obligation and recently trained specialists at the end of their active
duty obligation for training. We are fortunate to have the majority of
our specialties manned at authorized levels. This is largely the result
of the Dental Officer Multi-year Retention Bonus. It should be noted
that the obligation period for many of these bonus contracts expires
October 1, 2002 and we anticipate a wave of resignations and
retirements when this occurs. As always, recruiting minority and female
dental officers is problematic, but the subject of intense efforts.
The Navy Nurse Corps has the most difficulty recruiting Certified
Registered Nurse Anesthetists, and experienced perioperative; maternal-
infant, psychiatric and critical care nurses. Shortages in these
specialties also exist in the civilian sector where ``sign-on'' bonuses
and generous salary packages make it very difficult to recruit theses
nurses into the military.
In the Medical Service Corps, we have not met recruiting goals for
optometrists for at least 10 years and are having difficulty retaining
the ones we do recruit. Other licensed clinical professionals such as
pharmacists, and psychologists have traditionally also been difficult
to recruit and retain but we are having some recruiting success with
current scholarship and training incentives for these communities.
Retention continues to be an issue for psychologists however. Although
optometrists, pharmacists, psychologists and environmental health
officers present the greatest challenges at present in the Medical
Service Corps, we are also having difficulty recruiting enough health
care administrators, audiologists, industrial hygienists,
entomologists, and microbiologists. Overall, the Medical Service Corps
is well manned at present but our concern is that increasing
educational debts and civilian pay disparities are causing both
recruitment and retention problems which could rapidly change our
balance. The specialties most undermanned at present are optometrists,
biochemists, and some health care administrator subspecialties.
The most difficult area for recruiting in our enlisted community
are the Morticians. Unlike our other Navy Medicine enlisted members
there is no Navy equivalent school for this specialty so we have to
recruit from the professional sector vice recruit from within.
Retaining Sailors in specialized areas such as Reconnaissance Corpsman,
Laboratory, Psychiatry, Respiratory, Physical Therapy and Surgical
Technicians remains difficult. Increased special duty assignment pay
and reenlistment bonuses would not only enhance program management, but
also retain and attract our most talented Sailors.
______

Questions Submitted by Senator Richard C. Shelby

Question. What is the status of demonstration projects that seek to
address these problems? Retiree and dependent access to military
healthcare in remote areas has become problematic. I know this is true
in a number of areas, including rural areas of Alabama. I would like to
ask each of the members of panel one to comment on DOD plans to meet
the healthcare needs of military personnel, dependents and veterans
living in rural areas with no local access to military healthcare
facilities.
Answer. Navy and Marine Corps personnel stationed 50 miles from a
military treatment facility are currently covered under a health care
program called TRICARE Prime Remote. This program, which started in
1996 and became effective throughout the country on October 1, 1999,
was developed to provide the ``Prime'' benefit to eligible Active Duty
Service Members in remote areas. Several surveys reported widespread
dissatisfaction among active duty members in remote areas in regard to
excessive travel time for medical care and claims processing delays.
This program has been expanded to cover Family members beginning
October 2000.
We are aware that all of our beneficiaries do not live near
military treatment facilities. The TRICARE Management Activity (TMA)
and our Regional Lead Agents monitor access to determine if providers
are not seeing our beneficiaries. One indicator we monitor is the
physician participation rate. The most recent report shows that
physicians are participating in 96 percent of all TRICARE claims; that
is, there is no balance billing of beneficiaries on 96 percent of the
claims filed under TRICARE. This is an all time high level of physician
acceptance of our payment rates and billing procedures. In addition,
TMA monitors the adequacies of the networks that the managed care
support contractors are required to develop. When we become aware of
areas where providers do not accept Medicare or TRICARE, we work with
the Regional Lead Agent to provide options for care to the beneficiary.
We also have a number of partnerships with the Veteran's
Administration. Their Hospitals are key members of our TRICARE
networks. The Veterans Administration facilities also contribute
greatly by caring for active duty patients with head injuries for
expeditious care and rehabilitation.
Even with the coverage of civilian provider networks, participating
providers, TRICARE Prime Remote, Veteran's Administration facilities
and Designated Providers there are still areas that we must station our
active duty force where there may be a paucity of services. We continue
to identify these areas and work hard to meet their needs and the needs
of their families.
Question. The committee is aware that significant effort has been
directed during the past two years to analyze, understand and
incorporate some commercial best practices for administering
prescription drug benefits. I would like to ask each of the members of
panel one to update the status of DOD's review of commercial best
practices and DOD's view on incorporating some of these practices for
administering prescription drug benefits.
Answer. Department of Defense (DOD) has incorporated or is in the
process of incorporating several commercial best business practices
aimed at providing a uniform, consistent and equitable pharmacy benefit
while optimizing available resources. A few are highlighted below:
--The Pharmacy Data Transaction Service (PDTS), developed and
implemented by TMA, is a centralized patient prescription
profile that integrates prescription data from all DOD direct
care pharmacies, the National Mail Order Program (NMOP), and
the TRICARE Managed Care Support Contractors retail pharmacy
networks. The PDTS ensures that any prescription filled for a
TRICARE beneficiary is checked against all other prescriptions
for that beneficiary. The PDTS helps to assure that patients do
not receive duplicate prescriptions or prescriptions for drugs
that interact negatively with other drugs. PDTS significantly
enhances the ability of the doctor and pharmacist to prevent
medication errors and provides DOD with aggregate prescription
information that can be used to assess and identify cost saving
measures and enhance patient care decisions.
--Restructured/simplified tiered pharmacy benefit copayments for use
of the NMOP and retail pharmacies (effective April 1, 2001)
which closely mirrors co-payment structures in the commercial
best business practice of pharmacy.
--Continue to pursue joint ventures with Veterans Administration (VA)
in the areas of joint pharmaceutical contracts, where
clinically appropriate.
DOD/VHA are exploring the feasibility of utilizing VA's
Consolidated Mail Outpatient Prescription System (CMOPS) to process
refills generated through our direct care pharmacies; alleviating
congestion at MTFs and providing relief to understaffed military
pharmacies.
Question. Admiral Nelson, please provide me with an update on acute
lung injury research, which has been identified by the Committee as a
focus area for the DOD Medical Research programs.
Answer. Acute Lung Injury Research is a topic area in the fiscal
year 2000 Congressional language for the Peer Reviewed Medical Research
Program. This program is managed by the U.S. Army Medical Research and
Materiel Command as part of the Congressionally Directed Medical
Research Program. For fiscal year 2000, there were 20 proposals
received for acute lung injury research. These proposals underwent a
two tiered review process, including scientific peer review and
programmatic review. None of the 20 proposals were selected for
funding. Acute lung injury research will also be a topic area for the
fiscal year 2001 program.
The Naval Health Research Center Toxicology Detachment, at Wright-
Patterson Air Force Base, had animal model research into acute lung
injury until this fiscal year. Funding was not continued, and the
research has ceased.
A study by the National Institute of Occupational Safety and Health
(NIOSH) assessed incidence of sarcoidosis among Navy enlisted personnel
and suggested a relationship of sarcoidosis with assignment aboard
aircraft carriers. Navy has initiated a Congressionally-funded study
through Navy Health Research Center to correlate results of the NIOSH
study with a pathologic review of tissue samples at the Armed Forces
Institute of Pathology taken from naval personnel during the 1960s and
1970s. While not a study of ``acute'' lung injury, this information may
be of interest as well. The study is in the very earliest stages, and
no data are available.
______

Questions Submitted by Senator Kay Bailey Hutchison

TRICARE BUSINESS PRACTICES

Question. Last year I asked if the amendment that provided for
increased reimbursement levels for TRICARE was adequate, particularly
in areas where our military personnel could not get a provider to see
them. I was told last year that we had seen an improvement by all three
Surgeons General. Additionally, reports from Dr. Clinton's office also
say that providers and patients are happier, but I can tell you though
that is not the information that I am receiving form my constituents to
include patients and providers. May say they cannot locate a provider
that will accept TRICARE for the very reasons that we talked about
before, inadequate reimbursement, delay in payment and inadequate fee
structures that do not compare with their civilian counterparts.
Currently TRICARE reimbursement is at the 45 percent rate allowable,
like MEDICARE reimbursement. It is my understanding that under the old
CHAMPUS program, providers were reimbursed at 80 percent. An increasing
number of MEDICARE providers are leaving networks because of this low
reimbursement rate.
Gentlemen is this adequate?
Answer. Through the Managed Care Support Contractors, the TRICARE
Management Activity (TMA) and our Regional Lead Agents we monitor
access to determine if providers are not seeing our beneficiaries. One
indicator we monitor is the physician participation rate. The most
recent report shows that physicians are participating in 96 percent of
all TRICARE claims; that is, there is no balance billing of
beneficiaries on 96 percent of the claims filed under TRICARE. This is
an all time historically high level of physician acceptance of our
payment rates and billing procedures. In addition, the TMA monitors the
adequacies of the networks that the managed care support contractors
are required to develop. The contractors are required to provide to TMA
and the Regional Lead Agents a quarterly report on the status of the
network and the activities they are taking to ensure that an adequate
number of providers, with space, are available for our beneficiaries.
Question. Will this impact the number of providers available to our
over 65 year old beneficiaries?
Answer. Because Medicare is the primary payer, because TRICARE's
reimbursement rates are tied to Medicare's rates, and because
Medicare's reimbursement rates are widely accepted by physicians, we
expect high levels of physician participation and access to needed
health care services.
Question. In areas such as Dallas, which has approximately 100,000
beneficiaries, and there is not a ``military'' medical treatment
facility, how are we addressing issues of access to providers?
Answer. The managed care support contractor in Region 6, Health Net
Federal Services, is required under their contract to establish a
TRICARE Prime network in the Dallas-Ft. Worth area. The most recent
network adequacy report documents a strong network of primary and
specialty care providers totaling over 1,900. Recent surveys and
contractually-required reports from Health Net Federal Services
indicate that access standards are being met, and 90 percent of the
network providers have open panels and are accepting new patients.
Also, CMAC rates for 2001 increased approximately 4 percent in the
aggregate, while some ``difficult to obtain'' specialties'
reimbursement rates were increased even more.
We also monitor physician participation in the TRICARE Standard
program, and are pleased to report that it is above 90 percent. By
``participation'', we mean that on 90 percent of all TRICARE claims
filed for this area, there is no balance billing of the beneficiaries.
Question. Some of my constituents are concerned about the quality
of provider you get when you reimburse at 45 percent as opposed to 80
percent. Are you offering our soldiers and their families the best of
the best medical care or second rate medical care through TRICARE?
Answer. We always strive for and truly believe our beneficiaries
deserve the best of the best. Department of Defense's reimbursement
rates are established pursuant to Section 1079(h)(l) of Chapter 55 of
U.S.C. Title 10. This statutory provision states that the TRICARE
maximum physician payment amounts should be set at no more then
Medicare's level of physician payments. We think that TRICARE maximum
allowable payment levels (known as the CMACs) are equal to about 58
percent of the providers' billed charges, not 45 percent. Due to
provider network discounts, the actual payment levels are about 50
percent of billed charges. This is consistent with many private
insurance payers, who have established rate schedules that are
considered reasonable even though actual payments are less than billed
charges. The inception of TRICARE marked the first time that defined
networks of credentialed providers were available to our beneficiaries.
Prior to TRICARE, beneficiaries relied on yellow pages and word of
mouth for providers. Those providers that accept TRICARE and are in our
TRICARE Networks must meet tough requirements in our credentialing
process, as required by our contracts, before they can see our
beneficiaries. Network physicians are typically Board-certified. We
believe the quality of care through TRICARE is higher than ever before
because of these credentialing requirements.
Question. What do you believe are the key issues in attracting and
retaining providers?
Answer. For Active Duty Physicians, the Center for Naval Analysis
(CNA) report ``Physician Satisfaction Survey'' prioritized the top
reasons cited by physicians for dissatisfaction with continued service:
--Insufficient Monetary Compensation.
--Inadequate Administrative and Technical Support.
--Devaluation of Clinical Excellence.
--Poor Business Practices.
--Decreasing Professional Growth Opportunities/Career Issues.
--Lack of Recognition and Value of Physician Contributions.
For the Dental Corps, the Health Professions Scholarship Program
(HPSP) has been the single most useful tool for attracting dentists to
the Navy. We consistently have 3 times as many applicants as we have
scholarships to award. Unfortunately, the dental 4-year HPSP
scholarship has been in existence for a short period of time and only
accounts for approximately 60 percent of our new accessions each year.
In contrast, the Medical Corps attracts over 90 percent of new
accessions with the HPSP scholarship. Because of this, a significant
percentage of our corps is still burdened with the staggering debt
accumulated during dental school (average debt > $80,000). To retain
these experienced, well-qualified dental officers, we will need to
dramatically increase both military pay and benefits. The pay disparity
between military and civilian dentists continues to grow as an on-going
study by the Center for Naval Analysis has demonstrated. Their findings
indicate a ``pay gap'' ranging from 24 percent to over 70 percent
depending on time in practice/service and whether or not the individual
is a general dentist or a specialist. When junior officers were queried
as to the amount of pay increase it would take to make them ``likely to
remain on active duty'' the dollar amount exceeded $12,000 annually.
For the Nurse Corps, compensation is one factor and a powerful
driver in a nurse's decision to enter or remain in the service. Other
significant factors include teamwork, opportunities for advanced
education, promotion and quality of life issues, including child care,
housing, benefits, and workload.
In the Medical Service Corps, scholarship options, training
opportunities and the type of work experience and diversity we offer
are key issues in both attracting and retaining providers. While these
factors attract high caliber professionals to the Navy, maintaining
adequate pay comparability is critical to both recruitment and
retention.
Civilian TRICARE Network Providers
In reference to TRICARE network providers, the three major
ingredients have been and continue to be: (1) adequate reimbursement
rates; (2) prompt payment of claims; and (3) a reduction in the
administrative requirements. The TRICARE Management Activity along with
staff from each of the Surgeons General offices have made great strides
over the past year in improving prompt payment and reducing
administrative problems. Through these combined efforts, claims
deferrals have declined, over 100 pre-pay edits have been eliminated,
the number of claims adjustments have been reduced, and auto-
adjudication rates have increased. Along with TMA, Navy Medicine is
continuing to look at additional ways of improving service to our
TRICARE network providers. Future improvements aim toward increasing
the ability to use Electronic Media Claims, In Office Adjudication
processing which would provide instant feedback to the provider and a
number of internet applications for Claims Customer Service such as the
one used by Palmetto Government Benefit Administrators (myTRICARE.com)
and claim submissions. There may always be a few areas of the country
where the CMACs will be considered insufficient. There are criteria for
requesting waivers to CMAC rates where there is severe impairment of
access to health care as a result of our CMAC payment rates. However,
we continually monitor physician participation rates, and the latest
report indicates a 96 percent rate. That is, on 96 percent of TRICARE
claims filed, there is no balance billing to the beneficiaries.

TRICARE FOR LIFE

Question. I can tell you that the TRICARE For Life is a most
welcomed program for those retirees that we made the promise to so many
years ago. The 2001 National Defense Authorization Act, calls for the
implementation of the pharmacy benefit on 1 April 2001 and the TRICARE
For Life implementation 1 October 2001. A concern that I have is the
number of military retirees who never enrolled in Part B of Medicare.
This is a requirement of the new plan. An estimated 10 percent of
eligible military retirees in San Antonio never enrolled in Part B of
Medicare. Medicare eligible retirees who turned down enrollment in Part
B face a 10 percent penalty on monthly premiums for every year they are
past age 65 when they enroll. For a 75 year old that would be $91 a
month, twice as much as someone who enrolled at age 65.
Can you comment on your meetings with HCFA on identifying those who
did not enroll in B and what solution is needed to waive this penalty?
Answer. My staff has participated in several meetings, led by
Health Affairs (TRICARE Management Activity) staff, with HCFA staff. It
is anticipated that Department of Defense (DOD) will be conducting a
data match with HCFA this summer that will identify those persons
eligible for TRICARE for Life (who must have Medicare Part B). This
data match will also provide a list of those military retirees and
family members that do not have part B, thus would not be eligible for
TRICARE for Life. In reviewing the testimony provided by both DOD and
HCFA, we understand that a legislative action would be required to
waive the penalties associated with a group of beneficiaries not
choosing Medicare Part B when they turned 65 and wanting to purchase it
at a later date. I would support a legislative waiver, because it would
facilitate our ability to provide the full benefit this group deserves.
Question. What marketing plan is planned to educate the over 65
retirees about TRICARE for Life?
Answer. TRICARE Management Activity in conjunction with the
military services has created a detailed marketing and communication
plan. The plan uses news releases, web services, marketing materials,
and letters and education briefings. Our facilities have access to this
information and we have incorporated the briefings into our internal
and external communications. TRICARE Management Activity is utilizing
all avenues to ``get the word out about the TRICARE For Life program''
Examples include their weekly meetings with the Military coalition, the
mailing of 1.5 million copies of the Senior Pharmacy information
trifold and an informative web site that posts frequently asked
questions and additional information. The Navy is augmenting this plan
with close collaboration among Bureau of Medicine and Surgery, Bureau
of Naval Personnel, the Deputy Chief of Staff for Manpower and Reserve
Affairs, and Headquarters Marine Corps.
Question. Can you comment on how the implementation of TRICARE for
Life will impact your resources? (Physician contacts per year average
12 per year in those over 65 as compared to 4.6 per year in ages 15-
44.) Days of Hospital Care per year average 269 days of care per one
thousand persons in those over 65 as compared to 54.6 per one thousand
persons in ages 15-44.)
Answer. We recognize that the 65+ beneficiary population consumes
significantly more resources than beneficiaries in other age groups. We
welcome the opportunity to provide additional care to these
beneficiaries, but we have limited remaining capacity in our military
treatment facilities (MTF). Our number one priority is the health and
well being of our active duty service members to ensure the operational
forces are ready to deploy and that our medical personnel maintain the
skills necessary to support the operational forces. Our plan is to
provide as much care to 65+ beneficiaries as we can in the MTFs while
balancing our workload to meet readiness and graduate medical education
requirements, and our commitment to our active duty families and other
retirees and their families. We will also rely heavily on available
private sector care, where Medicare is first payer and TRICARE will be
the second payer, to provide services not available in our MTFs.
However, the Military Health System's ability to meet the health care
needs of a greater percentage of our beneficiary population is
contingent upon full funding of our current requirements as well as
those new benefits authorized by the Fiscal Year 2001 National Defense
Authorization Act.
Question. Gentlemen, will you be able to meet the goals of TRICARE
for Life and still be able to provide care to the active force based on
your projected budgetary guidelines?
Answer. At this time the Budget has not been submitted. Without
that final product it is difficult to state unequivocally that the
budget does not have adequate funding for TRICARE For Life (TFL). Our
number one priority is the health and welfare of our active duty
service members. We must ensure that the operational forces are
medically ready to deploy, and that our medical personnel maintain the
skills necessary to support the operational forces. Therefore, we must
maintain a balanced workload in our military treatment facilities (MTF)
that meets our needs for readiness as well as graduate medical
education, and our commitment to our active duty families and other
retirees and their families. We welcome the opportunity to provide
additional care to our 65+ population, but we have limited remaining
capacity in our military treatment facilities (MTF). Our MTFs cannot
provide all needed services for the over 1 million 65+ beneficiaries
eligible for TRICARE for Life. We are confident that the right
combination of available MTF care coupled with private sector care
(where MEDICARE is first payer and TRICARE second) will not only meet
the needs of this population, but of Navy Medicine's commitment to
readiness. However, the Military Health System's ability to meet the
health care needs of our entire beneficiary population, including those
65+, remains contingent upon full funding of our current requirements
as well as those new benefits authorized by the Fiscal Year 2001
National Defense Authorization Act.

MEDICAL PERSONNEL

Question. Are you able to recruit the professionals you need to
meet medical personnel requirements (Active and Reserve Components)?
(All three services identify recruiting and retention of nurses as an
important shortfall).
Answer. Beginning in fiscal year 2003, the Navy Medical Corps will
have a manning shortfall. It is projected to worsen through fiscal year
2007 when overall retention of specialists is projected to drop below
90 percent. Virtually all specialties will be affected, but critical
wartime specialties will be most affected, i.e., general surgery and
surgical subspecialties, orthopedic surgery, anesthesiology, urology
and diagnostic radiology. These are the specialties where the gap
between military and civilian pay is highest.
The Navy Medical Corps is critically dependent on scholarship
programs. 94 percent of Navy physicians are products of the Uniformed
Services University (12.8 percent), the Armed Forces Health Professions
Scholarship Program (AFHPSP) (77.4 percent) and the Financial
Assistance Program (FAP) (3.7 percent). Funding for AFHPSP and FAP
appears to be falling behind rising costs. Fiscal year 2001 recruiting
goals for AFHPSP (320) and FAP (51) required to meet future
requirements are being revised downward because of funding limitations.
From the late 80's until about 2 years ago, the Navy Dental Corps
was consistently unable to meet end-strength. Recently, due in large
part to the successful use of scholarships, we have been able to meet
our recruiting goals for general dentists. Because of the low monetary
compensation, however, we have been unable to attract specialists to
the military. Additionally, future demographic trends indicate that we
will be competing with civilian opportunities for a decreasing pool of
applicants.
For the Nurse Corps, we are not able to recruit all the
professionals we need. Although we meet our recruiting goals in terms
of numbers, we are not able to recruit specialty nurses in the areas of
perioperative, maternal-infant, critical care and nurse anesthetists.
Therefore we must train to these requirements once the nurses join the
Navy.
In the Medical Service Corps, we have good success recruiting to
our scholarship and internship opportunities. However, we offer no such
incentives for over half our new officer positions and in those cases,
recruiting success varies tremendously between specialties. The
optometry community has not met recruiting goals for over ten years.
Other licensed clinical professionals such as pharmacists, and
psychologists have traditionally also been difficult to recruit and
retain but we are having some recruiting success with current
scholarship and training incentives for these communities. Although we
historically have success in most of our specialties, right now we are
on target for this year's recruiting goals in only half our
specialties. The Medical Service Corps Reserve Components are currently
well manned and anticipating no shortages.
Navy Medicine's enlisted member's retention statistics compared to
Navy Line communities are slightly higher. The HM and DT communities
have been above U.S. Navy percentages in first, second and third term
retention rates.
Current retention rates: 1st term HM/DT 52 percent--Line Navy 36
percent; 2nd term HM/DT 51 percent--Line Navy 49 percent; and 3rd term
HM /DT 52 percent--Line Navy 48 percent.
Reserve Components
Based on overall manning levels versus funded reserve requirements,
the Medical, Dental and Medical Service Corps are accessing members at
a level sufficient to meet wartime requirements. However, the Nurse
Corps is currently manned below requirements. Reserve nurse shortfalls
are predominately in the critical care areas. The Naval Reserve offers
incentive programs to nurses with critical care experience.
In addition, both the Medical Corps and Nurse Corps are
experiencing attrition that exceeds accessions rates. An in depth
assessment of the four officers corps shows there is a need to improve
recruiting at the specialty level to meet skills requirements. The most
crucial area is the Hospital Corpsman rating. Current reserve inventory
is 62 percent of total requirements with an attrition rate that has
exceeded accessions for the past several years. The reserve Dental
Technician Rating is meeting reserve-recruiting requirements and is
manned at 100 percent.
Question. Are medical professionals able to sustain their clinical
skills at a high level? (We have funded the Joint Trauma Training
Center at Ben Taub, which is a Tri-service program).
Answer. Peacetime case mix for general surgeons does not provide
adequate experience with combat trauma injuries. The Joint Trauma
Training Center (JTTC) at Ben Taub provides one option for augmenting
the peacetime clinical experience for trauma surgeons. The training
received has favorably impressed the Navy trauma training coordinator,
but one center alone cannot support trauma training for all DOD general
surgeons. There is a planned opening of a second center at Los Angeles
County Medical Center in 2002, and the Air Force is planning on opening
2 additional centers. Four centers will hopefully provide sufficient
training throughput. In addition, training only surgeons in a JTCC/Ben
Taub program does not provide combat trauma training for the entire
trauma surgical team. Broadening the program scope to train trauma
teams is a reasonable next step for project demonstration.
Peacetime caseload supports skill maintenance for most other
specialties. Maintenance of medical licenses and credentials is
becoming increasingly tied to Continuing Medical Education (CME). The
Center for Naval Analysis (CNA) report ``Physician Satisfaction
Survey'' listed decreasing professional growth opportunities as one of
the top reasons cited by physicians for dissatisfaction with continued
service. Licensure is considered a ``requirement for employment,'' and
licensure fees are excluded from reimbursement under U.S.C. The
services can and do reimburse costs for board certification, an
important credentials item. Most board certificates are now time
limited, and renewal requires some combination of re-examination and/or
CME. The Navy funds one CME course per year as resources permit. Many
mid-level and senior physicians have credentials and board
certifications in multiple areas, and their positions require
continuously maintaining all credentials and board certifications. The
fiscal strain on military health care funding has reduced funding
available for CME, resulting in significant constraints on CME
opportunities. Civilian health care organizations use CME funding as a
competitive recruiting tool. Expanding and fencing funding support for
CME may be a cost-effective option to help medical professionals
maintain clinical skills, update credentials and improve retention.
For Dental Corps, our general dentists have no problems maintaining
their clinical skills. Some specialists--for example, Oral and
Maxillofacial Surgeons--who are assigned to some operational platforms,
such as aircraft carriers, do experience degradation of their clinical
skill levels.
For Nurse Corps, skill sustainment, particularly for wartime roles,
is highly dependent on the ability to use the skills in daily patient
care delivery. Nurses at the medium to large Navy treatment facilities
develop and maintain skills at a high level. Nurses rotate through the
larger facilities on a periodic basis, which serves as skill refresher
training. Some treatment facilities with lower workload and acuity
levels send nurses to the civilian sector for skill maintenance, if
there is no military facility nearby for that purpose.
Medical Service Corps Officers and Navy Medicine Enlisted members
are able to maintain their operational and technical skills while
performing their daily duties.
For the reserve components--The vast majority of Medical and Dental
Corps reservists are practicing their specialty in the civilian
community on a daily basis and as a rule are very competent. The
Medical Service Corps and Nurse Corps is a mixture of practicing
professionals and those who must supplement skills maintenance via
reserve weekend drills and annual training. Skills are monitored by the
Centralized Credentials Review and Privileging Department (CCPD) based
on the standards of the Joint Commission on Accreditation of Health
Care Organization (JCAHO). Those not able to sustain competence are no
longer privileged to practice as a member of the Naval Reserve.
Sustainment of clinical skills for reserve Hospital Corpsmen and Dental
Technicians is a recognized issue that is currently being addressed.
Efforts are underway to enhance training in coordination with Hospital
Corps School and CNET. Recruiting policies are being reviewed to
enhance the ability to access more clinically active individuals who
possess required technical skills.
Question. Does the current medical structure meet military
readiness and force projection requirements?
Answer. In terms of total numbers of personnel, Navy Medicine can
meet military readiness and force projection requirements, however Navy
Medicine does not have the proper mix of specialties. Medical officer
deficits exist in Internal Medicine, Orthopedics, and Surgical sub-
specialties where General Medical Officers serve as substitutes. Other
officer shortages exist in anesthesiology (anesthesiologists and nurse
anesthetists) and perioperative nurses. Enlisted personnel have
shortages in aviation physiology technicians and reconnaissance
independent duty corpsmen.
Question. What have been the military medical requirements for the
Balkans, Southwest Asia, and other deployments?
Answer. The following list depicts the deployments (greater than 30
days) of Navy Medicine assets. This list does not include organic
assets forward deployed with Carrier Battle Groups, Amphibious Ready
Groups, long-term (permanent change of station) assignments to shore
facilities worldwide, or exercises (less than thirty days and are part
of the normal training cycle).
Task Force Medical Falcon in support of Kosovo Forces: 1 Nurse
Anesthetist.
Medical Crisis Support Team--Bahrain: 1 General Surgeon, 1
Orthopedic Surgeon, 1 Anesthesiologist, 1 Operating Room Nurse, 1
Surgical Technician.
Kuwait Army Hospital (rotate with Army and Air Force): 1 General
Surgeon, 1 Orthopedic Surgeon, 1 Anesthesiologist, 1 Operating Room
Nurse, 1 Surgical Technician.
Provide Hope--Tblisi, Georgia (train local personnel on use of
medical equipment donated by the U.S.): 1 Family Practice Physician, 1
Primary Care Physician, 1 Operating Room Nurse, 1 Surgical Technician,
6 Biomedical Repair Technicians, 7 General Duty Corpsmen.
Question. What is the impact?
Answer. There was minimal impact of these deployments on patient
access to care in the Medical Treatment Facilities (MTF). Drawing
resources from several different Navy MTFs for these deployments
reduces the impact on any one Navy MTF. However, some workload does
shift from the Navy MTFs to the more expensive civilian network while
military providers are deployed.

THIRD PARTY COLLECTIONS

Question. How does the third party collection system currently work
with the Military Medical Treatment Facilities?
Answer. The Third Party Collection Program (TPCP) is statutorily
enabled to bill health insurers and health benefit plans for medical
care provided to family members of active duty personnel, retirees, and
retiree family members. The TPCP does not cover active duty members.
Claims are prepared based on the diagnostic related group (DRG) coded
in the patient's record for inpatient care, much the same as in a non-
government hospital. For outpatient services, a claim is prepared based
on the clinic that the patient visited in the Medical Treatment
Facilities (MTFs). All Department of Defense MTFs use this methodology.
The MTF Billing Office sends the claim to the health benefit plan and
reimbursement is subject to the terms of the plan purchased by the
patient. When the MTF receives payment, funds are deposited to the
current year operating account of the MTF.
Question. What is the impact on Medical Treatment Facilities of
providing the medical services and collecting for those services (for
example at Wilford Hall and Brook Army Medical Center in San Antonio)?
Answer. Because Wilford Hall and Brook Army Medical Centers are not
Navy Medical Treatment Facilities (MTFs) we cannot comment on their
Third Party Collection Program (TPCP) operations. However, within Navy
Medicine, the TPCP does have a significant impact on the funding
available to the MTF. Total Navy billings for fiscal year 2000 were
approximately $67 million while at the same time collections for fiscal
year 2000 were $24.9 million. These third party collections are
equivalent to approximately 2 percent of the MTF operating budgets. At
the MTF level funds are used to directly supplement the operating
budget of MTFs and Clinics.
Question. Is the money returned to the Medical Treatment Facilities
that provided the services?
Answer. The Bureau of Medicine and Surgery monitors billings and
collections by MTFs. Collections under the TPCP that are realized at
the MTF remain at the MTF. The fact that funding is left at the MTF
level and does not become a ``corporate level'' asset incentivizes the
MTFs to pursue collections to the greatest legal extent possible from
the local level.

CIVILIAN HEALTH PERSONNEL RECRUITMENT

Question. In your testimony today you have noted problems
maintaining enough physicians in the military, are there specific
issues or obstacles you face in reference to hiring civilian
physicians?
Answer. Yes. Hiring civilian physicians to cover shortfalls in
military physicians presents a two-sided problem.
(1) Based on Hay Group compensation data for salaried physicians
employed by group practices, HMOs and hospital-based practices, the
average annual compensation for comparable civilian physicians would be
$268,000. This is $86,000 more than the average total annual
compensation for uniformed physicians (CNA Report ``Comparison of Navy
and Private-Sector Physicians' Total Compensation By Medical
Specialty.'')
Outsourcing works when excess, lower cost labor is available and
fixed-cost infrastructure can be reduced or eliminated. Unfortunately,
in most markets, civilian physicians are a labor pool that is not in
excess and commands higher salaries. Infrastructure must be maintained,
allowing no opportunity to reduced infrastructure or fixed costs.
(2) Hiring civilian physicians increases dissatisfaction among
military physicians. In many cases, contract civilian physicians are
exempted from after-hours call and weekends watches. Civilian
physicians have none of the military responsibilities or ancillary
duties of the military physicians, and are not liable for deployment.
The military physicians discern that they are paid substantially less
for greater workload and responsibility.
Question. Are there similar problems hiring enough support staff
for physicians?
Answer. Similar issues are probably germane for support staff. The
Bureau of Medicine and Surgery (BUMED) recently completed a staffing
analysis addressing clinical support staff assigned to each Primary
Care Provider (PCP). BUMED has determined that each PCP has 1.9
clinical support staff available. It is BUMED's goal to increase this
ratio to the civilian levels of 3.5 support staff per provider. This
goal is also necessary to support DOD's Military Health Systems (MHSs)
Optimization Plan, which will recapture workload from contractors.
______

Questions Submitted by Senator Ernest F. Hollings

Question. Under Congressionally Directed Medical Programs, is there
on-going research targeted on blood-related diseases such as leukemia
or lymphoma? Is blood-related disease research to be consistent with
the mission of DOD medical research?
Answer. Congressionally Directed Medical Programs are managed by
the U.S. Army Medical Research and Materiel Command. Therefore, Navy
defers to Army for this response.
While not specifically under the Congressionally Directed Medical
Programs, Navy is involved in a study under the Congressionally
Mandated DOD Coastal Cancer Control Program. This is a collaborative
study between the Naval Health Research Center and the Hollings Cancer
Center, Medical University of South Carolina. This study will determine
the rate of leukemia in active-duty military personnel and compare this
rate with rates for the general U.S. population. Risk of leukemia by
occupation within the DOD will also be studied.
Cancer studies and studies of other blood-related diseases in
active-duty personnel are consistent with the mission of DOD medical
research to help ensure a fit and healthy force.
Question. Has any work been done to identify the occurrence rate or
prevalence of blood-related diseases resulting from environmental
exposure in the theater of war?
Answer. Three research efforts by Navy Research Health Center
workers have addressed blood-related diseases in veterans of the Gulf
War. These articles address numerous disease categories, including
``neoplasms'' and ``blood diseases''. Articles in the peer-reviewed
literature resulting from these studies include:
--Gray GC, Smith TC, Knoke JD, Heller JM. The postwar hospitalization
experience of Gulf War veterans possibly exposed to chemical
munitions destruction at Khamisiyah, Iraq. American Journal of
Epidemiology, 1999, Volume 150, pages 532-540.
--Gray GC, Smith TC, Kang HK, Knoke JD. Are Gulf War veterans
suffering war-related illnesses? Federal and civilian
hospitalizations examined, June 1991 to December 1994. American
Journal of Epidemiology, 2000, Volume 150, pages 63-71.
--Gray GC, Coate BD, Anderson CM, Kang HK, Berg SW, Wignall FS, Knoke
JD, Barrett-Connor E. The postwar hospitalization experience of
U.S. veterans of the Persian Gulf War. New England Journal of
Medicine, 1996, Volume 335, pages 1505-1513.
The first-listed study addresses possible exposure to chemical
munitions destruction, which is a form of ``environmental exposure''.
In these studies, a link between deployment to the Persian Gulf and
later development of ``neoplasms'' and ``blood diseases'' was not
established.
Question. The National Academy of Sciences and the Institute of
Medicine issued a report in January which made recommendations to the
Department of Defense about improving the health of soldiers deployed
to the theater of war. The Institute's recommendations are compelling
and, if implemented, would make a strong commitment to the health of
American troops. Are you familiar with the Committee's recommendations?
Do any of the individual services, or the Department of Defense, have
implementation plans for the any of the Committee's recommendations? If
not, why not?
Answer. Navy Medicine considers protecting the health of deployed
personnel to be a high priority. Navy is working with the other
Services, through the Joint Preventive Medicine Policy Group, to
complete work on the Joint Service Instruction on Deployment Health
Surveillance and Protection. This document will provide Service
implementation policy for Department of Defense Instruction 6490.3,
Implementation and Application of Joint Medical Surveillance for
Deployments, and will address many of the concerns of the Institute of
Medicine Report. It is anticipated that the draft instruction will be
ready for final coordination by June 1, 2001.
Navy Environmental Health Center has published Technical Manual
NEHC-TM PM 6490.1 (September 2000), titled Implementing Guidance for
Deployment Health Surveillance. While this document is non-directive,
it serves as interim guidance pending release of the Joint Service
Instruction on Deployment Health Surveillance and Protection.
Navy is developing four Forward Deployable Preventive Medicine
Units to provide specialized field capabilities in Epidemiology, Health
Surveillance, Preventive and Occupational Medicine, Risk Communication,
Environmental Health, Vector Control, Microbiology, and Industrial
Hygiene (including environmental sampling). These Units will be rapidly
deployable and mission specific (task-organized), so operational
commanders will have a tailored functional unit available in the
theater of operation. FD-PMUs are expected to come on line during
fiscal year 2002 through 2005, and will make significant contributions
to many of the recommendations in the Institute of Medicine Report.
Question. Vice Admiral Nelson, in the testimony you provided to the
Committee you stated that the Navy is committed to optimizing the
health care services it provides. You mentioned the Navy completed an
analysis of its direct care system and found that many of the Treatment
facilities were not optimally staffed or were not functioning at
optimal levels. Is the Charleston Naval Hospital functioning at an
optimal level? If not, will you comment on the challenges facing the
Charleston Naval Hospital in providing services to the Charleston
metropolitan area? How will the changes to the TRICARE system affect
services being provided at Charleston Naval Hospital?
Answer. Over the last 3 years Charleston Naval Hospital has been
one of the Navy's leaders in re-engineering for optimization. With the
help of Palmetto Government Benefits Administrators (PGBA) we formed a
model partnership with the Trident Hospital System for inpatient
services. We seamlessly integrated the over 4,000 Navy Nuclear Power
Training Command personnel into receiving health care services as that
Command moved from Orlando, FL to Charleston. We increased access and
beneficiary satisfaction through the implementation of a new
appointment and scheduling system. The hospital has earned both the DOD
access award, as judged by responses of beneficiaries and the Federal
Executive Association's Team Award.
Changes to the TRICARE system will require some adjustments of the
services that are currently delivered to the over 65 population in the
Charleston area but the impact should be minimal. In fact, there have
historically been 1,500 to 2,000 over 65 beneficiaries empanelled at
Charleston. Most of these beneficiaries were patients during the time
the Family Practice training program was open. The hospital has
continued to provide this population with primary care and outpatient
specialty services. Naval Hospital Charleston will continue to do so.
TRICARE for Life provides our very important beneficiaries with an
excellent benefit for which Naval Hospital Charleston will do their
part.
The current facility was constructed in 1973 and is configured as a
general hospital for a population far in excess of the current
beneficiary population in Charleston. A new ambulatory care ``super-
clinic'' if constructed at the Naval Weapons Station, Charleston, in
proximity to the Navy Nuclear Power Training Command, would optimize
outpatient care delivery to our current beneficiaries.
______

Questions Submitted to Lt. Gen. Paul K. Carlton

Questions Submitted by Senator Ted Stevens

FISCAL YEAR 2000 SUPPLEMENTAL

Question. How much relief has your direct care system received from
the fiscal year 2000 Emergency Supplemental?
Answer. The fiscal year 2000 Emergency Supplemental provided funds
for several different years, though most went against fiscal year 2000-
2001 requirements. The Air Force Medical Service (AFMS) received $37.8
million of the $148.1 million, which was used to fund fiscal year 2000
direct care requirements. None of the supplemental was used to fund
fiscal year 2001 direct care requirements.
Question. What happens when your MTFs are the first to pay the
bills, or the last to receive any funding relief?
Answer. There is absolutely no flex in today's funding levels.
Every dollar intended for the direct care system that is directed
elsewhere comes at the expense of our facilities' infrastructure,
medical equipment, and supplies necessary to provide direct patient
care.
CURRENT YEAR DHP FUNDING SHORTFALLS

Question. Do you have enough funds to fully execute your fiscal
year 2001 program? Where are your shortfalls?
Answer. The Defense Health Program (DHP) is experiencing a $1.4
billion shortfall. The AFMS' share is $158 million. These shortfalls do
not include $72.5 million in unfunded fact-of-life requirements such as
pharmacy growth, skyrocketing fuel costs, and Air Evac overruns based
both on fuel costs and increased flying hour costs. Another $37 million
was recently advanced from our 4th quarter funding line to pay for
requirements driven by the Fiscal Year 2001 National Defense
Authorization Act. We are concerned about these shortfalls and are
working with our line and department leadership to resolve them.
Current funding levels will lead to a significant impact on direct care
services in early July 2001. If we are not able to continue current
levels of service, patients will be referred to the civilian sector, at
a higher cost to the government. We will potentially see this pattern
reflected in higher private sector care bills in the out-years.
Question. Is your direct care system fully funded in fiscal year
2001? How will your fiscal year 2001 shortfalls impact delivery of care
in your hospitals and clinics?
Answer. The DHP is experiencing a $1.4 billion shortfall. The AFMS'
share is $158 million. These shortfalls do not include $72.5 million in
unfunded fact-of-life requirements such as pharmacy growth,
skyrocketing fuel costs, and Air Evac overruns based both on fuel costs
and increased flying hour costs. Another $37 million was recently
advanced from our 4th quarter funding line to pay for requirements
driven by the Fiscal Year 2001 National Defense Authorization Act. We
are concerned about these shortfalls and are working with our line and
department leadership to resolve them. Current funding levels will lead
to a significant impact on direct care services in early July 2001. If
we are not able to continue current levels of service, patients will be
referred to the civilian sector, at a higher cost to the government. We
will potentially see this pattern reflected in higher private sector
care bills in the out-years.

TRICARE FOR LIFE

Question. To arrive at a cost for ``Tricare for Life'', has DOD
used accurate assumptions for medical and pharmacy inflation rates?
Answer. Per the TRICARE Management Activity (TMA), DOD calculated
the TFL cost estimates for fiscal year 2002 based on the most current
inflation rates available. These rates are consistent with the recent
Congressional Budget Office (CBO) testimony before the Committee on
Ways and Means, Subcommittee on Health, on March 27, 2001. The
Department assumed a 15 percent total cost growth for pharmacy between
fiscal year 2001 and fiscal year 2002 (approximately 10 percent
inflation and 4.5 percent increased utilization). DOD assumed a 4
percent cost growth for TRICARE benefits not covered by Medicare and as
second payer to Medicare (beneficiary coinsurance and deductible).
Question. On October 1st where do you believe retirees will go for
their new benefit to the MTF or in the network?
Answer. TRICARE For Life is an exciting step towards restoring the
promise made to these great American patriots by opening the doors of
our military treatment facilities (MTFs) and welcoming them back into
the military family.
Approximately 40 percent of all Medicare-eligible military retirees
and their families do not live near an MTF and will initially utilize
providers who accept assignment from Medicare, with TRICARE as the
second payer. The Air Force is working closely with the TRICARE
Management Activity (TMA) to partner with the Health Care Financing
Administration (HCFA) to expand options for these men and women,
including forming Employee Health Benefit Plans.
There are approximately 377,000 Medicare-eligible beneficiaries who
live near an AF MTF. A survey performed by the TRICARE Management
Activity (TMA) in January, 2001 confirmed that those who currently use
an MTF for at least some of their medical care are likely to continue
to do so. At this time, we are unable to reliably predict what level of
care they will expect to receive at an MTF, versus from a civilian
provider who accepts assignment from Medicare. At a recent pilot
program for Medicare-eligible beneficiaries in Florida, approximately
30 percent of those who lived near the MTF asked to enroll in the
program. As faithful stewards of our taxpayers' dollars, I firmly
believe that we must provide as much of their care as possible within
our MTFs. I also clearly recognize that if we cannot provide service
that meets their expectations, they will seek care in the community at
significantly greater cost to the government. We have one opportunity
to succeed; failure to accurately resource our healthcare system to
provide this level of care will ultimately drive higher costs through
Medicare and a less robust and ready military healthcare system.
Continued underfunding of the direct care system at the expense of our
managed care support contracts threatens not only our ability to
provide comprehensive care for the men and women affected by this new
benefit, but also for current TRICARE beneficiaries.
In those areas with large, integrated MTFs, we would like to offer
beneficiaries a TRICARE Senior Prime-like option after further
negotiations with HCFA. At medium-sized Air Force facilities, we are
working to deploy a program similar to the demonstration program at
MacDill AFB that has been so well received by beneficiaries in that
area. Some of the smallest MTFs do not have the staff or resources to
meet the healthcare needs of our older retirees, and we anticipate
partnering closely with HCFA to ensure that these men and women receive
the care they need with TRICARE as the second payer.
Question. If the retirees go to your MTFs, is your system ready and
funded for the new workload?
Answer. Air Force military treatment facilities (MTFs) are eager to
welcome these great American patriots back to the military family. The
men and women of the Air Force Medical Service are working hard to
provide high-quality, cost effective care to as many beneficiaries as
possible with the resources currently available.
We will need full funding of our current requirements, as well as
resources to provide additional care. No MTF currently has sufficient
resources to provide all necessary care for all Medicare-eligible
beneficiaries who live near the MTF. Because the accrual fund will not
provide any funding in fiscal year 2002, we are carefully considering
options to fund care for Medicare-eligible beneficiaries, while
maintaining our commitment to provide excellent healthcare to our
fighting force and our current TRICARE Prime beneficiaries. The impact
of the recent global settlement on the direct care system's ability to
continue even its current level of effort over the next 6 months is
unclear. As previously stated, we estimate that the annual costs of
implementing these new benefits will range from $4.1 billion in the
first year to $6 billion per year in later years. No amount of
increased efficiency in our system will allow us to reallocate
sufficient resources to meet this challenge.

FULL FUNDING OF THE DEFENSE HEALTH PROGRAM (DHP)

Question. Is your DHP funding stable and predictable? If not, how
does that instability impact your healthcare system?
Answer. Yes, our funding levels are relatively stable and are
projected out over the future years defense plan (FYDP). These
projected levels, though greatly improved after OUSD(C) input, still do
not adequately address the medical inflation issue, especially
regarding pharmaceutical cost increases. Additionally, the direct care
portion is at risk due to cost increases in the MILPERS account and
private sector care. Given the extremely tight budgets, we have no
ability to handle execution-year changes (such as we have seen this
year with skyrocketing fuel prices and increasing pharmaceutical
growth) within existing funds. So, although the funding is stable and
predictable, it continues to be inadequate.
Question. Has the DHP budget accurately forecast ``cost savings''
and ``efficiencies?'' Have these savings materialized? Have you had a
loss in buying power over the years?
Answer. The Air Force Medical Service (AFMS) feels we have
accurately predicted cost savings and efficiencies for those programs
we are able to control and to which we have had input (for example, our
fiscal year 2000 initiative regarding Medical Center optimization).
Projected cost savings and efficiency programs that are levied upon us
are often less realistic. In my opinion, little to no savings have been
realized by these levied programs (for example, the savings that was
supposed to be saved by consolidating the Lead Agents--the
consolidation never occurred; however, projected savings were
subtracted from the budget). The Office of the Undersecretary of
Defense Comptroller, OUSD(C) has assisted, with some limited success,
in regaining these dollars.
The ``buying power'' is fairly difficult to answer quantitatively,
due to medical benefit changes, population changes, and restructuring/
rightsizing in the AFMS. However, looking at the Consumer Price Index
for ``U.S. City Average, Medical care, All Urban Consumers,'' we see
that medical inflation since 1992 has been 137 percent. Based on our
actual fiscal year 2000 funding, the AFMS has approximately 27 percent
less buying power today than we did in 1992. We estimate that our
actual delta between dollars received (in fiscal year 2000) and dollars
required, per this index, is about 7.35 percent, or $239 million.

VENTURE CAPITAL FOR THE DIRECT CARE SYSTEM

Question. Please tell us about your plans to make your hospitals
and clinics more productive.
Answer. The Air Force Medical Service (AFMS) has been a leader
among the Services in its efforts to make Military Treatment Facilities
(MTFs) the most efficient operations possible. One example is the
Primary Care Optimization (PCO) initiative in which the AFMS is already
experiencing some very encouraging results. PCO maximizes a provider's
ability to care for patients by providing appropriate support staff,
facilities, equipment and systems.
Re-capitalization of our infrastructure and equipment has suffered
the last several years as a result of inadequate and/or suppressed
funding. Our re-capitalization plan attempts to restore our Real
Property Maintenance (RPM) and equipment accounts so we may continue to
provide quality health care with state-of-the-art equipment in a
functional and safe environment. Additional funding for RPM, military
construction (MILCON), Information Management/Information technology,
and medical investment/expense equipment would need to be phased in
over several years. For example, the lead-time for MILCON is such that
the first wave of re-capitalization funds will not be needed until
fiscal year 2005.
Question. Do funding constraints keep you from optimizing your
system? Would a ``venture capital'' fund, or a ``Surgeon General's
Investment and Initiative Fund'' allow you to operate your system more
smartly and at less expense?
Answer. Funding constraints limit our optimization efforts. When we
are forced to function year to year (rather like living paycheck to
paycheck), we are unable to optimally plan out-year facility
maintenance and upgrade projects, medical equipment buys, adaptations
to changes in medical care delivery, etc. Sometimes we do not make the
most effective use of our funds, specifically, when funds come all at
once at the end of the year. In such situations, funds go toward valid
projects of opportunity that are not our highest priorities because our
highest priorities have phasing and milestones that prevent their
execution by the end of the fiscal year. Additionally, the project
tends to cost more than if we had been able to properly plan for/spend
those dollars.
A venture capital fund needs to be considered. Such a fund should
provide near term flexibility for unexpected requirements in the
budget/execution year and innovative projects where a positive return
has been determined.
Question. If such a fund were established, please explain how the
``best business case'' approach would be used to identify, select and
fund projects.
Answer. All proposed ``draws'' on the fund require a business case
analysis. A tri-service process and forum, consistent with current
processes/forums, could be easily adapted to accommodate venture
capital projects. It's imperative that approval of fund withdrawals be
a joint decision, i.e., no single Service or agency has the authority
to approve ``takes'' from the fund.

ORGANIZATIONAL REFORM

Question. Would the creation of a ``Joint Medical Command'' or a
``USMEDCOM'' remedy some of the problems experienced with DOD medical
programs?
Answer. Reorganization for the sake of reorganization is not a
solution. It is not clear to me how an organizational change to the
Military Health System will solve the current fiscal crisis or
necessarily be more efficient. The current fiscal problems we have are
a result of four factors: poor financial modeling, unrealistic
inflation estimates, run away contract costs, and changes to the
benefit.
I am concerned that a USMEDCOM is being looked at solely as the
mechanism to manage cost as opposed to managing the proper balance
between benefit and readiness. We need to strike the right balance of
interdependency between benefit and readiness in light of each
service's unique culture and doctrine, otherwise, we will dilute
readiness.
While we don't believe a USMEDCOM will solve our funding problems,
we do need centralized management of the Military Healthcare System
with a focus on business aspects and readiness. This could be
accomplished by minor realignment of responsibilities and putting more
bite into components of the current structure such as the Defense
Medical Oversight Committee (DMOC). Establishing a direct link from the
DMOC to the Secretary of Defense (SECDEF) and Joint Chiefs of Staff
(JCS), which does not exist in the current construct, would serve to
facilitate the cross service coordination, optimization, and
accountability we need.
Question. Is there clean authority and accountability in the DOD
medical programs today? Would a ``USMEDCOM'' foster better lines of
responsibility for DOD medical programs?
Answer. Accountability for medical costs requires dual efforts. The
Defense Health Program (DHP) is currently highly scrutinized and
examined in great detail at multiple levels. However, true medical
costs to the Department necessitate an examination of the entire
Military Healthcare System (MHS), which includes both DHP costs and
those borne by the Line Components. Examples of these other costs are
line funded programs and line funded manpower (both military and
civilian positions). When examined together, the true costs of medical
support to the government become clearer and more accurate, while
additional opportunities for efficiencies can then be best considered.
While we don't believe a USMEDCOM will solve our funding problems,
we do need centralized management of the Military Healthcare System
with a focus on business aspects and readiness. This could be
accomplished by minor realignment of responsibilities and putting more
bite into components of the current structure such as the Defense
Medical Oversight Committee (DMOC). Establishing a direct link from the
DMOC to the SECDEF and JCS, which does not exist in the current
construct, would serve to facilitate cross service coordination,
optimization, and accountability we need.

RECENT TRICARE SATISFACTION SURVEY

Question. Have there been recent improvements in customer
satisfaction with TRICARE? What remains to be done to further improve
satisfaction with the TRICARE program?
Answer. In 1994, prior to TRICARE, 63 percent of beneficiaries
reported they were satisfied with their access to care. By 1998, that
had increased to 74 percent and in December 2000, to 78 percent. In
those regions where TRICARE has been in place for more than three
years, 83 percent of those surveyed were satisfied with the care they
had received. This compares very favorably with customer satisfaction
data from a recent study of beneficiaries in civilian managed care
plans that reported that on average 79 percent were satisfied with
their plan. Similarly, satisfaction with overall quality of care has
increased from 79 percent to 90 percent. I, and all the leadership of
the Air Force Medical Service, review customer satisfaction data as
part of the Air Force Performance Measurement Tool. At the last TRICARE
conference, I was particularly proud that Air Force facilities won
three of the five awards for customer satisfaction, as well as three of
the five awards for access.
However, there is always room for improvement. We are continuing to
improve access through aggressive, enterprise-wide improvements in our
appointing systems, including web-based appointing, improved telephone
systems, after-hours clinics, and an increased emphasis on preventive,
rather than reactive healthcare delivery. Beneficiaries have been
included in many of the groups developing these initiatives in order to
insure that changes met their needs.

MEDICAL RECRUITING AND RETENTION

Question. How is your service doing in recruiting and retaining
medical professionals?
Answer. The Air Force is definitely having difficulty recruiting
and retaining medical professionals. Accession rates lower compared to
average rates over the last three years. Loss rates are higher compared
to average rates over the last three years. Lower accession rates and
higher loss rates are applicable to most Corps. The bottom-line is that
losses are greater than gains over the last three fiscal years.
The Air Force has found the use of the Health Professions
Scholarship Program extremely effective in recruiting high quality
applicants. However, the challenge occurs trying to retain them past
their year of payback for their education. We believe our difficulty in
retaining providers stems from the pay disparity in some specialties
with the civilian sector, the increased student debt loan, and the
competitive job market for health professionals. Additionally, the work
environment, job satisfaction and assignment location/stability also
may play a part in retention. A Center for Naval Analysis study,
currently in progress, will help to validate the reasons providers
choose to leave military service.
Question. Is the current special and incentive pay structure
adequate to keep your force manned?
Answer. Absolutely not. Special and incentive pays have not changed
in 10 years for the health professions. The recently published Center
for Naval Analyses (CNA) study, Health Professions' Retention-Accession
Incentives Study Report to Congress, February 2001, offered these
findings:
--A pay gap does exist between uniformed and private-sector civilians
for the 24 physician specialties examined.
--A significant uniformed-civilian compensation gap exists between
dentists, optometrists, and clinical psychologists at all
career junctures, ranging from 13-42 percent.
--A 16-percent uniformed-civilian compensation pay gap exists for
pharmacists at entry level, narrows to 9 percent at the mid-
junior junction, and then reaches parity at later career
points.
--Uniformed Certified Registered Nurse Anesthetists (CRNAs)
experience a 10-percent compensation gap with their private-
sector counterparts at the entry level.

Note: The civilian pay comparisons for the CNA study were based on
conservative salary estimates from the private sector.

Question. Where do you have the most difficulty recruiting and
retaining medical professionals? What specialties are most undermanned?
Answer. The Air Force Medical Service has determined the following
as critical specialties, where current personnel are below 90 percent
of requirements:
Physicians: anesthesiologists (76 percent), psychiatrists (83
percent), dermatologists (82 percent), pathologists (83 percent),
radiologists (77 percent), and neurologists (76 percent).
Dentists: endodontists (86 percent), prosthodontists (54 percent),
general dentists (68 percent), periodontists (85 percent), and oral/
maxillofacial surgeons (89 percent).
Biomedical Sciences: pharmacists (80 percent), optometrists (80
percent), dietitians (89 percent), and biomedical engineers (86
percent).
Nurses: nurse anesthetists (90 percent by June 2001).
______

Question Submitted by Senator Richard C. Shelby

ACCESS TO MILITARY HEALTHCARE FACILITIES

Question. Retiree and dependent access to military healthcare in
remote areas has become problematic. I know this is true in a number of
areas, including rural areas of Alabama. I would like to ask each of
the members of panel one to comment on DOD plans to meet the healthcare
needs of military personnel, dependents and veterans living in rural
areas with no local access to military healthcare facilities. What is
the status of demonstration projects that seek to address these
problems?
Answer. The TRICARE Prime Remote (TPR) program, available
throughout the country since 1 October 1999, provides the ``Prime''
benefit to active duty service members who are not stationed near an
MTF. The TRICARE Management Activity (TMA) closely monitors access and
network adequacy for all Prime beneficiaries. As of 30 October 2000,
family members whose active duty sponsor serves in a remote location
were eligible for waiver of cost-shares, deductibles, and co-pays.
Beginning 1 October 2001, these family members will be able to enroll
in TRICARE Prime Remote. Also beginning 1 October 2001, Medicare-
eligible retirees in remote locations will be eligible for TRICARE for
Life as part of the 2001 National Defense Authorization Act (NDAA).
TRICARE then becomes second payer to Medicare, with DOD paying cost-
shares, deductibles, and co-pays for this population.
______

Questions Submitted by Senator Kay Bailey Hutchison

TRICARE BUSINESS PRACTICES

Question. Last year I asked if the amendment that provided for
increased reimbursement levels for TRICARE was adequate, particularly
in areas where our military personnel could not get a provider to see
them. I was told last year that we had seen an improvement by all three
Surgeons General. Additionally, reports from Dr. Clinton's office also
say that providers and patients are happier, but I can tell you though
that is not the information that I am receiving from my constituents to
include patients and providers. Many say they cannot locate a provider
that will accept TRICARE for the very reasons that we talked about
before, inadequate reimbursement, delay in payment and inadequate fee
structures that do not compare with their civilian counterparts.
Currently TRICARE reimbursement is at the 45 percent rate allowable,
like MEDICARE reimbursement. It is my understanding that under the old
CHAMPUS program, providers were reimbursed at 80 percent. An increasing
number of MEDICARE providers are leaving networks because of this low
reimbursement rate.
Gentlemen is this adequate?
Answer. TRICARE reimbursement to civilian providers, by law, is
linked to Medicare fee schedule rates. Beneficiaries in TRICARE
Standard pay 20 percent co-pay and TRICARE pays the remaining 80
percent of the bill up to 115 percent of the Civilian Health and
Medical Program of the Uniformed Services (CHAMPUS) Maximum Allowable
Charge (CMAC). After 1 April 2001, TRICARE will pay 100 percent of the
bill for dependents of active duty personnel who are enrolled in
TRICARE Prime for authorized services. For military retirees (and their
Medicare-eligible dependents) who also have Medicare Part B, Medicare
will pay 80 percent of the allowable charge, and TRICARE will pay the
remaining 20 percent after 1 October 2001. Our most recent data shows
that only 4 percent of providers do not accept our current payment
rates and billing procedures. For calendar year 2000, overall physician
CMACs increased 7.5 percent, on a dollar-weighted basis. Although
TRICARE uses Medicare's payment model in most cases, we have found it
necessary to create ``carve outs'' with higher reimbursement rates in
areas in which we have had difficulty attracting enough providers to
serve our beneficiaries (i.e., Alaska). Provider recruiting is also
enhanced by the fact that hospitals that accept Medicare must also
accept TRICARE.
Question. Will this impact the number of providers available to our
over 65 year old beneficiaries?
Answer. We expect high levels of participation of those providers
who currently accept Medicare because the combination of Medicare and
TRICARE For Life for our Medicare-eligible beneficiaries will cover 100
percent of the allowable charges as of 1 October 2001.
Question. In areas such as Dallas, which has approximately 100,000
beneficiaries, and there is not a military medical treatment facility,
how are we addressing issues of access to providers?
Answer. Health Net Federal Services (formerly Foundation) continues
to develop a robust network of over 1,900 primary care and specialty
providers to care for TRICARE Prime, Standard and Extra beneficiaries
in the Dallas Area. Beneficiaries who enroll in TRICARE Prime are
guaranteed the same access standards as beneficiaries who enroll in
Prime at a military treatment facility. Recent surveys and reports have
shown that access standards are being met and that 90 percent of
providers have open panels and are accepting new TRICARE patients. The
Dallas situation is similar to other areas of large beneficiary
populations that do not have access to a military medical treatment
facility. Many beneficiaries in this area are eligible for additional
benefits because of the Base Realignment and Closure program.
Question. Some of my constituents are concerned about the quality
of provider you get when you reimburse at 45 percent as opposed to 80
percent. Are you offering our soldiers and their families the best of
the best medical care or second rate medical care through TRICARE?
Answer. TRICARE maximum physician payment amounts, by law, should
be set at no more then Medicare's level of physician payments. We think
that TRICARE maximum allowable payment levels (known as the CMACs) are
equal to 58 percent of the provider billed charges, not 45 percent. Due
to provider discounts, the actual payment levels are about 50 percent
of billed charges. Those providers that accept TRICARE must meet tough
requirements in our credentialing process as required by our contracts
before they can see our beneficiaries. Network physicians are typically
Board-certified. Clinical outcomes studies at military treatment
facilities have shown results comparable or superior to those at
similarly sized civilian facilities. I am aware of civilian providers'
concerns about Medicare reimbursement rates, but I am unaware of any
data demonstrating that TRICARE beneficiaries are receiving second-rate
medical care.
Question. What do you believe are the key issues in attracting and
retaining providers?
Answer. Adequate reimbursement rates, ease of submitting claims and
timeliness of claims payments. We have made substantial progress in all
of these areas and continue to improve. The latest data from our
TRICARE Managed Care Support Contractors shows that 96 percent of all
claims are being paid within 30 days, and nearly 100 percent of claims
are being paid within 60 days. We are making significant progress in
developing and deploying electronic claims submissions and web-based
tools to further streamline claims filing and processing.
Question. Can you comment on your meetings with HCFA on identifying
those who did not enroll in B and what solution is needed to waive this
penalty?
Answer. My staff has carefully reviewed available data and it
appears that approximately 7 percent of military retirees and family
members who are Medicare-eligible do not have Medicare Part B. The
TRICARE Management Activity (TMA) and the Health Care Financing
Administration (HCFA) have continued to meet to explore options to best
ensure that these great American patriots are served. HCFA and TMA are
pooling data to facilitate this effort. In the absence of legislative
relief to waive the 10 percent per year penalty, these beneficiaries
will have to either pay the penalty or apply on an individual basis to
their congressional representatives for a waiver to participate in
TRICARE For Life. I strongly support removing this remaining impediment
to restoring the promise made to our over-65 retirees and their
families. I am also anxious to partner more closely in devising an
equitable mechanism to care for those patients for whom DOD and HCFA
have a shared risk: taxpayers should only have to pay this bill once.
This will require a significant change in approach for both of our
organizations, along with additional legislative assistance.
Question. What marketing plan is planned to educate the over 65
retirees about about TRICARE For Life?
Answer. In January, a letter was sent to every military retiree
and/or family member who is Medicare-eligible or who would be on 1
April 2001. This letter briefly outlined some of the benefits created
by the Fiscal Year 2001 National Defense Authorization Act and strongly
encouraged them to enroll in Medicare Part B. In February, the TRICARE
Managed Care Support Contractors mailed detailed information on the
TRICARE Senior Pharmacy program to this group. Detailed information has
also been shared via TRICARE Management Activity (TMA), Air Force local
web sites and publications. In addition, every Military Treatment
Facility (MTF) has developed local marketing strategies including signs
and flyers in the MTF, articles in the base/local paper, etc. The Air
Staff is refining additional marketing toolkits for distribution to AF
MTFs later this spring. TMA has indicated that official DOD educational
pamphlets will be available this summer. The Coalition and other
retiree groups, with input from the Services and TMA, have been
advertising and marketing the TRICARE For Life benefit across the
United States.
Question. Can you comment on how the implementation of TRICARE For
Life will impact your resources? (Physician contacts per year average
12 per year in those over 65 as compared to 4.6 per year in ages 15-
44). (Days of Hospital Care per year average 269 days of care per one
thousand persons in those over 65 as compared to 54.6 per one thousand
persons in ages 15-44).
Answer. We consider serving the great patriots of this nation and
their dependents both a privilege and a pleasure. TRICARE For Life
``restores the promise'' to those who have sacrificed so much. Our
primary mission is to ensure the health and well being of all active
duty service members, to ensure our forces are ready to meet any
contingency on the global spectrum, and to ensure our medics are well
trained to support the operational forces. Our plan is to maximize
existing MTF capability in order to provide as much care as possible to
our 65+ beneficiaries, without compromising our primary mission. Review
of our TRICARE Senior Prime experience showed that our Medicare-
eligible beneficiaries averaged as many as 21 outpatient encounters per
year. Increasing workload at military treatment facilities (MTFs) will
increase resource requirements. We face unique challenges for prudently
managing our limited resources in fiscal year 2002.
We must ensure that our readiness mission, graduate medical
education requirements and care to active duty families and other
retirees and their families is not compromised. We will rely on private
sector care to help provide the complete medical benefit, where
Medicare is first payer and TRICARE second payer. In order to best
serve all beneficiaries, the Military Health System must have full
funding of our current requirements, as well as the new benefits
authorized by the Fiscal Year 2001 National Defense Authorization Act.
Question. Gentlemen, will you be able to meet the goals of TRICARE
For Life and still be able to provide care to the active force based on
your projected budgetary guidelines?
Answer. Our commitment to the health and readiness of our fighting
force is unchanged. They are our first priority. It is also critical
that we maintain a robust patient population so that the providers who
care for our service members and their families maintain their clinical
skills. Successfully accomplishing these two mandates while
implementing TRICARE For Life will require full funding of our current
resource requirements as well as additional funding for additional
workload. We must apply a balanced approach in our MTFs that ensures we
are mission ready, that our graduate medical education requirements are
met, and that the health needs of active duty families and other
retirees and their families are not compromised. We consider it a
privilege and pleasure to serve the 65+ population, but have limited
capacity at our MTFs. We will not be able to provide care to all
TRICARE For Life beneficiaries in our MTFs. We will rely on private
sector care to help provide the complete medical benefit, where
Medicare is first payer and TRICARE second payer.

MEDICAL PERSONNEL

Question. Are you able to recruit the professionals you need to
meet medical personnel requirements (Active and Reserve Components)?
(All three services identify recruiting and retention of nurses as an
important shortfall).
Answer. The Air Force is definitely having difficulty recruiting
and retaining Active Duty medical professionals. Loss rates are higher
compared to average rates over the last three years. Lower accession
rates and higher loss rates are applicable to most Corps. The bottom-
line is that losses are greater than gains over the last three fiscal
years. We have determined the following as critical specialties, where
current personnel are below 90 percent of requirements:
Physicians: anesthesiologists (76 percent), psychiatrists (83
percent), dermatologists (82 percent), pathologists (83 percent),
radiologists (77 percent), and neurologists (76 percent).
Dentists: endodontists (86 percent), prosthodontists (54 percent),
general dentists (68 percent), periodontists (85 percent), and oral/
maxillofacial surgeons (89 percent).
Biomedical Sciences: pharmacists (80 percent), optometrists (80
percent), dietitians (89 percent), and biomedical engineers (86
percent).
Nurses: nurse anesthetists (90 percent by June 2001).
The Air Force has found the use of the Health Professions
Scholarship Program extremely effective in recruiting high quality
applicants. However, the challenge occurs trying to retain them past
their year of payback for their education.
Air National Guard
The Air National Guard (ANG) has been fairly successful to date in
the area of medical recruiting. However, their new requirement to stand
up critical care teams and surgical teams will be a challenge. The ANG
is facing the same challenges as the other components, such as their
need to offer more incentives and increase the size of their recruiting
staff to help their recruitment and retention initiatives. The status
of the ANG medical recruiting program is:
Physicians.--Currently filled at 94 percent overall. However, this
year we are facing increased requirements of Internal Medicine
Specialists. In addition new requirement for critical care physicians
and various type of surgeons have been added.
Dentists.--Currenly filled at 85 percent. There will be an increase
this year for the Air Force Specialty Codes (AFSCs) that support this
Corps. It is anticipated that this percentage will drop if the
incentives do not remain in place to support not only recruiting but
also retention.
Biomedical Sciences.--Currently filled at 79 percent. There will
actually be a decrease in requirements this year and it is anticipated
that the fill rate will go up.
Nurses.--Currently filled at 105 percent. Concern is with new
requirements for critical care nurses, nurse anesthetists, surgical
nurses, and operating room (OR) nurses.
Medical Administrators.--Currently filled at 116 percent. No
recruiting concerns.
Reserves
Reserve Center (AFRC) reports that, in most cases, it can recruit
the medical professionals they need given adequate funding for
incentives. Their main reason for shortfalls is due to the inability to
find certain specialties to fill vacancies in specific areas.
Currently, their significant shortages include: general surgeon (84
percent), family physician (83 percent), public health officers (83
percent), optometrists (82 percent), orthopedic surgeon (80 percent),
bioenvironmental engineer (68 percent), internal medicine (66 percent),
and critical care medicine (44 percent). In the physician areas,
specifically Critical Care Medicine, there are too few critical care
physicians in the United States. This reduced recruiting pool, along
with the requirements of their civilian practice, makes it quite
difficult to draw this limited group into the Air Force Reserve. Their
experience from the Desert Storm deployment and its impact on private
practice make some physicians hesitant to assume a similar risk in
today's environment. For optometrists, there are no real incentives for
an optometrist to reduce their incomes in their private practice to
make a percentage of that as an Air Force Reserve member. Also, the Air
Force Reserves can't currently offer incentives to any of the non-
physician shortages area.
Question. Are medical professionals able to sustain their clinical
skills at a high level? (We have funded the Joint Trauma Training
Center at Ben Taub which is a Tri-service program).
Answer. From the primary care standpoint, the answer is yes.
Emergency Medicine physicians, Family Practice physicians, Internal
Medicine physicians, Pediatricians, Nurse Practitioners, and Physician
Assistants can practice full scope of care in the military medical
treatment facilities.
Some of the Internal Medicine subspecialists and Surgical
specialists cannot practice full scope of care at every military
treatment facility. In fact, there is concern that peacetime healthcare
is not adequate preparation for deployment medicine. As a result, the
Air Force has developed ``mission ready'' currency requirements for the
skills and knowledge critical to deployment medicine. New training
platforms have been developed. One example is the Joint Trauma Training
Center (JTTC) at Ben Taub General Hospital in Houston, Texas where
approximately 65 Air Force nurses and physicians rotate annually to
upgrade their experience. The JTTC is a prototype effort to provide
military medical personnel with real world, hands on trauma experience.
Question. Does the current medical structure meet military
readiness and force projection requirements?
Answer. Yes, the current medical structure does meet military
readiness and force projection requirements. The Air Force Medical
Service (AFMS) ensures that these requirements are met through the
Medical Resources Letter (MRL) to source identified requirements. The
MRL (which includes manpower, equipment, and supplies validated for
programming, acquisition, and maintenance) ensures that the AFMS has
enough personnel postured into Unit Type Codes to meet sustainment and
wartime requirements. The MRL is accomplished approximately once every
six months with the full involvement from each Major Command, Air
Reserve, and Air National Guard components.
Question. What have been the military medical requirements for the
Balkans, Southwest Asia, and other deployments? What is the impact?
Answer. We currently have approximately 200 of our Air Force
Medical Service (AFMS) men and women on the ground in the Southwest
Asia and European theaters providing direct support to our sustainment
operations. We also have another 1,375 medical personnel in our ongoing
Aerospace Expeditionary Force ``on call'' system (90-day rotational
standby for rapid deployment) which maintains a continuous readiness
posture permitting their rapid deployment in support of a CINCs
requirement. This on-call status is transparent to most, in that these
providers and support staff continue to provide beneficiary health care
in our medical treatment facilities (MTFs) on a day-to-day basis during
their respective rotations. But to have and maintain this capability
there is an impact, both positive and negative.
On the positive side, the medical care and/or support given by our
providers is unequalled. From resuscitative surgery to preventive
medicine, we have extremely competent and clinically current providers,
as well as other professionals, who consistently step up when needed.
This force health protection aspect is often critical when supporting
U.S. forces in austere locations, hours from fixed/capable hospitals.
Secondly, the operational exposure these providers gain in the deployed
setting is immeasurable and cannot be replicated in our MTFs or
civilian communities.
The downside is that to maintain a clinically current AFMS member,
requires a training tail that can be expensive in both time and/or
money. The time commitment necessary may also constrain the
availability of that provider in the beneficiary health care system.
This is important to the AFMS, as we are ardent supporters of new
legislation that is bringing back the care of our retired members and
their dependents. That said, a fundamental question that, as Air Force
Surgeon General, I am addressing is how best to plan for and balance
our operational requirements with those responsibilities and
requirements supporting our beneficiary healthcare programs. A good
example is the optimization of our critical care providers assigned to
our rapid response teams, called Small Portable Expeditionary Aerospace
Rapid Response teams (SPEARR), and their assignment to our major
medical centers. This concept will offer the best forum to maintain
currency of clinical skills, and deployment of these personnel will
have less of an impact on beneficiary access because of the depth of
manning of the facility.

THIRD PARTY COLLECTION

Question. How does the third party collection system currently work
within the Military Medical Treatment Facilities?
Answer. The third party collection program (TPCP) is one of three
reimbursement programs in which the Medical Treatment Facility (MTF)
participates. The Medical Service Account (MSA) collects dollars
directly from patients or agencies for reimbursement of medical
services (i.e., inpatient stays, civilian emergencies, pay patients
OCONUS, etc.). The Medical Affirmative Claims/Third Party Liability
(MAC/TPL) program seeks to recoup dollars expended by the government
when a third party is responsible for invoking the need for care (e.g.,
automobile accident, food poisoning, etc.). Funding for both programs
are deposited directly back into the O&M of the facility that provides
the care.
The TPCP is governed by 10 USC, Sec. 1095, chapter 55, implemented
by 32 CFR Part 220, and seeks to recoup dollars for care given to
eligible beneficiaries when they are covered by other health insurance.
The beneficiaries under this program are never liable for amounts
billed to their insurance policy or any amount not paid (balance
billing). The dollars collected under the auspices of the TPCP are
deposited directly back to the MTF's O&M and are used to enhance health
care operation or TPCP collection operations.
Question. What is the impact on Medical Treatment Facilities of
providing the medical services and collecting for those services (for
example at Wilford Hall and Brook Army Medical Center in San Antonio)?
Is the money returned to the Medical Treatment Facilities that provided
the services?
Answer. Providing medical services for civilian trauma patients and
receiving reimbursement for those services help maintain critical
readiness skills for our provider and support staffs. All
reimbursements for these services are collected and retained by the
Medical Treatment Facility (MTF). There are no plans to implement
elsewhere within the AFMS, for Wilford Hall Medical Center is the only
Air Force MTF licensed to provide Level 1 trauma care.
______

Questions Submitted by Senator Daniel K. Inouye

BIO-CHEMICAL TERRORISM

Question. General Carlton, from your testimony the committee heard
about the bio-terrorism exercise called ``Alamo Alert''. Based on your
after-action evaluation report and the ever present real threat from
terrorism, what role does the Military Health System plan for itself in
response to a bio-chemical attack in the civilian community?
Answer. Senator Inouye, thank you for your time and question about
our military health system's response to chemical and biological
attacks within our civilian communities. The Air Force Medical Service
(AFMS) is aggressively pursuing a variety of initiatives that will
improve early warning and response to chemical and biological terrorism
events. We are determined to provide the very best defense of the
nation and partner with our civilian counterparts to leverage training,
exercise opportunities, advances in the revolution in biotechnology and
informatics. One of our most promising interoperability initiatives
will leverage our clinical laboratories in a nation-wide network called
the National Laboratory Response Network (NLRN). The Center for Disease
Control and Prevention (CDC) established the NLRN, a collaborative
effort between the CDC and the Association of Public Health
Laboratories (APHL). The NLRN is an early warning network to detect a
covert release of pathogenic agents by utilizing procedures established
by the CDC. It is based on grouping laboratories into one of four
different levels, A through D, according to their ability to support
the diagnostic needs presented by a bioterrorism event. Laboratories
able to conduct basic tests to rule out a particular biological agent
can operate at Level A. Recognizing that most DOD clinical laboratories
currently have the capability to operate at Level A, and that this
added capacity would enhance the NLRN, the CDC is looking at DOD
laboratories to enhance its NLRN. Additionally, the CDC and USAF
Surgeon General have entered into a Memorandum of Agreement to support
the establishment and coordinate collaboration towards the development
of a National Medical Early Warning System of which the NLRN is an
important component.
Another initiative is the United States Air Force weapons of mass
destruction (WMD) first responder enhancement program predicated on
interoperability with local and state authorities and agencies. The
program's purpose is to enhance First Responder (firefighters, disaster
preparedness, explosive ordnance disposal, security forces, and medical
staffs) planning, training and equipment capabilities to improve an
installation's ability to detect, assess, contain and recover from a
peacetime WMD terrorist (non state actors) incident involving
biological, nuclear/radiological, incendiary, chemical, explosive
devices. Where appropriate, response planning criteria includes the
activation and use of local memoranda of agreement with local
authorities. The Air Force program provides for an initial response
capability using fire protection, hazardous materials, disaster
preparedness, security, medical, and, where available, explosive
ordnance disposal personnel for improvised explosive devices, as the
core response elements. The initial responding elements assess and
determine the extent of the problem (within capability), take actions
to implement contamination avoidance measures, contain the spread of
contaminants, and provide initial casualty care capability. All Air
Force installations are required to have mutual aid support agreements
for security, fire protection, hazardous material, medical, and
explosive ordnance disposal. Memoranda of Agreement (MOAs) ensure an
effective coordinated response between the Air Force and civilian
communities. Bases address exercises, training and interoperability of
equipment during coordination of MOAs between installations and
localities through the Local Emergency Preparedness Committee (LEPC) or
Area Contingency Plan (ACP) representation. These written agreements
and exercises extend to terrorist WMD incidents.
In another force multiplying effort, the United States Air Force
(USAF) surgeon general's office provided planning information and
capability description for its deployable and in-place medical assets
as an annex to the Chairman of the Joint Chief's of Staff Instruction
(CJCSI) 3110.16, ``Military Capabilities, Assets, and Units for
Consequence Management Operations.'' This annex is maintained by the
Defense Threat Reduction Agency (DTRA) as an information resource for
joint planners. The Air Force Medical Service (AFMS) is actively
involved with the Joint Task Force--Civil Support (JTF-CS), ensuring
that Air AFMS assets are written into its deliberate plans for a
homeland or nuclear/radiological, biological or chemical terrorism
event. Additionally, the USAF/SG is creating new deployable assets to
better provide bioterrorism consequence management situational
awareness to the JTF-CS commander and his supported state and local
first responders.
As I noted at your hearing on February 28, 2001, the USAF, Texas
National Guard, and City of San Antonio conducted exercise ALAMO ALERT
in January 2001. Alamo Alert, and its component gaming simulation, CODE
SILVER-San Antonio, were designed to provide the impetus for continued
development of joint, integrated military /civil response plans. This
exercise clearly illustrated the need for expanded cooperation among
the civilian and military communities, with particular emphasis on
health care providers and public health functions. The CODE SILVER-San
Antonio game discussions revealed several areas of continued concern.
These included: the complex nature of public affairs in a contagious
bioterrorism event; the challenges of interagency communications in the
initial stages of a response; the importance of early recognition of
terrorist-induced disease outbreaks; the central role of infection
control procedures in containing an outbreak; and the need for a
strategic approach to infection control. Other topics were the need for
comprehensive planning to provide a health care ``surge capacity'' to
metropolitan areas and the requirement for mass vaccination planning in
concert with the Centers for Disease Control.
In addition to these specific issues, the broad lessons of Alamo
Alert related to strategy, resources, and planning. In two critical
areas of the response, infection control and public affairs stood out
as critical items, reinforcing the need for the development of
strategic approaches based upon sound thinking and with a ``big
picture'' view of the unfolding situation. Finally, the exercise
participants learned the importance of crisis decision making in a
bioterrorism situation. The ``will to win,'' to make difficult
decisions, will be necessary if a community hopes to successfully
overcome bioterrorism. The need for crisis decision making and
leadership to be realistically and honestly exercised was apparent
throughout Alamo Alert. The AFMS has a similar training and exercise
program ongoing in the Pacific Theater--AFMedPac2000. This effort
stresses chemical and biological planning and awareness at our medical
treatment facilities, encouraging commanders, staff and readiness
personnel to critically evaluate their plans, resources and
interoperability with local, state and national assets. The summer 2000
exercise at Elmendorf AFB in Anchorage, Alaska featured an integrated
state and local response. Hickam AFB in Honolulu, Hawaii will exercise
in July 2001.
Disease early warning and surveillance are life savers in a
bioterrorism event. The results of the May 2000 TOPOFF exercise in
Denver highlight how local communities--indeed even state and national
assets--can be quickly overwhelmed in catastrophic and contagious
biological agent attack. The AFMS is the lead for a Department of
Defense dual-use science and technology program called the Lightweight
Epidemiology Advanced Detection and Emergency Response System
(LEADERS). This system is designed to provide military commanders,
civilian authorities and medical personnel with the enhanced ability to
mitigate the consequences associated with response to a biological
warfare event or the onset of a significant natural disease. Rapid
identification of the medical threat and effective and ongoing
communications between medical facilities and Command personnel is an
essential element in minimizing loss of life and the potential for
disaster. The LEADERS System provides an integrated collection of
medical surveillance capabilities, including real-time, easy-to-use
mechanisms for collecting, storing, analyzing, and viewing critical
medical data, along with an Incident and Event Management capability to
facilitate a rapid, effective response. LEADERS is currently in stage 1
proof of concept development. Prototypes were involved with local
hospitals during the Democratic and Republic National Conventions last
summer, the Presidential Inauguration in January 2001, and the AFMS is
working through the Defense Threat Reduction Agency for possible
LEADERS deployment to the Winter Olympic Games at Salt Lake City, Utah
in 2002.
The biotechnological revolution may be the most profound revolution
in modern times--and the AFMS is leveraging this fast-paced
technological juggernaut to improve our nation's defense. One example
of a new research initiative launched by USAF Surgeon General is the
Ecogenomics in Outbreak and Surveillance (EOS) project. Its primary
objective is to develop a rapid detection microarray capable of
detecting respiratory pathogens in a controlled population of USAF
basic military trainees (BMT) and technicians. This model system will
demonstrate the effectiveness of microarray technologies in pathogen
classification. EOS will start with detection of viral respiratory
pathogen-specific sequences, but this system proposed can be expanded
to bacterial, fungal, and chimerics. Development efforts for EOS have
emphasized future capabilities that allow not only direct hybridization
capabilities, but also biochemical reaction assessments and proteomics
capabilities simultaneously. This will be accomplished with HydroGel
chip technology from Packard Biosciences and Qdots particles from
Quantum Dot Corporation (QDC). Stanford Research Institute (SRI) will
provide a handheld microarray reader unit that will detect Qdots and
the technical expertise to miniaturize the sample processor and
microarray reader unit towards a field-capable system. An additional
goal of the EOS project is to serve as a model for producing additional
disease-specific microarrays that can be utilized when rapid
identification of an organism in an outbreak investigation is required.
Success with this methodology will be the first step in changing the
steps of the current outbreak investigation paradigm.
Numerous potential applications for genomics in the chemical and
biological warfare (CBW) are possible. EOS will focus on infectious
disease pathogen identification in a real-world controlled population
as a step towards rapid detection of CBW agents of interest to the
Department of Defense (DOD). However, any CBW projects utilizing the
methods developed as part of the EOS project will be coordinated with
the U.S. Army as the lead agent. The high incidence density of
respiratory illness in this controlled military population presents a
starting model for future assessments of the impact of biological,
chemical, physical and social exposures at the molecular level (i.e.,
ecogenomics) and will provide improved technology for the detection and
identification of biological threat agents.

MAINTAINING WAR READINESS SKILLS

Question. General Carlton, in your testimony this morning regarding
the Primary Care Optimization initiative, you stated that 80 percent of
the Air Force Medical Service (AFMS) care is delivered in primary care
clinics. You also reported on some very exciting and ambitious State-
of-the-Art Expeditionary Technology as well as Air Force Readiness
Plans. Given the current retention status of the Air Force Medical
Service how will you implement these initiatives across the Air Force
Medical System and at the same time have a trained medical staff able
to perform the traditional medical intensive interventions required in
a large scale battle scenario?
Answer. Although our manpower losses have been greater than our
gains over the past three years, I am confident that we can maintain a
trained medical staff capable of performing our medical readiness
mission as well as implement ``state-of-the-art'' initiatives.
We currently have 200 Air Force Medical Service (AFMS) personnel on
the ground in Southwest Asia and European theaters providing direct
support to our sustainment operations. We also have 1,375 medical
personnel assigned to deployable medical units that support the
Aerospace Expeditionary Force (AEF). We have several specialized teams
(rapid response, critical care, surgical, public health) that can be
deployed in building block fashion to support the CINC's requirements.
Our deployment teams pull 90-day rotational standby for rapid
deployment in support of AEF. We are working hard to insert man-
portable technology into these deployable teams to bring medical
center-level care to the front line. These technologies include
ultrasound, radiology, and other high tech monitoring capabilities
through lap top computers.
We have centralized our assignment of deployable surgical and
critical care medical team personnel to our medical centers and large
hospitals. The advantages are two-fold. First, the medical center
environment provides a rich clinical environment to sustain critical
readiness skills. We can also have enough depth in services and
staffing so that the deployment of our readiness teams will have less
of an impact on our peacetime beneficiaries' access to care. Our
smaller facilities and clinics have a readiness mission of force
readiness and protection--to proactively ensure that all Air Force
personnel are medically fit and ready to support the Air Force mission
as well as support the deployable preventive medicine teams.
In addition to moving our deployable medical readiness assets to
medical centers, we have also implemented the Readiness Skills
Verification Program. This program identifies those critical skills
needed for every team member and outlines training programs to meet
those needs. To ensure our critical care personnel have current trauma
skills, we send them for extensive training in civilian medical centers
with trauma units. We are currently at Ben Taub in Houston, TX, and
will begin at Baltimore Shock Trauma in Baltimore, MD this fall.
______

Questions Submitted by Senator Ernest F. Hollings

BLOOD-RELATED DISEASE RESEARCH

Question. Under Congressionally Directed Medical Programs, is there
on-going research targeted on blood-related diseases such as leukemia
or lymphoma? Is blood-related disease research to be consistent with
the mission of DOD medical research?
Answer. There is no on-going research within the Congressionally
Directed Medical Research Programs that is targeted on blood related
diseases, to include leukemia or lymphoma.
Is blood-related disease research to be consistent with the mission
of DOD medical research? The answer to this question depends in part on
how broadly the phrase ``blood-related disease'' is to be interpreted.
Blood diseases, as they are generally defined, are not a consequence of
most military activities or threats, and so are not considered within
the mission of DOD medical research. This fact notwithstanding, there
may be military applications of knowledge gained through blood disease
research. The military applications of such knowledge are, for the most
part, peripheral to the diseases themselves and do not benefit victims
of these diseases. Certain research projects on blood-related diseases
may be consistent with the DOD medical research mission if the
anticipated findings can be clearly demonstrated to have direct
relevance and applicability to a militarily unique need. All such
projects need to be considered on a case-by-case basis.
The principal area of potential application is in combat casualty
care. Hemorrhage resulting from trauma is the primary cause of
battlefield deaths, and the DOD medical research mission is accordingly
concerned with the development of hemorrhage countermeasures, to
include the application of clotting enhancers that were originally
identified through studies of clotting disorders. Clotting disorders
are also occasionally associated with trauma-induced hemorrhagic shock,
reperfusion, and hypothermia; such disorders represent secondary
complications of trauma that are much less important than hemorrhage as
a cause of battle-related morbidity and mortality, but are nonetheless
consistent with the mission of DOD medical research. In addition,
studies on platelet function may be consistent with the DOD mission if
they can be related to the development of improved (field-expedient)
means for platelet preservation and storage. More broadly, the DOD is
interested in substances that can improve oxygen flow to organs under
hemorrhagic conditions where blood flow is reduced. To the extent that
studies of anemic conditions or therapies for these conditions can be
related to the development of pharmacological or other countermeasures
that could be employed in a field trauma management setting, they may
be consistent with the DOD medical research mission.
If one considers blood-related disease more broadly, there are a
number of infectious disease pathogens of military importance that are
blood-borne and cause symptoms directly through their effect on blood
cells or blood vessels. Examples include malaria, Human
Immunodeficiency Virus (HIV), and a number of viruses that can cause
hemorrhagic fevers. However, such diseases are not typically considered
to be blood diseases, per se. Within the DOD medical research mission,
they are instead addressed through strategies targeted at the infecting
organisms. Because the primary focus of this component of DOD mission
research is on prevention of disease, symptomatic treatments targeted
at a particular organ system such as blood are not of military
relevance. Research on the pathogenic effects of these organisms on
blood components are only studied insofar as is necessary to understand
the life cycle of the organism, identify appropriate targets for
intervention (i.e., through vaccines or drugs), and identify and
understand correlates of protection that are essential to the
evaluation of product efficacy.
Question. Has any work been done to identify the occurrence rate or
prevalence of blood-related diseases resulting from environmental
exposure in the theater of war?
Answer. There have been extensive studies among deployed forces
including Gulf War (currently a $155 million portfolio, over 190
research studies), Southwest Asia (SWA), and Bosnia veterans. The Army
Medical Surveillance Activity (AMSA) is the principal DOD surveillance
group with the DOD Deployment Health Research Center located at the
Navy Health Research Center (NHRC) as the principal custodian of in-
depth exposure research. The NHRC is completing a study looking at Gulf
War, SWA, and Bosnia veterans and health outcomes. Additionally, NHRC
has begun the Millennium Cohort Study, the largest Department of
Defense prospective cohort study ever conducted, which will attempt to
answer the question ``Does military service, in particular, operational
deployment, result in a higher risk of chronic illness among military
personnel and veterans?'' The probability-based sample of 140,000
military personnel will be surveyed every 3 years over a 21-year
period. The first questionnaire, scheduled to be released in summer
2001, will be sent to 30,000 veterans who have been deployed to
Southwest Asia, Bosnia, or Kosovo since August 1997, and 70,000
veterans who have not been deployed to these conflict areas. Twenty
thousand new participants will be added to the group in each of the
years 2004 and 2007 to complete the study population of 140,000.
The final White House document on DOD research efforts regarding
exposures during the Gulf War can be found at http://www.mvhcb.gov/
GWsummary/GWI%20Summary%20Page.htm.

HEALTH OF AMERICAN TROOPS

Question. The National Academy of Sciences and the Institute of
Medicine issued a report in January, which made recommendations to the
Department of Defense about improving the health of soldiers deployed
to the theater of war. The Institute's recommendations are compelling
and, if implemented, would make a strong commitment to the health of
American troops. Are you familiar with the Committee's recommendations?
Do any of the individual services, or the Department of Defense, have
implementation plans for the any of the Committee's recommendations? If
not, why not?
Answer. The National Academy of Science's Institute of Medicine
(IOM) final report Protecting Those Who Serve: Strategies to Protect
the Health of Deployed U.S. Forces is an important work regarding DOD
strategies for Force Health Protection (FHP). It has been reviewed by
the Air Force (AF) leadership and distributed to our medical
facilities. This document will serve as a baseline to identify
opportunities for improved FHP approaches across the Air Force. Many
parts of the six outlined strategies have already been implemented or
are being developed in the Air Force and other Services, but challenges
particularly remain in the areas of documenting and tracking exposures
in relation to individual personnel as well as fully computerizing
patient records.
FHP arose from earlier initiatives to change and improve the
Military Health System's response to deployments and the health of
deployed forces. A January 1996 policy memorandum had directed a
detailed medical surveillance and health protection plan for U.S.
military forces deploying to Bosnia. In August 1997, DOD issued a
directive DODD 6490.2, ``Joint Medical Surveillance,'' and an
accompanying instruction, DODI 6490.3, ``Implementation and Application
of Joint Medical Surveillance for Deployments,'' which addressed many
shortfalls in the Military Health System's response to health and
health protection during deployments. In mid 1998, the Air Force
Medical Operations Agency directed United States Air Force Major
Command Surgeons to implement DODD 6490.2 and DODI 6490.3 in interim
guidance. Later in December 1998, the Joint Staff, in collaboration
with the Assistant Secretary of Defense for Health Affairs, specified
the preventive actions that must take place before, during, and after
deployments to assure better health protection and properly documented
health care. Joint Staff Memorandum MCM-251-98 (4 December 1998)
requirements superseded the interim guidance. Our Air Force Preventive
Medicine (PM) and Bioenvironmental Engineering (BEE) staff are
currently working with J4-MRD, the Services PM representatives and the
Joint Preventive Medicine Policy Group on revisions of the Joint Staff
Memorandum, now in second draft. We are also preparing an Air Force
Instruction jointly with the other Services to institutionalize
comprehensive health surveillance in deployments (expected completion
date (ECD) 31 December 2001).
The following documentation groups several specific initiatives
completed or in progress according to the six strategies proposed by
the IOM:

Strategy 1. Use a systematic process to prospectively evaluate non-
battle risk associated with the activities and settings of deployments.
The Armed Forces Medical Intelligence Center (AFMIC) collects
detailed information on a continuing basis on worldwide disease and
environmental hazard data and links this data to appropriate preventive
medicine countermeasures. Recently, AFMIC has been expanding its
mission and capability to include more detailed information on
environmental hazards. A major product of the AFMIC is the Medical
Environmental Disease Intelligence and Countermeasures CD-ROM, an aid
widely distributed throughout the Services to assist operational
planners and others in preventive medicine planning for deployments.
The recent deployment of U.S. troops to Bosnia and Kosovo
exemplifies how DOD is integrating comprehensive environmental risk
assessment data with troop deployments. Realizing that deployments of
troops in close proximity to industrialized areas presents increased
Force Health Protection concerns, the DOD in preparing for this
deployment used medical intelligence data in selection of deployment
sites and surveillance efforts.

Strategy 2. Collect and manage environmental data and person
location, biological samples, and activity data to facilitate analysis
of deployment exposures and to support clinical care and public health
activities.
During a period of 12 months, over 800 environmental samples from
Bosnia and Kosovo were analyzed for over 6,600 separate factors. This
analysis was done in theater, allowing for quick turnaround, with
results usually available to operational commanders within 10 days.
Similar environmental sampling is being conducted in Southwest Asia.
Ongoing environmental surveillance in accordance with existing policy
outlined in DODI 6490.3, ``Joint Medical Surveillance for
Deployments,'' has ensured environmental risks are minimized and
environmental exposure data are collected, analyzed, and assessed for
potential health impact.
The Defense Medical Surveillance System (DMSS), a Joint capability
managed by the Army Medical Surveillance Activity (AMSA), U.S. Army
Center for Health Promotion and Preventive Medicine (USACHPPM) (see
detailed description under Strategy 4), provides the link between
health surveillance data and specimens in the DOD Serum Repository,
which contains more than 26 million frozen serum specimens from
military personnel. As part of routine screening for Human
Immunodeficiency Virus (HIV) infection, these specimens are routinely
collected during military service and before major deployments and are
available for analysis when new health questions arise. In addition,
Joint Task Force Surgeons can request additional serological sampling
when required by concerns that arise during or after a specific
deployment. Serological surveys using specimens from the repository
have successfully provided evidence-based answers regarding the
prevalence of such infections as Hepatitis C and Lyme disease in our
troops. Access to the serum bank is limited and is coordinated through
AMSA.

Strategy 3. Develop the risk assessment, risk management, and risk
communication skills of military leaders at all levels.
A major goal of FHP is to make military members partners in
protecting their health by supplying them with the knowledge, skills
and resources needed to stay healthy during military service. Risk
communication on health risks and preventive countermeasures is a
required element before, during and after deployments.
One example of this component of FHP is the Health Risk
Communication Office at the U.S. Army Center for Health Promotion and
Preventive Medicine. Their mission is to develop risk communication
skills throughout the U.S. Army and DOD by (1) providing risk
communication expertise and training, (2) delivering consultation to
senior leadership, (3) developing health risk communication
publications, and (4) responding to emergency situations. The Health
Risk Communication Office sponsors training workshops on effective,
evidence-based tools and techniques for risk communication in high-
concern, sensitive, or controversial situations.
Another communication initiative is the DOD Deployment Health
Clinical Center at the Walter Reed Army Medical Center. A primary
mission of the clinical center is to develop and implement clinical
risk communication strategies. Veterans and clinicians need and want
sound and timely information regarding deployment-related exposures and
deployment-specific health outcomes. The center is developing a dynamic
web site to sustain a dialogue with those it is charged with protecting
and their clinicians regarding exposures, diseases, health concerns,
and medically unexplained symptoms.
An interagency initiative supporting improved communication is the
Health Risk Communication Working Group of the Military and Veterans
Health Coordinating Board. This working group provides recommendations
and coordination for the health risk communication efforts of the DOD,
VA, and the Department of Health and Human Services (DHHS) for military
members, veterans, deployed civilians, and their families. The working
group's primary focus is on health risk communication before, during,
and after combat operations and other major deployments.
The Office of the Special Assistant for Gulf War Illnesses
(OSAGWI), since renamed the Office of the Special Assistant for Gulf
War Illnesses, Medical Readiness, and Military Deployments (SAGWIMRMD),
developed and implemented a comprehensive risk communication program to
respond to the concerns of Gulf War veterans, service members, and
their families. The program had its inception with a toll-free hotline
(1-800-497-6261) set up by the Persian Gulf Illnesses Investigation
Team in 1995. SAGWIMRMD has communicated directly with more than 16,000
veterans since 1996. GulfLINK (www.gulflink.osd.mil), the Special
Assistant's award winning internet home page has been the single place
that all DOD documents relating to Gulf War illnesses can be found.
Typically, GulfLINK gets over 60,000 home page ``hits'' in any given
week.

Strategy 4. Accelerate implementation of a health surveillance
system spanning the service member life-cycle and beyond.
One of the more innovative aspects of improved surveillance has
been establishment of the Defense Medical Surveillance System. In March
1997, the Assistant Secretary of Defense for Health Affairs directed
the Army to establish a Defense Medical Surveillance System by
transitioning from an Army-specific system. The Army Medical
Surveillance Activity U.S. Army Center for Health Promotion and
Preventive Medicine developed and now operates the new surveillance
system. The DMSS contains up-to-date and historical data on diseases
and medical events (e.g., hospitalizations, ambulatory visits,
reportable diseases, HIV tests, immunization tracking data and health
risk appraisals) and longitudinal data on personnel and deployments.
The Defense Medical Epidemiology Database application provides
authorized users worldwide with real-time access through the Internet
to user-defined queries of aggregate data in the surveillance system.
The Recruit Assessment Program (RAP) is a pilot DOD program for the
routine collection of demographic, medical, psychological,
occupational, and risk factor data from military recruits at the time
of accession. If successful, the RAP will initiate a longitudinal
health record for military personnel at accession and provide
comprehensive, baseline health data on military recruits. The RAP is
currently in pilot testing at several recruit centers, with plans for
more extended implementation. Pilot testing has been funded by Gulf War
related research funds through the Naval Medical Research Center.
The Military Health System (MHS) uses the Health Enrollment
Assessment Review (HEAR) as a self-reporting tool for TRICARE PRIME
beneficiaries, including active duty, but compliance problems have been
encountered in collecting the information. In response, the Air Force
has moved to implement a ``stand-alone'' HEAR to improve data
collection and availability. The HEAR is designed to be collected
annually on Air Force active duty as a part of the Preventive Health
Assessment (PHA). The TriCare Management Activity (TMA) has the lead
for implementing HEAR in the DOD and/or developing and fielding a
better health status self-reporting instrument(s). Currently, TMA has
contracted with researchers at Yale University to evaluate the utility
and validity of the HEAR and other self-reporting tools for use in
establishing health status and risk factors periodically for military
members.
In 1999, OASD(HA) established DOD Deployment Health Surveillance,
Research, and Clinical Centers. One of the major initiatives of these
Centers is the Millennium Cohort Study. The Millennium Cohort Study is
a prospective study of U.S. military forces scheduled to begin this
year. This study will systematically collect population-based
demographic and health data on over 100,000 Armed Forces personnel to
evaluate health throughout their military careers and after leaving
military service. The principal objective of the study is to evaluate
the impact of military deployments on various measures of health over
time including medically unexplained illnesses and chronic diseases
such as cancer, heart disease and diabetes.

Strategy 5. Implement strategies to address medically unexplained
symptoms in population that have been deployed.
As noted earlier, the Millennium Cohort study is one effort that
may help elucidate the nature of medically unexplained symptoms in
deployed populations. Another major initiative of the Deployment Heath
Centers may also help in this regard. The Deployment Health Clinical
Center, in cooperation with the Department of Defense/Veterans Affairs
(DOD/VA) Clinical Practice Guidelines working group, has developed the
Post-Deployment Health Clinical Practice Guidelines. These guidelines
will help improve the management of post deployment illnesses in
general, but also contain a module that specifically addresses
medically unexplained physical symptoms. The Deployment Health Clinical
Center plans on-line, web-based support of these guidelines, in
addition to various other implementation aids. The Deployment Health
Clinical Center is actively engaged in research activities to identify
diagnostic and treatment strategies that will improve our approach to
these challenging conditions.

Strategy 6. Implement a joint computerized patient record and other
automated record keeping that meets the information needs of those
involved with individual care and military public health.
The Composite Health Care System II (CHCS-II), the Military Health
System's medical and dental clinical information system, is the major
information technology enabler for FHP. This system will provide the
computer-based patient record for every military member. Release 1,
currently in on-site testing, includes capabilities for clinical and
dental outpatient care, population health, preventive health care,
ambulatory computer-based patient record, and regional clinical data
repositories, and interfaces with existing health information systems
and the Defense Enrollment Eligibility Reporting System. Release 2 will
support general dentistry, worldwide availability of records,
optometric services, automated clinical practice guidelines, and
occupational health/industrial hygiene.
The clinical functionality represented by CHCS II will be deployed
to theater operational forces in fiscal year 2002 as ``CHCS II
Theater'' through the Theater Medical Information Program (TMIP). The
Theater Medical Information Program, which is being developed to
function in the operational environment, will gather individual medical
information throughout a deployment. Because this program is integrated
with CHCS II, military medical personnel will be able to move readily
from health care in a clinic or hospital to the field and medical
information from deployments will be more accessible for future
clinical and health surveillance uses. TMIP is a component of the
Department's Global Combat Support System and is fully integrated with
war-fighter theater infrastructure programs. TMIP will support the
collection and monitoring of immunizations, ambulatory care, diagnosis,
treatment, radiation/occupational health, blood management, medical
surveillance, and medical command and control at the deployed medical
facility level. Furthermore, TMIP will electronically transmit and
aggregate these data to the interim theater database at the Joint Task
Force Commander level for use in detecting disease and illness
clustering where overt exposure histories do not exist. At the
conclusion of the deployment the patient medical encounter information
will be electronically transferred to the Continental United States
(CONUS) based clinical data repository for incorporation into the
individual's computerized patient record. TMIP is currently fully
funded through the fiscal year 2007.
Recognizing that the promised capabilities of TMIP may not be fully
realized until as late as fiscal year 2007, the Air Force Medical
Service (AFMS) has acted to improve Force Health Protection through
computerized medical records more immediately. In fact, there is a
currently deployed electronic medical surveillance system in Southwest
Asia today. This system, the Global Expeditionary Medical System (GEMS)
incorporates use of an electronic medical record to accurately track
untoward events in our deployed force and improve documentation of
care.
GEMS is a paperless data-linked tool for the front line medic to
record individual patient assessments. From the lessons learned from
prior systems called Desert Care 1 and Desert Care 2, this system can
work from a hand-held palm unit in mass casualty or combat
environments. Medical information is aggregated at progressively higher
levels allowing for accurate theater assessment, epidemiological
monitoring and decision-making. GEMS is designed do this now.
Experience from use of this system may help instruct later development
of TMIP.
GEMS includes two other modules, the Theater Epidemiology Module
(TEM), and the Theater Occupational Module (TOM). The TEM offers
automated surveillance and reporting of deployed force health and
readiness. TEM takes patient encounter data entered from the GEMS and
provides graphic display and analysis of patient data. Geographic areas
of responsibility are mapped and surveillance queries defined by the
user are automatically run on all medical data from each location in
the database. The Theater Occupational Module (TOM) is a far forward
extension of the USAF Command Core System (CCS) functionality within
GEMS. The TOM is able to record, track and monitor occupational and
environmental concerns in the expeditionary setting while maintaining a
bi-directional interface with the home base CCS.
The Air Force is the first Service to have implemented force-wide
automated tracking of all its active duty immunizations, not just those
for anthrax. Through the Military Immunizations Tracking System, and
its follow-on, the Air Force Complete Immunizations Tracking
Application, clinical personnel, administrators, and others have
instant access to the vaccination status of their people. This
facilitates reminder-recall, readiness, and vaccine safety.
The previously mentioned DMSS has important relational database
capabilities that combine data from many current sources of clinical,
personnel and surveillance data, enabling them to be analyzed by other
factors, including deployment status. For example, the DMSS is able to
link data from Service immunization tracking programs to health
outcomes data from inpatient and outpatient databases. This capability
is similar to that of the Vaccine Safety Data Link at the Centers for
Disease Control, and is a powerful tool for monitoring safety of
immunizations such as the anthrax vaccine.
The Government-Computerized Patient Record (G-CPR) initiative, a
collaborative effort among the DOD, Department of Veterans Affairs and
Indian Health Service is developing the mechanism to allow the transfer
of data between DOD and VA. Actual transfer between DOD and VA was
accomplished in fiscal year 2000 within a laboratory environment. Plans
are under development to test this capability in an operational
prototype environment.
Conclusion: We appreciate this opportunity to elaborate on the
questions posed. We are continuing to work routinely with the other
Services, Health Affairs and the Veterans Administration on deployment,
post-deployment and longitudinal health issues for our military men and
women. While we have made significant strides in improving our Force
Health Protection strategies since the Gulf War, much is yet to be
done. We are committed to fulfilling our full obligation and
responsibility in this regard.
______

Questions Submitted to Gen. William T. Bester

Questions Submitted by Senator Daniel K. Inouye

ADVANCED PRACTICE NURSES IN THE MILITARY

Question. There have been several initiatives mentioned today
regarding improvements to the Military Health System enabling better
care for our patient population, what specific role do Advanced
Practice Nurses have in this effort to improve access to care and
provide quality care? What is the optimum career path for proper
utilization of nurse practitioners in the military?
Answer. Advanced Practice Nurses are an integral component of the
total health care delivery system. Nurse practitioners are primary care
managers for an entire panel of patients and are responsible for every
aspect of health care need by providing direct care, education and
management of acute and chronic conditions. Nurse midwives are
fulfilling the growing demand for alternative prenatal and delivery
care. As such, both nurse practitioners and nurse midwives definitely
increase access opportunities for our beneficiaries. The certified
nurse anesthetists' ability to provide independent comprehensive
anesthetic care in far forward situations in addition to the hospital
setting also contributes to improving access opportunities for care.
The optimum career path of nurse practitioners in the military
would be similar to that of any other Army nurse corps officer. Their
post graduate utilization would focus on providing direct patient care
in the clinical setting. Subsequent assignments would include an
increase of administrative scope and responsibility to include
management of a clinic(s), section or department. Nurse practitioners
are afforded opportunities for military and professional development
and enjoy very successful careers to retirement.

CIVILIAN HEALTH PERSONNEL RECRUITMENT

Question. In your testimony's today you have noted problems
maintaining enough physicians in the military, are there specific
issues or obstacles you face in reference to hiring civilian
physicians? Are there similar problems hiring enough support staff for
physicians?
Answer. The answer is yes to both parts of the question. Let me
start with some statistics on our civilian Medical Officers to show the
extent of our problem. At least since 1999, we have been unable to
staff to requirements--reaching 43 percent of requirements in 1999; 57
percent, in 2000; and currently, we have on board only 45 percent of
our civilian Medical Officer requirements--in numbers, that is 352
Medical Officers of the 776 required to perform mission. Although we
experience a voluntary separation rate among our Medical Officers of
only 8 percent a year, 21 percent of our current population (75 Medical
Officers) is eligible to retire this fiscal year. During fiscal year
2000, we filled 52 Medical Officer vacancies; it took us an average of
160 days for each action. When we look at outside hires, bringing new
doctors into the Federal system, the time jumped to an average of 180
days each.
To further define the problem in terms of ``support staff'' for
physicians, I will discuss only a few of our civilian medical
occupations to make the point. We are staffed at 85 percent of
requirements for Physician Assistants, 75 percent for Registered and
Licensed Practical Nurses, 40 percent for Occupational and Physical
Therapists, 70 percent for Medical Technicians, 35 percent of
Therapeutic Radiological Technicians, 85 percent for Pharmacists, 50
percent for Optometrists; and 30 percent for Dentists. Only 7 percent
of our RNs are eligible for optional retirement this year; but we
experience a voluntary turnover rate (i.e. resignations and
retirements) among our civilian RN corps of approximately 15 percent a
year. Twelve percent of our Pharmacists are eligible to retire this
year; but our pharmacists leave us at a rate of around 12 percent a
year. So, as you can see, we face a growing recruitment and retention
challenge.
Historically, we've met many of our unfulfilled civilian
requirements with military personnel, but Army Transformation, MEDCOM
Optimization, and other strategic efforts are making this more and more
difficult. We make extensive use of a supplemental contractor force,
which serves some needs well--but overall, the contractor force is more
expensive and does not build a continuity of mission capability for us.
Here's what we're doing to help ourselves. We have dedicated an
Army civilian personnel cell to external recruitment for many of our
hard-to-fill medical occupations. We have increased our efforts to
bring separating active duty medical personnel into the civilian corps.
For example, we make full use of Veteran's Readjustment Appointments
and waivers of the 180-day waiting period after separation from active
duty before entry into the Federal civil service. We seek and apply
special pay rates and physician's comparability pay and special bonuses
for recruitment, relocation, and retention. We are working within
Department of Army and with Department of Defense to get permission to
use the Defense Priority Placement Program as a recruitment source for
our hard-to-fill medical occupations rather than a reactive mandatory
placement program. We are currently analyzing the Secretary's of
Defense Title 38 United States Code civilian personnel program
authorities that the Office of Personnel Management has delegated to
improve our ability to attract and retain a high performing civilian
Army medical corps.

OPTIMIZATION OF CARE

Question. Over the last year or so, there has been much discussion
about optimization of care as critical to providing an efficient and
effective medical benefit. What results have you achieved to date?
Answer. By optimizing the military health system, we can--
Increase physician satisfaction, retention, and readiness by
reducing the frustration our providers feel due to the shortages of
staff support and examination space provided at many of our aging
military treatment facilities. The optimization effort is directed in
part towards addressing these shortfalls and identifying the resources
needed to fix this unanticipated effect of personnel drawdowns and
funding cutbacks. The system works as well as it does today only
because of the dedication and selfless service of our military members,
civilian employees, and our many hospital volunteers.
Avoid cost shifting to MCSC by reducing the costs associated with
increased reliance on the private sector care. Increasing the direct
care system capabilities will minimize the risk exposure for both the
DHP and our managed care support contract partners. Because of our
current contractual commitments, cost shifting to our managed care
support contractors is a losing proposition for both parties since we
jointly share the financial risk of providing health care.
Deliver on our commitment to care for DOD beneficiaries by
increasing enrollment opportunities, improving access to our direct
care system, enhancing the spectrum of direct care services at our
MTFs, and improving patient satisfaction.
What have we accomplished so far?
We are incorporating state of the art advances in medical practice
into our facilities. Business case analyses are used to prioritize
funding for such advances as computerized liquid cytology systems to
reduce necessary visits for effective screening of cervical cancers and
for the deployment of the latest high resolution positron emission
technology scanners for localizing disease and planning precision
surgical operations.
We have completed a primary care model that allows a detailed look
at the staffing, facilities, and workload at our treatment facilities.
This model can be used to explore changes in staffing patterns as well
as to track productivity. Enhancements will tie changes in staff and
providers to changes in purchased care requirements and costs. This
will, in turn, facilitate business decisions about capital investments
and personnel assignments.
Optimization goals are built in to our strategic plan and our
balanced scorecard so all members of the Army Medical Department know
where our priorities lie. The optimization process directly supports
our overall goals and those of the MHS.
Question. General Bester and Admiral Martin have the Army or the
Navy had problems maintaining the credentialing of their staff's go to
war skills?
Answer. Go to war skills are required by the entire Army Medical
Department on a continuous basis. It is our mission to be ready to
support the country at a moment's notice if there is a need to exercise
the military element of national power. Our staff needs to be ready to
care for troops in the field and to be ready and fit itself. At the
same time, we must meet the highest expectations for quality, safe,
efficient and effective peacetime medical care at home and abroad.
Meeting both requirements requires balance.
The American people expect their sons and daughters in military
service to be cared for by fully trained and capable trauma teams in
the event of hostilities--in fact, in deployments for other
contingencies as well. The historically larger numbers of non-battle
casualties from disease also have been reduced to very small numbers by
the military medical system over the last few decades. This reduction
in morbidity and mortality depends in great part on the readiness
skills of our entire medical staff. Those skills include necessary
individual and collective military skills our medical soldiers need to
survive on the battlefield and to effectively take part in the overall
military campaign.
Inpatient census figures are down in the military just as in the
civilian sector. Fewer serious surgical cases are being done at medium
sized hospitals, and the staffs there are doing more outpatient, minor
surgical cases. The spectrum of injury and illness does not match that
seen in the combat zone. No medical professional society or
certification board has yet published a list of the minimum number and
type of cases that result in trauma care proficiency, although the
American College of Surgeons has some total volume guidelines for
hospital trauma centers. Using the expertise and experience of our
specialty consultants, we are now engaged in developing such
recommendations within the Army on this topic. Even before this process
is finished, we have begun establishing relationships with outstanding
civilian trauma centers so our trauma teams can train alongside their
staffs. For example, at Ben Taub General Hospital in Houston, surgical
teams from all services rotate regularly for refresher training in all
aspects of complex trauma resuscitation and immediate care. As another
example, we have expanded the training and curriculum of our medics so
they will be fully Emergency Medical Technician Basic certified as they
leave their advanced individual training and join their first unit in
the field.
Efforts to maintain the skills we need to reduce death and
disability and to keep ourselves effective on the battlefield are
Herculean. They take time away from delivery of peacetime health care,
and they take funding. With the smaller medical force today, our tempo
of operations is high and resulting stresses on families often lead to
voluntary separation from service of members who would have stayed for
a full and productive career previously. We will stay both competent
and ready, but the personal cost is high for our personnel and for
their families.
______

Questions Submitted to Rear Adm. Kathleen L. Martin

Questions Submitted by Senator Daniel K. Inouye

TRI-SERVICE NURSING RESEARCH PROGRAM

ADVANCED PRACTICE NURSES IN THE MILITARY

Question. There have been several initiatives mentioned today
regarding improvements to the Military Health System enabling better
care for our patient population, what specific role do Advanced
Practice Nurses have in this effort to improve access to care and
provide quality care?
Answer. Nurse practitioners and certified nurse midwives have the
most immediate impact on improving access. Frequently serving as
Primary Care Managers of a specified patient population, they assume
ongoing responsibility for the patient's health care needs. Key
components of their practice include health promotion, health
maintenance, patient education and counseling, and management of acute
and chronic illnesses.
Certified nurse anesthetists provide comprehensive anesthetic care
to their patients. They manage a wide variety of patients in routine
and complex situations on shipboard, and at stateside and overseas
military treatment facilities. Their superior specialized education and
clinical training, enables them to be the sole anesthesia provider at
many military sites.
Utilization of advanced practice nurses is crucial to a
comprehensive and integrated health services delivery system. By
increasing prevention and delivering the right care by the right person
at the right time, we increase health, decrease utilization, and expand
direct care system access to our active duty and other beneficiaries.
Question. What is the optimum career path for proper utilization of
nurse practitioners in the military?
Answer. While there is no one single, specific career path,
clinical management of patients is an expectation. Because each nurse
practitioner is also a military officer, nurse practitioners may assume
administrative positions including department head or director roles,
in addition to clinical duties when deemed to be best qualified. Some
nurse practitioners have also achieved a blended role as a clinician as
well as a leader in executive medicine including Commanding Officer.

OPTIMIZATION OF CARE

Question. Over the last year or so, there has been much discussion
about optimization of care as critical to providing an efficient and
effective medical benefit. What results have you achieved to date?
Answer. The Military Health System (MHS) Optimization Plan
integration was a Navy Medicine calendar year 2000 priority. Those
involved in integration efforts describe the time and energy committed
to concept education, management tool presentation, networking and
other related activities as well invested. Particularly noteworthy
during this period have been the heightened collaboration, cooperation
and teamwork within and across the Bureau of Medicine and Surgery
(BUMED) codes, field activities and operational forces. The following
are three of the highlighted tenets of Navy Optimization:

Population Health and Force Health Protection
The Navy Primary Care Optimization Model (PCOM) developed to assist
corporate and local level staff in calculating actual and potential
enrollment capacity provides baseline health system information.
Following the Spring 2000 data call, many commands report moderate
capacity increases through implementation of general capacity
improvements. The impact of the enrollment increase on private sector
care costs is yet to be determined.
Over 86 percent of enrollees have a Primary Care Manager by Name
(PCMBN), excluding Regions 1, 2 and 5 where contract modifications
delayed PCMBN implementation. Four scenarios are associated with PCMBN
assignment difficulties: (1) large tertiary facilities, (2) large
operational population, (3) gaps in provider coverage and (4)
credentialing delays.

Access and Patient Satisfaction
People, time, space and equipment are the primary means used to
increase provider availability, ensure appropriate utilization and
increase provider/clinic productivity.
Clinical support has been increased through resource sharing,
direct contracting, and internal staff reallocation. Staff additions
include appointment personnel, secretarial support and coders. The
recent transfer of operational control of the Naval Reserve medical
community to BUMED is expected to improve the ability to identify and
coordinate reserve support for both provider and clinical support
staff.
Time management techniques to increase provider availability
include reviewing collateral duties and committee structure to minimize
provider involvement; designating specific days and hours for command
wide administrative, training and meeting times; and establishing rules
to coordinate care team schedules (provider, nurse, corpsman).
To improve bookable hours, many commands have altered clinic hours
or changed appointing procedures. Navy Medical Clinic Patuxent River
favorably reports on open access appointing and several sites
implemented web-based appointing and other e-health initiatives to
improve patient access.
Many sites increased the number of provider exam rooms by
consolidating administrative spaces. Equipment investments to improve
efficiency include auto reminder systems for appointments, advanced
phone systems, mobile dictation, voice recognition technologies and
pagers for triage nurses.
Fleet/Marine Liaison programs continue to be further developed and
most commands report full time liaisons with direct access to senior
leadership. Proactive measures to identify and meet the health care
needs of operational forces include advance consult reviews, pier side
visits, senior leadership visits and appointing privileges for liaison
staff.

Business practice
A clinic management course has been developed that will incorporate
business rules, roles and responsibilities, data systems, population
health and template and schedule management. Its development has
prompted discussions regarding the definition/composition of clinical
teams and the level of detail needed in clinical and business
management processes. The course is now being presented to various
MTFs.
Navy Medicine Report Cards published in November 2000 include trend
measures for enrollment, capacity, utilization, private sector care,
productivity and satisfaction. Although formal procedures to monitor
and analyze the report cards are being developed, commands may now use
them to appraise their efforts.

Conclusion
Navy Medicine vigorously adopted the MHS Optimization Plan during
2000 and continues to acknowledge the alignment between the MHS
Optimization plan and the organization's Strategic and Annual Plan in
2001. In the coming months, the focus will be to: Sustain the momentum
and enthusiasm for optimization efforts, establish optimization as a
way of being and doing business, ensure continued advancement of those
initiatives and issues previously identified, and advance performance
measurement aligned with organizational goals and objectives.
Ongoing education and communication, both locally and corporately,
is a primary goal.
Clinical practice guideline development and implementation is a
near term imperative, as is the development of case management
programs. In the future, critical assessment of clinical practice and
policy is needed, as are efforts to begin specialty care
``optimization.'' Continued operational force integration and fleet
liaison support is also needed.
The first clinic management course is scheduled for March 2001.
Other business practice issues requiring ongoing attention,
particularly at the BUMED and HSO levels, include data quality and
standardized business rules, coding and billing procedures and reserve
integration.
Although optimization encourages change, it is not change for
change sake. Those leading change efforts must ensure efforts advance
the objectives of improved population health, increased enrollment,
increased capacity, decreased utilization, decreased private sector
care costs, increased productivity, and increased patient and provider
satisfaction. Performance targets and regular monitoring and assessment
will help ensure proper alignment between optimization efforts.
Question. General Bester and Admiral Martin have the Army or the
Navy had problems maintaining the credentialing of their staff's go to
war skills?
Answer. The wartime skill requirements are met through a variety of
training processes. Deployment skills are practiced on a routine basis
with the assigned deployable unit. Each unit has a training plan and
specific skills to accomplish for readiness. Trauma training is
available in a tri-service effort at the Joint Trauma Training Center
in Houston. Teams of specialists receive intensive trauma training to
develop and refine wartime skills. Some Navy facilities have agreements
with civilian medical centers to rotate staff through for critical
care, trauma training, or skill sustainment.
______

Questions Submitted to Gen. Barbara C. Brannon

Questions Submitted by Senator Daniel K. Inouye

TRI-SERVICE NURSING RESEARCH PROGRAM

Question. Last year because of congressional fiscal restraints the
Tri-Service Nursing Research Program had its budget for fiscal year
2001 decreased by one-third from the fiscal year 2000 level. What
impact has this had on its ability to conduct and support research?
What efforts have been made within DOD to obtain permanent funding?
Answer. In fiscal year 2000, Tri-Service Nursing Research Program
(TSNRP) funded 19 studies. Though awards have not yet been finalized
for fiscal year 2001, the decrease in funds will adversely affect the
number and complexity of research studies that can be funded. For
example, in fiscal year 2000, TSNRP was able to fund two sophisticated
and cutting edge telehealth studies. The 33 percent decrease in fiscal
year 2001 funding makes it highly unlikely that studies of similar
magnitude will receive funding.
TSNRP has been able to provide comprehensive administrative support
at much lower costs compared to other similar programs. A decrease in
the fiscal year 2001 budget may affect the programmatic oversight and
administrative support TSNRP will be able to provide its investigators.
There are approximately 80 active studies at the present time. Each
research study requires support ranging from monitoring progress to
ensuring regulatory compliance. Within the last two years, an
additional level of regulatory compliance has been mandated, adding to
this already burdensome process.
Earlier this year, nurse researchers, policy makers, and clinicians
(from the three services and representing both active duty and reserve
components) identified a variety of services that TSNRP could provide
to support research: (1) planning, conducting, and disseminating
research, (2) cultivating the pool of nurse researchers, (3) providing
vital outreach to junior nurses at small facilities, (4) and providing
resources to meet the Services' corporate needs. The decrease in the
TSNRP fiscal year 2001 budget means TSNRP will only be able to provide
very limited support for these essential services identified by the
Nurse Corps of all three Services.
Permanent funding for Tri-Service Nursing Research Program (TSNRP)
has been discussed at Uniform Services University of the Health
Services (USUHS) level. During the last two years, USUHS positioned
TSNRP as an unfunded program. Without continued support from Congress,
TSNRP is at risk for closure.

ADVANCED PRACTICE NURSES IN THE MILITARY

Question. There have been several initiatives mentioned today
regarding improvements to the Military Health System enabling better
care for our patient population, what specific role do Advanced
Practice Nurses have in this effort to improve access to care and
provide quality care? What is the optimum career path for proper
utilization of nurse practitioners in the military?
Answer. Advanced practice nurses are dedicated professionals who
provide high quality care to their patients as privileged providers.
Air Force Family Nurse Practitioners and Pediatric Nurse Practitioners
are Primary Care Managers, with an enrolled population that is often
larger than their physician counterparts.
Nurse Practitioners (NPs), used in their full scope of practice,
complement the physicians' practice by enabling the physician to focus
on those patients with more complex medical conditions. They perform
health histories and physical exams, diagnose and treat common acute
illnesses or injuries, and manage many chronic diseases. Patients
report high satisfaction with care by nurse practitioners, because of
their individualized attention and focus on health education, health
promotion, and illness/injury prevention.
Air Force Nurse Practitioners (NPs) are board certified in their
specialty and maintain strong clinical skills. Nurse practitioners
demonstrate their versatility in a variety of settings, from small
clinics to large medical treatment facilities. Once the NP becomes a
field grade officer, there is the opportunity to stay in the clinical
career path or to explore progression through an administrative/
management track. Our senior NPs can have a robust Air Force career in
clinical practice. Those who seek advanced leadership opportunities in
positions such as flight commander, squadron commander, and group
commander compete very favorably with senior clinicians from other
corps.

CIVILIAN HEALTH PERSONNEL RECRUITMENT

Question. In your testimonies today you have noted problems
maintaining enough physicians in the military, are there specific
issues or obstacles you face in reference to hiring civilian
physicians? Are there similar problems hiring enough support staff for
physicians?
Answer. According to the Directorate of Civilian Personnel's
Recruitment Branch at the Air Force Personnel Center (AFPC), Randolph
Air Force Base (AFB), Texas (TX), the biggest obstacle in hiring
civilian physicians and other support staff is the pay differential
from the civilian sector. For those civilian physicians who do consider
civil service, they express interest in not having to worry about the
business overhead costs and malpractice insurance necessary for private
practice.
The Recruitment Branch at AFPC stated another obstacle in
recruitment in a ``hot'' job market is that some individuals are
discouraged by the paperwork necessary for government hiring and opt
for opportunities with streamlined hiring procedures where recruiters
may fill out the paperwork for them. Some advances have been made
allowing individuals to submit a resume as opposed to standard forms,
but if mandatory data fields are not listed on the resume, AFPC must
contact the individual for the information. By the time this occurs,
the applicant may have accepted another job offer.
The Recruitment Branch has started to utilize e-recruitment avenues
to advertise and search for applicants. This may provide some relief to
identify job openings and search for applicants, but it is critical to
respond quickly and obtain necessary information from applicants. The
recruiters also mentioned it would be helpful if the job advertisement
was ``interesting'' and ``would grab someone's attention,'' rather than
read like a dull laundry list of job duties.

OPTIMIZATION OF CARE

Question. Over the last year or so, there has been much discussion
about optimization of care as critical to providing an efficient and
effective medical benefit. What results have you achieved to date?
Answer. The men and women of the Air Force Medical Service (AFMS)
have made significant progress towards shifting our health care system
from one of largely reactive sickness-based medical services into one
of proactive prevention-oriented health care where the needs and health
status of each individual within our population are assessed and
services are provided by the right person, at the right level and the
right time. Primary Care Optimization has changed the structure with
dedicated staff to support our Primary Care Managers (PCMs), and has
changed the process by assigning all enrollees to their own provider,
empanelling 1,500 patients to each PCM, implementing medical in-
processing, assessing the demand for services, enhancing the skill sets
of our support staff, and addressing prevention at every visit.
We have several milestones in place to track the process of our
clinical and business practice desired end states and these are tracked
and reviewed on a recurring basis. Enrollment notification process is
in place at more than 90 percent of our medical treatment facilities
(MTFs). Our ability to measure our outpatient workload is improving
with our BioData Quality Assurance System (BDQAS), and more than 90
percent of our 9 million visits are now being coded. We are well
underway to being able to compute our workload by provider based on
Health Care Financing Administration (HCFA) national tables. This will
allow us to track our reasonableness to the taxpayer in a much more
reliable manner.
We know the demographics of our enrolled population (some 1.3
million beneficiaries) and are able to assess the needs and modifiable
risk factors in our population. We know the chronic disease burden and
the number of visits our patients make so we can predict the demand for
our services and better manage our capacity. Our Preventive Health
Assessment and Individual Medical Readiness (PIMR) process helps us
deliver a fit, healthy, and ready force (our primary reason for being).
We are measuring health status improvement and health care
effectiveness and efficiency through common metrics in both clinical
and business areas. We have improved our screening of cervical cancer,
increased childhood immunizations, and improved our delivery of
prenatal care given in the first trimester, as a few examples. Our
providers use the DOD Clinical Practice Guidelines with associated
toolkits and metrics to track progress of standardized care.
Training is central to our success. In the last year, we've started
a population health epidemiology course to train our MTF personnel on
how to use centrally produced information sets. We will start our
primary care optimization (PCO) orientation course this spring and have
developed a course specifically for our group practice managers and
health care integrators. Our efforts to energize a total community
approach are also well underway with our Integrated Delivery System
(IDS) and the recent establishment of an AF level Community Action
Information Board (CAIB).
There are additional opportunities to improve as we look at more
accurate coding to realize better return on Third Party Collections,
decreasing preventable admissions, and decreasing lost duty time of our
active duty members through programs that help increase physical
fitness, decrease tobacco and alcohol use, and prevent injuries. Our
Air Staff and MAJCOM representatives have worked hard to formulate
sound executable policy and we've invested in a corporate population
health support division to ensure we support our MTF personnel as they
reengineer our health care delivery system. We are serious about this
matter and we've visited every MTF in the past year to evaluate their
progress and help them overcome barriers. The first round of Staff
Assistance Visits (SAV) is nearly complete with the identification of
many best practices. These will be incorporated into the next round of
SAVs that will focus on educational needs of the transitioning teams
and supporting the MTFs as they put reengineered processes into place.

SUBCOMMITTEE RECESS

Senator Stevens. Our next hearing will be on March 4th.
That is the intelligence briefing for the committee and it will
be closed for that purpose--March 14th.
[Whereupon, at 12:11 p.m., Wednesday, February 28, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MARCH 21, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
Present: Senators Stevens, Cochran, Shelby, Inouye, Byrd,
Leahy, Dorgan, Feinstein.

DEPARTMENT OF DEFENSE

North Atlantic Treaty Organization Issues

STATEMENT OF GENERAL JOSEPH W. RALSTON, COMMANDER-IN-
CHIEF, UNITED STATES EUROPEAN COMMAND

OPENING STATEMENT OF Senator TED STEVENS

Senator Stevens. Good morning.
Senator Feinstein, we welcome you as a new member of our
subcommittee. We are pleased to have you join us.
I begin by welcoming General Ralston to the subcommittee.
We thank you for the courtesy you extended to our delegation
when we were in Europe last month, and we have always
appreciated your candor and openness in responding to questions
and issues that are raised by our committee.
We are focusing today on the North Atlantic Treaty
Organization (NATO), where General Ralston serves as a Supreme
Allied Commander, as well as the Commander-in-Chief of the U.S.
European Command. A decade ago in a hearing, besides being
chaired by my good friend at that time, we have had speculation
about how much the former Soviet Union and the Warsaw Pact had
really changed. The notion of expanding NATO was a distant and
speculative issue, and our military was fresh from its
overwhelming victory in the Persian Gulf.
Today we face circumstances where the world around NATO has
changed dramatically, but our own military posture in the
Alliance has been stagnant and buffeted by repeated rotations
of personnel support mission in Bosnia and Kosovo. Secretary
Rumsfeld's strategic review, along with the mandated
quadrennial defense review affords us a unique opportunity to
examine and assess our presence and contributions to NATO. We
look forward to the Secretary's report.
General Ralston, we also look forward to your views today
and to working with you this year to ensure us that our
committee can respond to your needs and the requirements of
your command, which we do wish to do.
Senator Inouye.

STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. I thank you very much, Mr. Chairman. I wish
to join you in welcoming General Ralston.
About 52 years ago, NATO was formed. And there is no
question it has been a great success. However, today the
Alliance faces a very different situation. The Soviet Union no
longer exists, and many of our colleagues question the utility
and cost effectiveness of this organization and the requirement
to keep about 100,000 troops in Europe.
Others question why our forces are serving in Kosovo and
Bosnia and how these areas have come to be defined as vital to
the United States of America. Many of your supporters worry
about such diverse problems as how the European Union's
decision to create its own military will affect NATO, how you
can allow emerging democracies to join NATO without unduly
alarming the Soviets, how can you ensure that the acquired
immune deficiency syndrome (AIDS) epedemic in Africa does not
spread to NATO peacekeepers, how you can continue to maintain
Operation Northern Watch in the desert safely with increased
air traffic in Iraq.
Now, General, these are just a few of the issues I know you
face and it obvious that this list is a most challenging one.
Over the years we have all worked with you in a number of
capacities, and we know you are certainly up to the task. We
are fortunate to have you there. We look forward to hearing
your views on these many contentious issues. And once again,
welcome back to Washington.
General Ralston. Thank you.
Senator Stevens. Senator Shelby.
Senator Shelby. Mr. Chairman, I am going to have some
questions, but I will ask that my entire statement be made part
of the record.
I do welcome General Ralston and appreciate the job you are
doing, General. And it was also great to see you in Belgium,
always is.
General Ralston. Thank you, sir.
Senator Stevens. Senator Byrd?
Senator Byrd. I will reserve my time for questions. Don't
put too much emphasis on the word ``reserve.'' I will just pass
until we ask questions.
Senator Stevens. All right, sir.
Senator Feinstein.
Senator Feinstein. I, as well, Mr. Chairman, will reserve
my time for questions. I do want to say I am delighted to be on
this subcommittee. And I am delighted to see General Ralston
again.
Senator Stevens. Thank you.
General, we would be glad to hear you.
General Ralston. Thank you, Mr. Chairman. First of all, I
would like to submit my statement for the record.
Senator Stevens. It will be put in the record in full.

OPENING REMARKS OF GENERAL RALSTON

General Ralston. And then spend a few moments here talking
about some of our operations. But before I do that, I would
like to thank you, Mr. Chairman, and members of the committee
for your continued interest and for your trips to the area of
responsibility (AOR), where you come to visit the soldiers,
sailors, airmen and marines that are there trying to do their
job.

[Chart 1]

EUCOM'S AREA OF RESPONSIBILITY

I would like to start off with my first chart here.
Sometimes people get a little confused about the European
Command (EUCOM) AOR. It is really more than Europe. Notice in
the area in green is all of the EUCOM AOR. The yellow are the
NATO nations that are there.
But there are 91 countries in the EUCOM AOR. It goes from
the northern part of Norway through South Africa. It actually
goes further east than is noted there, because in the purple
area is Russia and the former states that were part of the
Soviet Union.
In our Partnership for Peace Program, Kazakstan,
Uzbekistan, Kyrgyzstan, and Turkmenistan are also members of
the Partnership for Peace. So we are engaged throughout a big
portion of the world. We have a little over 100,000 uniform
personnel in the AOR. And that is obviously one of the things
that will be reviewed under the review that is ongoing namely
what the appropriate number of forces that you should have
forward based in the EUCOM area and in the Pacific Command
(PACOM) area.
I would point out for the committee that we have about 8
percent of the uniform personnel in our military stationed in
EUCOM. And I would at least make the argument that 91 countries
and all of the activities that we are doing with those 91
countries, 8 percent of the uniform military is not too much to
pay for that.
I would also point out that from a geographic point of view
those 100,000 troops that are forward based in Europe are also
very close to the Middle East. And if my colleague, General
Franks, needs help in the U.S. Central Command (CENTCOM) AOR,
then I have forces that are much closer there than if they were
stationed here in the United States.
I would like to talk to you about some operations that we
have ongoing, where there are either hostilities currently
happening or the potential for hostilities, where American
servicemen and women's lives are at stake.

[Chart 2]

OPERATION NORTHERN WATCH

First I would like to talk about Operation Northern Watch.
Operation Northern Watch is the activity that we have ongoing
out of Turkey over Iraq. And here is a map. You can see
Incirlik Airbase is where our forces fly from. It is about an
hour flight to the east until they get to the area where the
little orbits, the little circles, are.
It is quite an operation. If you will notice over here, a
typical mission may have 40-some airplanes involved. That is
fighters, tankers, Airborne Warning and Central System (AWACS),
all of the various things it takes to make that happen.
They will be in those orbits that you see. And then the
fighter aircraft that enforced the no-fly zone come down to the
36th parallel. Now you will notice a black line through there.
One of the difficulties that we have is, many of the nations
are not abiding by sanctions that the United Nations (U.N.) has
imposed. Airliners will go down through that area while we have
an operation ongoing. That is something that obviously is a
fact that we have to take account of.
I might outline the magnitude of the activity. Last year,
the year 2000, we flew 7,500 sorties in Operation Northern
Watch. Now this is just the northern part of Iraq operation and
does not include the south. We were fired upon during those
missions over 250 times. We responded to protect our forces
over 60 times. That is more than once a week.
Now the reason I point this out is that in every one of
these missions there is a risk to American forces. I am not
arguing that we should change the policy. That is not my
message at all. We should carry out our policy as articulated
by our leaders. But I do not want anyone to think that this is
a risk-free policy. We have been flying single engine airplanes
over Iraq for 10 years now.
And under the law of averages, we should have had engine
failures by this time and have lost people over Iraq due to
engine failures. I just do not want anyone to be surprised if
that happens at times. It is a risk we take. We willingly take
that. But it is something that I would like to point out.

[Chart 3]

BOSNIA

Next, I would like to talk about Bosnia for a moment. There
is a lot of discussion about Bosnia. And I think sometimes we
forget that a lot of progress has been made. If you look at
this chart here, the blue bars are the number of troops that we
deploy to Bosnia with. If you go back to 1996, we had 60,000
troops that went into Bosnia. The area in red are U.S. forces.
U.S. forces, we had 20,000 or 33 percent of the effort.
Now over the years, as the situation has improved there, we
have drawn down the forces that we have in Bosnia. And if you
will notice where we are today, in early 2001 I have gotten
approval from the administration and from NATO that we can do
some further draw-downs. And here by next month we will be
slightly less than 20,000 overall. The U.S. contribution to
that, about 4,300 today, will be going down to 3,500 and 18
percent of the effort.
So there is a misperception sometimes in people that I talk
to that think that the United States is carrying the bulk of
the effort in Bosnia. I would just like to point out for the
committee here we are 18 percent of the effort, and we have
had, I think, a good track record of bringing the forces down
as they are no longer needed. I would like to continue that
effort as we go on.

[Chart 4]

Next, Kosovo. A similar effort in Kosovo. The blue line
that you see there is, in 1999 we had 47,000 troops assigned to
that effort. The United States was about 7,000 or 15 percent of
the effort. Today in all the effort, in the 42,000 number that
you see there, is Kosovo and Macedonia, by the way, the U.S. is
about 5,500 people inside Kosovo. And we are about 13 to 14
percent of the effort.
So once again, the other allies, I would contend, are
carrying the bulk of the load. But it is important for the
United States to share the leadership and show the leadership
of this operation.
I know there is a lot of interest in Kosovo and Macedonia.
And I thought I would spend a couple minutes on that, if I
could.
If you could give me the chart with the map. No, the one
behind you with the blue on it.

[Chart 5]

ETHNIC DEMOGRAPHICS

Mr. Chairman, if you can see the map that I have there,
notice the area of Kosovo. And to the east and south of Kosovo,
I have colored in the map with a dark blue/purple color there.
That is Former Yugoslavia Republic of Macedonia (FYROM).
Senator Byrd. Mr. Chairman, we cannot see this blue
section.
Senator Stevens. We will move that around.
Senator Byrd. Thank you.
General Ralston. Mr. Chairman, if I could stand here for a
moment, this is Kosovo right here. Montenegro, Albania,
Macedonia down here, and Serbia up here. The area in blue is an
area where the Albanian population exceeds 50 percent. And you
have Albanians obviously in Albania. Ninety-five percent of the
people in Kosovo are Albanian.
And even in Serbia, in the area in blue, the eastern part
here, over 50 percent of the population is Albanian. And in
Macedonia all down here is greater than 50 percent Albanian.
The capital of Macedonia, by the way, is right in the middle of
that area. The ethnic overall mix of Macedonia is about 35
percent Albanian and about 65 percent Slavic.
Now the area in Kosovo right now, I think, is in basically
pretty good shape. We are making good progress in Kosovo. We
are very pleased with that. Not all the problems have gone
away. There is still many centuries of hatred that have to be
overcome. But for 95 percent of the people inside Kosovo today,
they are far better off today than they were 2 years ago or 5
years ago or 10 years ago. If you happen to be part of the 5-
percent minority, life is not good today. And that is something
we have to continue to work on.

GROUND SAFETY ZONE

We are in the process of returning this red area, called
the Ground Safety Zone. This was a zone that was set up when we
went into Kosovo to keep the Yugoslav army from threatening the
NATO troops, the Kosovo Force (KFOR) that was there. We put a
5-kilometer-wide zone that we did not allow their troops tanks
and artillery in there as a force protection method.
As we have had continued democratic change in Belgrade, the
chances today of the Yugoslav army attacking the KFOR forces, I
think, is very slight. And because of that, we are relaxing the
conditions and allowing the Yugoslav forces to come back into
that Ground Safety Zone, so that they can take care of the
extremist activities that have been going on in there.

CONFLICT ON KOSOVO/FYROM BORDER

The activities itself--and I have a map, if we could pass
those maps out to the members, please. You will see on this
terrain map that you are about to get, this is looking from
south to north, down here, back up into Kosovo. You will see on
there the City of Skopje that is the capital of the former
Yugoslav Republic of Macedonia.

[Chart 6]

Senator Stevens. Orient that to this map, will you, please,
General?
General Ralston. Right down here. The capital of the
country, Skopje, is about where my finger is inside the blue
here. And you will see there is a route, a valley, if you will,
from Skopje up into Kosovo. Now today we have about 3,000 of
the KFOR forces that are stationed in the Skopje area. These
are logistics troops, supply troops, because all of our
supplies come up from Greece through Macedonia on up into
Kosovo.
You will notice in the high mountains to the east and to
the west of that supply route are two areas circled in brown.
And that is where the Kosovo, or--I am sorry--the Macedonia/
Albanian extremists are operating. The numbers are relatively
small, but it is something that is a problem and that the
former Yugoslav Republic of Macedonia is working on.
I would be happy to answer any questions that you have
about that map, if you would like to ask, as we go on into the
hearing.
Senator Stevens. Do you have forces near those two brown
circles, General?
General Ralston. No, sir, we do not. We have logistics
forces in Skopje. One of the issues that we have is that as our
supply convoys go up that route to go between those two
mountainous areas, we obviously have to reinforce them with
troops.
Senator Stevens. And the orange spiked area is where the
Albanian insurgents attacked in February and March of this
year.
General Ralston. Yes, sir, that is correct.
Senator Stevens. Have those been intensive?
General Ralston. If you happen to be at the receiving end
of it, yes, sir.
Senator Stevens. Any numbers of people?
General Ralston. Our estimate of the extremist is something
on the order of 200-300 people. Now, it may be slightly more
than that. That is something that is very difficult to do. One
of the issues you have is you have that heavy Albanian
population that is there in Northern Macedonia. There is
support for some of the extremists' efforts.
We are trying to get the word to all of the moderate and
responsible Albanian parties that this does their cause no good
whatsoever to be carrying out attacks against the government of
Macedonia, which is a democratically elected government that
does have Albanian participation in the coalition of the
government.
Senator Stevens. I interrupted you. Are you finished,
General?
General Ralston. I have two quick comments, Mr. Chairman.

FUNDING FOR REAL PROPERTY MAINTENANCE MILITARY CONSTRUCTION

As we go through this upcoming budget process, I would like
to inform the committee that I have two problems in the EUCOM
AOR, only two that I brought forward, that I talked to the
Secretary of Defense about, the Defense Resources Board, all
the Joint Chiefs. For many years, our real property maintenance
and our military construction in the European theater has not
gotten the attention that I think that it deserves. Now there
are a lot of reasons for that.
As we withdrew our forces from Europe back in the early
nineties, we went from 360,000 troops to a little over 100,000.
It was a responsible thing to do at the time to say, let us
take a timeout here, let us not spend a lot of money on
facilities until we figure out exactly where we are going to
stay. But, Mr. Chairman, we did that for the better part of the
decade. And I would like to show you some pictures here of what
that has resulted in.

[Chart 7]

BARRACKS AND MILITARY FAMILY HOUSING

We have our barracks and our military family housing that
is just not in the standard that we should be providing for our
American servicemen and women that are serving their country in
Europe.
Next slide, please.

[Chart 8]

Our military family housing. The standards we have set for
our military family housing, I would submit to you, are not
excessive. And let me briefly outline those. We have said if
you are a family with the number of children that would qualify
you for a three-bedroom house, we have said that we believe you
should have two bathrooms in that three-bedroom house. We
believe in the kitchen that you should have a stove and a
refrigerator, and we believe you should have a washer and a
dryer in that house.
Now I do not believe that the American people would think
that what I have just outlined to you is excessive. But I must
tell you that 69 percent of the Army families that are living
in EUCOM today are living in housing that does not meet those
standards that I just outlined. And I do believe that we need
to do better than that.
These two issues I took to, as I say, the Secretary of
Defense. And I do not know what is in the budget right now. I
know that we got a sympathetic hearing at the time. And I would
just request the support of the committee when that budget
comes over to you.

PREPARED STATEMENT

Mr. Chairman, that is all I have. I will certainly
entertain any questions that you may have.
[The statement follows:]

Prepared Statement of General Joseph W. Ralston

INTRODUCTION

Mr. Chairman, distinguished members of the Committee, it is my
privilege to appear before you as Commander in Chief, United States
European Command (USEUCOM), to discuss the posture of U.S. Forces.
First, however, I want to make a few comments about the area in
question.
The U.S. European Command encompasses American military activities
in over 13 million square miles of the globe and includes 91 sovereign
nations. It stretches from the northern tip of Norway to South Africa,
and from the Atlantic seaboard of Europe and Africa, to parts of the
Middle East and out beyond the Black Sea.
I began my tenure in the U.S. European Command last May. Since my
arrival, our men and women have continued to carry out a multitude of
operational commitments throughout Europe, Africa, the Levant, the
waters of the Mediterranean, the skies over Iraq, and throughout the
Balkans in support of the North Atlantic Treaty Organization (NATO),
commitments to our regional friends and allies, and our national
interests. Additionally, there are new opportunities in this Theater--
opportunities that properly approached will further strengthen the
international position of the United States. These opportunities
include working with African allies to improve their peacekeeping
capabilities, engagement with Russia and the countries of the Caucasus
region, U.S. influence on the evolving European defense posture and the
future of NATO, and the enhancement of important and vital interests to
the economic and national security of the United States. Our forward
presence in Europe, engagement programs in Africa and Eastern Europe,
and the ability to deploy and respond quickly and effectively
throughout the region contributes to the preservation of stability
throughout much of the Area of Responsibility (AOR).
While success should be acknowledged, we must exercise continued
vigilance by pursuing modernization to meet ongoing requirements, as
well as develop future forces to take advantage of key strategic
opportunities as they arise. Inadequate funding for, and attention to,
critical readiness and modernization issues will jeopardize the careful
balance between USEUCOM's missions and available resources. Like
Operations and Maintenance (O&M) dollars, modernization funding must
also be balanced to ensure resources remain proportionate to mission
requirements. American military personnel positioned overseas and going
about the business of the nation everyday have proven time and again
that they are our greatest national resource. Like every national
asset, they require care and cultivation to ensure they maintain the
capability edge over any potential adversary. Addressing critical
quality of life, military construction (MILCON), real property
maintenance (RPM), and modernization needs is central toward
maintaining this edge.
During my comments today, I will discuss the status of many
programs. I should note, however, that the programs I will discuss, and
their associated funding levels may change as a result of the
Secretary's strategy review that will guide future decisions on
military spending. The Administration will determine final 2002 and
out-year funding levels only when the review is complete. I ask that
you consider my comments in that light.

A CHANGING AND CHALLENGING STRATEGIC ENVIRONMENT

Readiness
Readiness of USEUCOM assigned forces is my top priority. It is the
cornerstone of our ability to respond to crises and it enhances our
strategy of engagement. Most of our activities relate to readiness
because they demonstrate and enhance our capability to deter potential
adversaries, while reassuring our friends. Such activities require
ready forces and exercise our ability to meet commitments and promote
joint and multinational interoperability. Taken together these
activities can serve to help shape the international environment by
incorporating other nations and improving our multinational expertise
in the region; they improve our ability to respond unilaterally or in
concert with other nations; and they prepare us now for the uncertain
regional requirements of the future.
Thanks to the support of Congress, forces assigned to this Theater
are ready and well supported in their current operations. The command's
forces are fully engaged and continue to rely upon augmentation and
reserve forces to carry out our many diverse missions. Dedicated young
men and women valiantly executing a wide variety of operations to
support our national strategy make up the heart of our theater
readiness. Over the last year, we demonstrated our readiness by
supporting air operations over Northern Iraq, NATO-led peacekeeping
operations in Bosnia and Kosovo, humanitarian relief operations in
Mozambique, and training of Sub-Sahara African troops to support United
Nations (U.N.) operations in Sierra Leone.

Joint Training
Training is a primary pillar of readiness and an inherent
responsibility of being in command. For USEUCOM, readiness training has
increasingly become part of our Theater Engagement Plan. However, over
the past two years efforts to cope with rapidly shrinking training and
training-dependent budgets, such as strategic lift, have resulted in
several cancelled and restructured exercises. These cancellations have
frustrated our efforts to provide high-quality readiness training to
meet Theater engagement needs.
Our challenge is to support a proper mix of readiness and theater
engagement training within resource constraints. The U.S. European
Command has met its Congressional mandates for Chairman of the Joint
Chiefs of Staff (CJCS) exercise-related operations and personnel tempo
(OPTEMPO-PERSTEMPO) reductions. Additionally, strategic lift funding
cuts during this fiscal year may force cancellation of continental U.S.
(CONUS)-based participation by Active, Reserve, and National Guard
forces in various training and engagement exercises. In a worst case
scenario, these cuts may also reduce training and engagement in Israel
and Nigeria, and result in cancellation of half of the Joint Combined
Exchange Training (JCET) activities in Africa.
After taking a hard look at our training program for potential
improvements in quality, effectiveness, and efficiency, we began
implementation of a three-year transition plan to take USEUCOM from a
training program focused on events, to one focused on readiness and
Theater engagement objectives. This revised program will exploit
opportunities within the total program, resulting in fewer, but higher
quality CJCS-sponsored exercises. I do not anticipate that this
transformation of USEUCOM's part of the CJCS exercises in fiscal year
2002 and beyond will result in a significantly less costly program. A
requirements-based objectives-driven exercise program will however,
provide higher quality training and engagement at a size and cost that
is appropriate to, and justified by, our National Security Strategy.

ENGAGEMENT

Side-by-side with readiness activities are the other exercises,
operations, and training which focus primarily on assisting and
supporting other nations in the region to develop effective democratic
political and military systems.
To help guide Congress in its decision-making, many of you have
traveled to the European Theater and have witnessed efforts to extend
contacts beyond Western Europe through engagement. Over the past
several years this process has helped to positively shape our security
environment. I believe this approach is key to continued long-term
peace, security, and prosperity as USEUCOM works along side, and in
active cooperation with, a number of governmental and non-governmental
organizations.

Forward Presence
America's permanently stationed forces in Europe number just over
100,000 troops--down from well over 300,000 during the Cold War. The
current force level represents a 65 percent reduction from 1990. In my
opinion, this must be considered the minimum level needed to execute
our current National Security Strategy, meet NATO requirements, and
provide support and staging for U.S. based forces that in time of need
would flow into or through the Theater.
Key to our engagement efforts are our forward-deployed and forward-
based forces, which continue to make significant contributions in
protecting U.S. national interests. In peacetime, forward presence of
naval, land, and air assets provides unparalleled access to countries
in transition. In crises, the forward presence of our forces enables a
rapid transition from engagement to response. Forward presence is a
critical enabler for USEUCOM activities.
Continued forward presence is vital to implementing our current
strategy, as our forces are able to respond more quickly--demonstrated
through a number of deployments last year to the Balkans, Southwest
Asia, and Africa. Surrendering this forward position would seriously
degrade our ability to engage in peacetime or deploy in the event of
armed conflict. The General Accounting Office (GAO) traveled through
the AOR recently to discuss issues related to forward basing. Their
report is due for release this spring and I believe we presented solid
evidence of the benefits of forward basing.

Defense Cooperation and Security Assistance
Defense Cooperation and Security Assistance programs are vital
components of Departments of State and Defense initiatives supporting
the development of interoperable defensive capabilities, the transfer
of defense articles and services, and the international military
training of foreign military and civilian personnel. Through the medium
of 38, and soon to be 40, Offices of Defense Cooperation, we are in
partnership with U.S. Embassies throughout the Theater conducting
primary military engagement in support of American foreign policy
goals.
Defense Cooperation in Armaments (DCA) promotes vital security
interests through enhanced cooperation among key defense industries,
and between DOD and West European Ministries of Defense. DCA encourages
the development of interoperability on the ``drawing board'' and
inherently strengthens U.S.-European military and political
relationships.
Likewise, Foreign Military Sales (FMS) of $4.7 billion in fiscal
year 2000 to Europe demonstrates the continued primacy for U.S.
security interests of Trans-Atlantic defense relationships. FMS
encourages interoperability between U.S. and European forces, maintains
a strong U.S. presence in the development and implementation of the
Defense Capabilities Initiative (DCI), and helps modernize the
militaries of new friends and partners in ways critical to our security
interests. We in Europe work closely with the Defense Security
Cooperation Agency and the Services to ensure that U.S. European
Command priorities are reflected.
Foreign Military Financing (FMF) provides irreplaceable resources
for our friends and allies, without which U.S. influence over the
dynamic transformation of Central and Eastern Europe and key African
partners would be affected. The program provides access to U.S.
expertise in defense restructuring and management, and enables
participants to acquire U.S. military goods, services and training. The
new NATO members and the stronger aspirants for membership provide
excellent examples of the value of this program.

International Military Education and Training
I cannot overemphasize the importance of International Military
Education and Training (IMET) as an integral component of long-term
beneficial change in foreign militaries, as foreign military and
civilian leaders encounter firsthand the American civil-military
culture. The priorities of the program are professional development,
the role of the military in a democratic society (under the Expanded
IMET initiative, or E-MET), and English language development. In fiscal
year 2000 the program trained almost 1,500 military and civilian
international students in U.S. military schools, with nearly 550
officers attending professional schools--including senior and
intermediate service schools. Under E-IMET, Mobile Education Teams
(MET) traveled to 30 countries in the region last year providing
instruction to over 2,000 civilian and military personnel in military
justice and human rights, civil-military relations, health resources
management and integration, defense resources management and budget
planning, equal opportunity, and maritime counter-drug law enforcement.
Student projections for this year match last year's numbers.

Partnership for Peace
The Partnership for Peace (PfP) Program continues to meet its goal
of deepening interaction, extending stability in the East, providing
consultation mechanisms for participants who feel threatened, assisting
in the pursuit of democratic reforms, and preparing for possible NATO
membership. The program has returned huge dividends for operations in
Bosnia, with over 30 nations providing support and nearly one-third of
the forces coming from non-NATO nations. The growth of the PfP program
over the past six years has been dramatic and, in addition to real
world operations, Partnership exercises provide superb training and
equally important exchange opportunities.

Joint Contact Team Program
The Joint Contact Team Program (JCTP) has been one of USEUCOM's
most successful engagement programs over the past nine years. Through
modest investments of money, personnel, and expertise, it has helped
host nation militaries become familiar with the culture of the U.S.
military, and through this process exposed to the best in American
values and democratic ideals. By leveraging the expertise of America's
active and reserve forces, especially the unique capabilities of the
Reserve Component's (RC) State Partnership Program (SPP), JCTP has
modeled and demonstrated the best practices of America's military
force. It has thus helped host nation militaries move toward providing
constructive roles to their developing democracies.
The program's success is most evident in the three new NATO member
countries. Poland, Hungary, and the Czech Republic's needs have matured
beyond familiarization and exposure--they are ready to ``graduate''
from JCTP. Their needs must now be met with additional services and
technical training properly administered under U.S. Security Assistance
programs and plans are now being formulated to move beyond JCTP. Where
possible, links to their SPP states will be maintained to facilitate
this transition.
This natural transition in the new NATO countries is the
realization of USEUCOM's Theater Engagement Plan and is the eventual
goal for all of the JCTP countries. This transition also allows the
program to move, by close coordination with the U.S. Department of
State, to new host nations requesting the unique engagement
capabilities available through JCTP.

State Partnership Program
A key program in this important engagement effort is the Reserve
Component's State Partnership Program. SPP grew out of JCTP and uses
reserve personnel from various National Guard and reserve organizations
to partner with defense ministries of Central and Eastern European
countries. Last year was extremely successful as National Guard
soldiers and airmen conducted dozens of events including 51 Minuteman
Fellowships (MMFs), nine ``Guardex'' events, six PfP as well as several
``In the Spirit of Partnership for Peace'' exercises, executed more
than 25 percent of all events for USEUCOM JCTP, facilitated civic
leader visits, and conducted a number of engagement activities with the
Russian Federation. The MMF program bridges gaps in other engagement
programs and touches levels of society that other programs cannot
reach. Through this program we were able to share with our partners our
experience and expertise in education, economic development, disaster
response, environmental topics, and numerous other subject areas.
When delegations from Tennessee, Minnesota, Indiana, Alabama,
Vermont, Illinois, Kansas, and California conducted civic leader visits
to SPP counterpart countries, the long-term vision for SPP had been
realized--moving beyond military-to-military contacts into other
important elements of society. Through these activities, state civilian
officials in the realms of education, commerce, agriculture, medical
emergency services, and disaster response exchange their considerable
knowledge and expertise with their partner-nation counterparts.

Marshall Center
One of the most important and effective regional engagement
activities within the U.S. European Command is the George C. Marshall
European Center for Security Studies. The Marshall Center strengthens
security and cooperative relationships among key nations within the
Theater. It serves as an essential institution for bilateral and
multilateral communication and military and civilian exchanges
throughout the region.
This organization builds bridges between militaries that once
stared at one another through the crosshairs of weapons of war. Under
the auspices of the Marshall Center, the once-warring parties of Bosnia
came together last year and agreed to slash military spending. Marshall
Center graduates have served as peacekeepers in Bosnia and as far away
as East Timor. Graduates from Hungary, Poland and the Czech Republic
are now helping to integrate their militaries into NATO. Marshall
Center programs have led a number of nations to the democratic
restructuring of their defense planning and crisis management
processes. Graduates from the Republic of Georgia wrote Tbilisi's
recently announced national security strategy. Many Marshall Center
graduates now serve as ambassadors, defense attaches, chiefs of
defense, members of parliament, and advisors to presidents around the
world. These graduates possess a deeper appreciation and respect the
concepts of democracy as we understand them, and for human rights and
the rule of law.
The Marshall Center is at the forefront in reaching out actively
and comprehensively to militaries and defense establishments to lower
regional tensions, strengthen civil-military relations in developing
nations, and addressing critical regional challenges. Open to leaders
from over 47 countries, the Marshall Center is a pillar of America's
efforts to shape the world in ways that reinforce and reflect our
values and national security interests. It is therefore important that
the Marshall Center remains fully resourced in order to continue its
excellent work in support of American foreign policy objectives.

The Africa Center for Strategic Studies
Drawing on the success of the Marshall Center, the Africa Center
for Strategic Studies (ACSS) was established in December 1999 and
conducted its second seminar last July in Botswana. While it does not
yet have a permanent location to call home, its rotating seminars
provide a unique engagement vehicle in Sub-Saharan Africa. Both
civilian and military senior defense officials of almost every African
nation gather with U.S. and other friendly nation counterparts to
examine and compare experiences on national security strategy, defense
economics, and civil-military relations. They then validate their
impressions in an end of session capstone exercise. Its forum of open,
two-way discussion has enjoyed great success on the continent and
builds and strengthens bilateral and multilateral relationships.

Near East-South Asia Center for Strategic Studies
In January a year ago the Secretary of Defense approved the
establishment of the Near East-South Asia (NESA) Center under the
management of the National Defense University (NDU), Washington D.C.
The purpose of the Center is to enhance regional stability by providing
an inclusive, neutral institution where regional military, diplomatic,
and national security professionals can broaden their understanding of
the national strategy formulation process, examine regional security
issues, improve their defense-related decision-making skills, and
develop cooperative relationships with one another. Participation is
open to military and official civilian representatives of all countries
within the NESA region with which the U.S. Government maintains formal
diplomatic relations. It is also open to non-NESA countries that have
strategic interests in the NESA region. The inaugural two-day
conference was held at NDU in November, and the first executive seminar
will be held in Washington during May.

African Crisis Response Initiative
The African Crisis Response Initiative (ACRI) is a Department of
State training program designed to improve the capabilities of several
African nations to conduct humanitarian crisis response and
peacekeeping operations. ACRI trained forces could be offered by their
governments for peacekeeping and humanitarian operations conducted by
the Organization of African Unity, the U.N., sub-regional African
organizations, or any other multinational coalition. ACRI also works to
shape the African environment by promoting professional and apolitical
militaries, reinforcing respect for human rights, and providing a
strong example of democratic civil-military relations. This U.N.-
approved program of instruction combines U.S. and U.N. peacekeeping and
humanitarian relief operations doctrine. Program instruction develops
common standards for peacekeeping and humanitarian relief operations
among the participating ACRI countries. Recently, the program was
expanded to include brigade-level training focusing on the command,
control, and logistical aspects of supporting a multinational brigade
in the field.

Operation Focus Relief
Last year USEUCOM was tasked to help train five Nigerian
battalions, one Ghanaian battalion, and one Senegalese battalion in
order to participate in U.N. operations in Sierra Leone, and more
strategically, to support the professional development of the Nigerian
military--an important force for regional stability. This Operation is
being conducted in fiscal year 2001 using State Department peacekeeping
operations (PKO) funding as well as DOD resources made available under
Presidential Drawdown authority.
To accomplish this mission, Special Operations Command, Europe
(SOCEUR) was tasked to execute the mission with Army and Air Force
units in support. Based on information provided by the SOCEUR-led
Military Survey Team, a ten-week training program using U.S.
instructors and an equipment support package was developed. Execution
of the train-and-equip program was designed for three-phase completion,
commencing last October, with mission accomplishment likely later this
year. Upon completion of the training program, each battalion should be
capable of operating and maintaining newly acquired equipment,
conducting daylight company level attacks and conducting day and night
defensive operations as a maneuver company under command and control of
a battalion headquarters.
We have now completed phase one of the three-phase program and our
personnel have performed magnificently. However, interagency policy-
level decisions must be made early enough in the process so funding and
resources can be programmed to meet timelines and support requirements.
Additionally, human rights vetting must be complete for all personnel
to be trained, to include attached units, prior to the initiation of
training. There must also be host nation agreement on the training
program at every political and military level in order to assure
mission success. Operation Focus Relief is not an operation without
risk. However, with only 200 plus U.S. personnel assigned in non-
combatant roles, the dollar investment is minimal and the payoff great
in that it is successfully training local forces to deal with regional
problems. In this way, Operation Focus Relief is pioneering a new
method of engagement.

KEY THEATER MISSIONS AND CHALLENGES

Challenges in the USEUCOM AOR will continue as the U.S. works to
strengthen and maintain the NATO structure, prepares forces to better
respond to future conflict, shapes the international environment
through engagement, executes contingency operations, and monitors
potential future conflict areas. I have highlighted key challenges and
continuing missions below to give an idea of the diversity of Theater
challenges and missions.

Multinational Interoperability
``The overall effectiveness of multinational operations is * * *
dependent upon interoperability between organizations, processes, and
technologies.'' Joint Vision 2020

The U.S. European Command and America's allies and friends
recognize that most military operations in the future, from
peacekeeping and humanitarian relief to a major theater war, will
typically be multinational in character. Success in multinational
operations will depend on two factors: the capabilities of the national
forces involved in the operation; and the degree to which these forces
can be melded to create an effective force. These factors will demand a
high level of interoperability and enhanced capabilities between the
participating national forces.
In this vein NATO has met and excelled at every challenge since the
end of the Cold War precisely because of its ability to commit
multinational forces structured to meet military threats to its
members. NATO's greatest challenges today originate not externally, but
from within. The growing asymmetry in technology between European and
U.S. military forces is producing a serious imbalance in our military
capabilities. Furthermore, Europe's shrinking defense industrial base
and limitations in production of advanced military capabilities could
lead to a future where only the U.S. has the ability to engage
globally.
The Defense Capabilities Initiative, launched in April 1999, is an
effort by the European members of NATO to resolve glaring capabilities
shortfalls between them and the U.S. as evidenced by past NATO
exercises and Operation Allied Force in and over Kosovo. The
Capabilities Initiative's two primary thrusts, improving national
capabilities and exploring ways to pool capabilities, allow our allies
and partners to enhance interoperability, take advantage of economies
of scale, and afford participation by those countries that do not
possess the resources to go it alone. The initiative specifically
targets five capabilities: effective engagement; deployability and
mobility; survivability of forces and infrastructure; sustainability
and logistics; and communications/information systems. As Europeans
work to improve their national and collective security, we have
encouraged defense cooperation and procurement using the DCI roadmap
and believe it mutually reinforces the needs of NATO and the European
Union (EU).
The DCI's success depends upon whether Europeans are willing to
spend more, and more wisely, in narrowing the gap between their
military technology and warfighting capability, and our own. Should
Europe prove unable to engage in military operations at or near the
level of U.S. capabilities, it may leave them vulnerable and limit the
U.S. in some cases to unilateral action. Such a future undermines
America's strategic vision and assumptions--diplomatically,
economically, and militarily. Finite resources and domestic political
realities dictate that unilateral action cannot be the future norm.
Unilateral action endangers the historical link between the American
and European peoples. While the issue of DCI is being worked at the
highest levels in NATO, it is critically important that the Congress
work to engage their European counterparts on this issue. The U.S. must
continue to engage with its European allies to help foster the
necessary changes to enable Europe to remain a contributing strategic
partner across the spectrum of potential operations. DCI is a crucial
area on which the future of a strong Trans-Atlantic link may very well
depend.

European Union and NATO Security Structures
The establishment of a common foreign policy, supported by a
military capability, within the EU is one of the most important
political-military issues facing Europe and the United States today.
The European Security and Defense Policy (ESDP) is worked hard,
continuously, and at presidential and prime ministerial levels in every
capital in Europe. If the military and political links that eventually
define the relationship between NATO and the EU do not result in
transparency, coordination, and a cooperative effort, it places at
serious risk the future of the Alliance. Indeed it is the form these
permanent arrangements between the two will take, and assured EU access
to NATO's planning capabilities, that are the most contentious and
potentially destructive questions currently under debate.
The recently completed Foreign Minister's meeting in Brussels was
not able to reach agreement on these issues and will require much
effort by the new Administration. We believe that SHAPE headquarters
can play a constructive and indispensable role by accomplishing the
future military planning for both organizations, thereby negating the
need for a duplicative headquarters solely to support the EU.
The European Security and Defense Identity (ESDI) within NATO
continues to evolve within U.S. redlines as the EU develops, through
the ESDP, both capabilities and institutions for its security and
defense aspirations. Even though the progress to date has generally met
U.S. expectations, I would suggest that officials in Washington remain
vigilant to ensure that ESDP remains relevant from a U.S. perspective.
They should emphasize the requirement for Europeans to develop their
capabilities, maintain NATO-EU linkages, and underscore the necessity
for the inclusion of non-EU NATO members in emerging security and
defense arrangements.
Successful implementation of the European Security and Defense
Policy within the European Union will require a concerted effort
between the European members of NATO, EU members who are not in NATO,
and Canada and the United States. This cooperation is essential to
build the military and political links between NATO and the Union
necessary to achieve a common strategic vision and make the needed
improvements in technological capabilities.
Last November witnessed positive developments in the Capabilities
Commitment Conference. This effort has been a primary focus of the
French during their six months as President of the EU last year. The
planning scenarios used to determine capabilities and forces required
for the ESDP Headline Goal Force have remained realistic. In this
regard, the EU has commitments for a Rapid Reaction Force (RRF) of up
to 60,000 personnel, which is the minimum goal. The EU member countries
placed a total of 100,000 troops, 400 combat aircraft and 100 warships
at the EU's immediate disposal to support this RRF. If this force
becomes reality it is sufficient to establish the EU as a significant
military power.
The military staff at SHAPE played a very constructive role in
assisting the EU's interim military staff in the development of these
goals. The Catalogue of Forces turned out to be impressive, with high-
end capabilities that are fully in line with Europe's DCI efforts. My
main apprehension regarding capabilities is that they remain compatible
with NATO Force Goals once the EU force is established and that the
Europeans follow through with the necessary financial commitments to
correct identified capability shortfalls.
In my role as the military commander of NATO's forces (SACEUR), I
am fully engaged in providing advice and perspective as this issue
evolves. In my estimation, if handled successfully by NATO HQ in
Brussels and the European Union, the ESDP process will strengthen the
security posture of the European continent. However, there are many
complicated factors remaining before this capability is realized. The
central issue, in my view, is the method by which a plan is developed
and presented. When a potential conflict or crisis emerges the planning
should be conducted by the SHAPE staff, with EU military augmentation.
The Deputy SACEUR would then take the completed plan to the EU and I
would send it to the NATO political authorities. If NATO elects not to
involve itself, the EU could pick up the mission and deploy forces as
required. If the process does not follow this model the EU will be
unnecessarily creating large and redundant staffs and a real
possibility of double counting and tasking existing NATO forces.
Realization of ESDP largely hinges on the Europeans' willingness to
make the necessary fiscal and political commitments. Any newly financed
capabilities, however, must be in line with DCI--not duplicating but
rather reinforcing Alliance capabilities.

NATO Enlargement and Integration
There are currently nine European nations that aspire to NATO
membership. While the decision to expand the Alliance is a political
one and will ultimately be made in Capitals across Europe and North
America, an aspirant's military readiness will be scrutinized and is
certainly part of the equation. Thus far, the nine aspirants have
benefited from U.S.-funded defense assessments as well as from the NATO
Membership Action Plan with its associated Partnership Goals. These
mechanisms have provided a valuable roadmap towards reform and
interoperability in the event that additional nations are offered NATO
membership.
As for the three newest members of the Alliance--Poland, Hungary,
and the Czech Republic--the Interagency Group estimated that a 10-year
process would elapse before these nations fully transition from past
Warsaw Pact doctrine, equipment, and organization to NATO
interoperability. One should avoid any unrealistic expectations of full
integration this early--only three years since the Madrid invitations.
Nevertheless, they have made great progress. Each has performed well in
both exercises and deployments, including the very demanding
environments of Bosnia and Kosovo where they share the burden through a
contribution of nearly 2,500 troops to the international effort.

European Reaction to Missile Defense Deployment
A number of potentially hostile nations are working to develop
long-range missiles to coerce and threaten countries in North America
and Europe. President Bush has stated that we will deploy missile
defenses as soon as possible. These defenses, he has made clear, must
protect not only the United States and our deployed forces, but also
our friends and allies.
NATO's Strategic Concept also recognizes that ``the Alliance's
defense posture against the risks and potential threats of the
proliferation of (nuclear, biological, and chemical) weapons and their
means of delivery must continue to be improved, including through work
on missiles defenses.'' As the U.S. pursues this capability, I suggest
it continues to consult our friends around the world. Open and frank
discussions on this initiative between the U.S., NATO, and our other
European allies, will further understanding and help avoid alienating
our valued friends.
The defenses envisaged will reinforce the credibility of U.S.
security commitments and the credibility of NATO as a whole. No one can
reasonably argue that Europe would be more secure if the U.S. were less
secure from a missile attack. An America able to defend itself from
missile attacks is an America better able to defend Europe and common
Western security interests. As consultations proceed with Allies on
missile defense, we realize they will continue to consider the
appropriate role of missile defenses in their respective national
security strategies for dealing with the changing international threat
environment. In keeping with the fundamental principle of the Alliance
that the security of its members is indivisible, the United States is
open to discussing possible cooperation with Allies on longer-range
ballistic missile defense, just as we have with our discussions and
cooperation in the area of Theater Missile Defense.

Force Protection
Force Protection (FP) remains a top USEUCOM priority. We are
exercising an aggressive Antiterrorism/Force Protection (AT/FP) program
providing clear AT/FP policy, measures, and tools to mitigate risk and
maximize security for our personnel and their families. We have
implemented a number of innovative AT/FP programs, examining the
application of state of the art technology to enhance access control
and explosive detection, and are continuing our efforts to field mass
notification systems throughout the Theater. We are making progress,
but resourcing continues to challenge our AT/FP Service priorities.
U.S. European Command is in the staffing process of publishing a
significantly updated AT/FP Operations Order (OPORD) 01-01 prescribing
AT/FP standards and requirements. These new mandatory requirements
encompass FP engineering design standards for new construction, major
renovations, and existing facilities. USEUCOM has also instituted a
comprehensive Installation AT/FP Program Manager course to train the
unit FP officers in our AT construction and design standards. To date,
we have established AT/FP responsibilities for DOD elements and
personnel at 67 Chief of Mission locations throughout the USEUCOM AOR.
Coupled with this, 137 AT/FP vulnerability assessments, including
74 Joint Staff Integrated Vulnerability Assessments, have been
undertaken over the past year. These assessments have identified AT/FP
vulnerabilities and assisted commanders in addressing those
deficiencies through the use of countermeasures, procedural changes,
and resourcing--endeavoring to eliminate or mitigate their potential
exploitation by terrorists.
We have developed and fielded a web-based Vulnerability Assessment
Management Program (VAMP). The VAMP captures results of vulnerability
assessments, prioritizes AOR vulnerabilities, identifies deficiencies,
and lists corrective actions needed or completed. VAMP is a management
tool available to every commander and AT/FP officer from the theater
down to the installation level and allows commanders and decision
makers the ability to track and identify the actions taken or required
to correct and/or mitigate vulnerabilities at specific installations
throughout the AOR.
We employ risk management and mission analysis processes in all
deliberate, crisis, and contingency operational planning and exercises.
Threat working groups and assessment tools, such as the VAMP, play a
critical role in these processes. In light of recent events these
processes are receiving additional scrutiny. Although we cannot
eliminate all vulnerabilities, we continue to use risk management when
deciding missions in this theater in order to reduce risk to our
personnel--identifying vulnerabilities and resources required to reduce
exploitable FP vulnerabilities.
Our intelligence operations continually analyze and assess
potential terrorist threats to U.S. installations, facilities and
personnel. We use a variety of systems to disseminate intelligence
within the command and provide routine and time-sensitive threat
warning notifications. Our systems and procedures provide the ability
to rapidly disseminate information regarding specific terrorist threats
to units, installations and individuals throughout the AOR. In
conjunction with our national intelligence agencies, we are exploring
better methods of sharing and disseminating more accurate AT/FP
prediction and tracking threat information. Recently, we initiated
closer cooperation with the U.S. Central Command to share and maximize
our efforts, including assets, analytical and database capabilities.
While intelligence operations support for AT/FP in Theater is good,
we concur with the recent USS Cole Commission recommendation to
reprioritize resources for collection and analysis, including human
intelligence and signals intelligence, against terrorist threats, and
to increase our national intelligence agencies counterintelligence
resources dedicated to combating terrorism.

Balkans
One of the greatest challenges to peace, stability, and democracy
in Europe is the integration of the Balkans into the rest of Europe, a
strategic objective the U.S. shares with NATO and the EU. Last year saw
a watershed opportunity to overcoming that challenge--the toppling of
Slobodan Milosevic and the election of Vojislav Kostunica as President
of the Federal Republic of Yugoslavia (FRY). It has been clear for a
decade that only a change from dictatorship to democracy in Belgrade
would set the conditions for a regional approach to the problems in the
Balkans. This transition from authoritarian to democratic rule in the
FRY should have a beneficial impact on the integration of the entire
region into the West. President Kostunica still has much work to do in
consolidating democratic gains. While the FRY has begun its re-
integration into the Western world, rapidly joining the U.N., the
Organization for Security and Cooperation in Europe (OSCE), and the
Stability Pact for Southeastern Europe, and establishing diplomatic
relations with the U.S. and other key NATO allies, much remains to be
done in the Balkans.
Greater ethnic reconciliation in Bosnia and Kosovo is elusive and
while recent voting in Serbia and Bosnia marked another milestone in
the rule of law and movement towards democracy, it also reinforced some
hard-line nationalist parties and their platforms. Additionally,
despite the first democratic elections in Kosovo, where municipal
voting saw moderates win, the province is still volatile.
Security conditions permitting the withdrawal of U.S. troops from
the region have not yet been fully realized. The status of Montenegro
within the federation, a final settlement for Kosovo, and Serbia's
future links with the Republika Srpska remain open issues whose
resolution are required in order to bring stability and democracy to
the Balkans. There is no short-term solution to the problems in the
Balkans without developing a comprehensive, region wide, and long-term
approach. The economics in the region are driving the turmoil and
fractious nature of the ``peace.'' International involvement in the
Balkans must include substantive initiatives that address the economic
problems of the region. Without such initiatives, we cannot hope to
forecast peace.
Military forces, too, must continue to foster an environment in
which peaceful actions are rewarded, but do it with fewer resources.
This can be accomplished by leveraging existing national and allied
exercises that occur across this Theater and by executing them as much
as possible in the Balkans. By conducting exercises in the Balkans, we
show resolve in the regional policies, deter the outbreak of
hostilities, and improve regional infrastructure leading to increased
interaction among Balkan peoples.
In Bosnia, force numbers have been reduced from 60,000 when the
mission began, to just over 20,000 personnel. Of 34 nations
contributing forces to this effort, 28 are European and their forces
make up 80 percent of SFOR. The U.S. has successfully reduced its
proportion of committed troops from 33 percent in 1996 to 20 percent
today. The way ahead in Bosnia, including future force reductions,
remains contingent upon the implementation of Dayton's various military
and civil tasks. We are working within the Administration to address
possible ways to implement the civil tasks and set the conditions for
additional NATO force reductions.
The KFOR military effort is considerable and has not changed to any
degree since last year. KFOR's strength remains at 37,000 deployed in
Kosovo proper and an additional 4,400 supporting in the Former Yugoslav
Republic of Macedonia (FYROM), Greece, and Albania. This force is drawn
from 39 nations, with 33 European countries deploying over 80 percent
of the total. The U.S., with 5,500 troops in Kosovo, continues to
provide 14 percent of the force. Europe as a whole has endeavored to
live up to its personnel and financial commitments of support to Bosnia
and Kosovo. The following charts indicate their specific levels of
military troop support:

The U.N. Mission in Kosovo (UNMIK) police force enjoys continued
success. Current numbers indicate that 53 nations contribute 4,485
officers. This number represents 95 percent of the U.N. goal of 4,718
police officers. Additionally, the domestic police academy graduated
its twelfth class on 3 February and has placed 3,128 multi-ethnic
officers on the beat as a result. I can report the U.N.'s policing plan
is on target and the effort continues to put 300 plus officer graduates
on the street every month to work--and learn--alongside UNMIK's veteran
contract officers.
U.S. contributions to NATO are based on The North Atlantic Treaty
signed on 4 April 1949. The annual U.S. funding commitment is an
obligation to cover approximately one-quarter of the NATO funding
requirements as set by consensus of the Military Budget Committee
composed of representatives from each of the participating nations.
Once funding is committed, the prestige and credibility of the United
States is irrefutable and must be met. Consequently, a failure to
provide adequate funding to meet this commitment forces the DOD to
reprogram funds from other established mission essential programs.
Shortfalls in NATO funding have been chronic in the past and have only
served to erode national programs. I encourage Congress to realize that
full funding of our NATO commitment will ensure the full execution and
realization of national programs, as well as the continued security and
stability of Europe as afforded by NATO.
In closing on the topic of the Balkans I do want to make one
further comment and that is in regards to the pursuit and eventual
apprehension of Persons Indicted for War Crimes (PIFWCs). There are few
higher priorities in the international community's efforts in the
Balkans than bringing PIFWCs to justice regardless of what you might
hear or read, but it is slow and dangerous work. American forces,
working alongside their NATO counterparts, are fully committed and one
day I am confident these indicted criminals will be delivered to the
International Criminal Tribunal for the Former Yugoslavia (ICTY) at The
Hague. To date approximately one hundred have been indicted and 71
delivered to the ICTY, killed during apprehension efforts, or have
otherwise died. This process will continue until such time as justice
is satisfied.

Operation Northern Watch
The Combined Joint Task Force (CJTF) Operation Northern Watch,
consisting of forces from the U.S., Turkey, and the United Kingdom,
continue to fly dangerous and complex missions in the enforcement of
the No-Fly Zone (NFZ) over Northern Iraq, and monitoring Iraqi
compliance with applicable U.N. Security Council Resolutions.
In the last few months, however, the situation in the zone has been
further complicated by a dramatic increase in the number of
international ``humanitarian flights'' into Iraq, as well as the
introduction of domestic Iraqi flights into the NFZ. Coalition forces
have taken appropriate measures to ensure that civilian aircraft will
not be endangered by ONW activities. There is no guarantee of what
actions Saddam Hussein might initiate; however, he has altered his
primary strategy from open defiance of ONW presence, to eroding
international support for applicable U.N. Resolutions.

Russia
U.S. and Russian soldiers execute common missions side by side
against common threats in the Balkans. Our deployed forces have
performed ably together and have developed positive and extremely
important combined training and operational activities. In spite of
five years of operational cooperation and success however, our overall
attempts to engage more broadly with Russia are mixed. Ideally, Russia
will harmonize its security concerns with NATO, further strengthening
stability in the region. A remilitarized or a failed Russia would lead
to increased instability and danger not only to its neighbors, but to
vital U.S. security interests as well. The U.S. supports favorable
developments in Russia with its bilateral engagement efforts, as well
as through its support for the stability, sovereignty, and economic
development of the Ukraine, Moldova, and the Caucasus' states.

Caucasus
The Caucasus region is vitally important to the United States for
at least two major reasons: the impact on the emerging Russian national
self-definition, and its capacity to fulfill European hydrocarbon
energy deficits. Despite its remoteness from the U.S., the region will
have a decisive impact on international political developments in the
early 21st Century.
The importance of Caucasus oil and gas reserves, and the necessity
of their supply to meet growing European energy needs, comes precisely
at a time when Russia is still immersed in its yet to be completed
social, political, and economic revolution. It also comes at a time
when China is emerging as a major regional economic and political
power, with vastly increased energy requirements. Despite this critical
time, America has imposed on itself considerable constraints towards
our policy and influence in this region.
A key constraint to full American peaceful engagement in this
region is Section 907 of the 1992 Freedom Support Act. The Act
prohibits government-to-government assistance to Azerbaijan until such
time as ``steps are taken'' to lift the economic embargo sponsored by
Azerbaijan against Armenia, with the exception of counter-proliferation
programs. The DOD applies an ``equal treatment'' policy toward Armenia
to avoid compromising the U.S. position as mediator in the Nagorno-
Karabakh conflict. Other subsequent legislation has opened up several
narrow ``carve out'' areas to Section 907 for military and other
engagement activities: democratization; counter-proliferation;
humanitarian demining operations; and humanitarian assistance. While
these niches have allowed us to initiate preliminary military contacts
with Armenia and Azerbaijan, they are extremely narrow and do not allow
USEUCOM to respond to both nations' enthusiastic desire for substantive
engagement activities.
Were it not for Section 907, Azerbaijan, based largely upon its
geo-strategic position, pro-western economic, political, and military
orientation, and its abundant energy resources, would be a very high
priority for USEUCOM engagement efforts. A stable Azerbaijan is
necessary not only for its vast energy deposits, but also to help
forestall terrorism and the proliferation of weapons of mass
destruction. U.S. policy has had the effect of frustrating Azerbaijan's
pro-NATO policy and desires to expand its relationship with Europe and
the U.S. I would ask you to take a hard look with the intent of
modifying this legislation to afford the opportunity for our military
to properly engage with our counterparts in this vitally important
region of the world. Such an initiative would strengthen our ability to
influence this region for the next generation and beyond.
Armenia has also persistently and vocally pursued at the highest
levels closer ties to the U.S. Armenia's motivation lies in its
eagerness to balance its historic dependence and partnership with
Russia, enlist the U.S. to mitigate historically hostile relations with
Turkey, and attract potential economic development assistance and
investment that Russia has not been able to provide. In particular,
Armenia has asked for our advice on establishing a program of
instruction for a national military senior service college and for help
in establishing peacekeeping units that could participate in
international efforts such as the Balkans. Due to Section 907, however,
these are opportunities USEUCOM cannot exploit and we are limited in
our efforts to assist these nations in sorting out mutual problems and
their futures.
Very briefly, our activity in the case of Georgia has continued to
increase since being assigned to USEUCOM's area of responsibility three
years ago. Georgia will host its first large multinational NATO
Partnership for Peace exercise with USEUCOM support in 2001, providing
a good example of the kind of engagement opportunities we are missing
in Azerbaijan and Armenia.

Africa
Africa is a complex, diverse, and often dangerous region of the
world. Its countries are evolving into clusters of stability and
instability, leading in some areas to promising economic growth and
democratic government, and in others to stagnation and autocratic rule.
A few are simply chaotic due to coups, civil wars, widespread
corruption, or lack of an effective government. While this dynamic mix
of political trends and institutions will continue for the foreseeable
future, the Administration seeks to bolster stability and democratic
transformation through a policy of engaging with key partner states and
regional ``success stories.'' We who watch Africa closely anticipate
fewer African ``wars'' but an ever-increasing scope of conflict as
failed states and the emerging transnational threats and humanitarian
crises provide the conditions for instability. Unstable political
environments, austere conditions, and asymmetrical threats where the
enemy is not clearly defined, either by uniform or position on the
battlefield, will characterize the operating environments.
Small programs, such as our Humanitarian Assistance Program (HAP),
are key engagement initiatives in Africa that satisfy both DOD and
State Department objectives. Small dollar amounts have yielded big
dividends in terms of the U.S. military impact in Africa. With
approximately $17 million for fiscal year 2001, USEUCOM will be able to
complete more than 120 projects in roughly 50 African and Eurasian
countries. Engagement through the African Center for Strategic Studies
(ACSS), Near-East South Asian Center, African Crisis Response
Initiative (ACRI), and the West African Training Cruise (WATC) are also
helpful for promoting African stability. Joint Combined Engagement
Training with African partners, in addition to giving our Soldiers the
chance to improve their capabilities to work in multiple environments,
expose African soldiers to the U.S. military, challenging them to
improve their professional skills. By leveraging the resources of
programs such as these we seek to help shape the African environment in
a positive way.

Sub-Saharan Africa
The portion of Sub-Saharan Africa in USEUCOM's area is an immense
geographic area comprised of 37 countries and four primary sub-regions,
each with significant environmental, cultural, political and economic
differences. USEUCOM has identified its three principle objectives for
military engagement in Sub-Saharan Africa: promote stability, democracy
and a professional military; provide prompt response to humanitarian
crisis; and ensure freedom of air and sea lines of communication. By
applying resources against established objectives, the intent is to
reinforce success and work to prevent crises before they occur. There
are three critical issues preventing peace, stability, and economic
development in the Sub-Saharan Africa region: the war in the Congo
(DROC); the conflict in Sierra Leone; and the HIV/AIDS pandemic; all of
which are unrestrained by boundaries or borders. Each is a contagion
that threatens current and future stability throughout the continent.
With the assassination of President Laurent Kabila on 16 January
2001, the future situation in DROC is uncertain. Joseph Kabila, the
late President's son, was sworn in as President on 26 January 2001.
Within DROC there are military forces from six different nations
participating in the conflict. The countries previously supporting the
late President--Zimbabwe, Angola, and Namibia--have pledged continued
support to the new government in its civil war. Additionally, the nine
countries bordering DROC are significantly impacted socially and
economically by the war to varying degrees. The sheer size, geographic
location, vast mineral wealth, and economic potential in DROC guarantee
that peace in the Congo is inextricably linked to stability throughout
the region. The existing Lusaka Peace Accord is the best opportunity to
resolve this conflict. President Joseph Kabila recently held a historic
meeting with Rwandan President Paul Kagame in Washington in February
where both sides pledged to renew efforts to implement the Lusaka Peace
Accords. President Kabila also met with Secretary of State Colin Powell
the same day. Within the limits of U.S. law and policy, U.S. European
Command continues its limited engagement with all parties in an effort
to demonstrate neutrality and urge support for the Accord and the U.N.

Mission to the Congo.
The situation in Coastal West Africa continues to smolder and
destabilize the sub-region. While centered in Sierra Leone, this
conflict also involves Liberia, Guinea, and Burkina Faso, as well as
the sixteen other members, directly or indirectly, that comprise the
Economic Community of West African States (ECOWAS). Through support of
the U.N.'s mission to Sierra Leone, support to British efforts, and
training and equipping countries contributing to the ECOWAS Military
Observers Group, USEUCOM works to contain the spread of this conflict,
as well as create the conditions for future peace and stability in the
region.
Sub-Saharan Africa is the region most heavily infected with HIV in
the world. The region accounts for two out of every three of the
world's HIV infections, and represents over 80 percent of global HIV/
AIDS deaths. The prevalence of HIV in sub-Saharan militaries varies
greatly, but it generally exceeds that of the civilian populace. Many
militaries have infection rates as high as 20 to 50 percent of the
force. As African militaries participate not only in conflicts but also
in peacekeeping and humanitarian relief operations outside their
borders, HIV follows. We are committed to working with African
militaries to contain the spread of HIV/AIDS through education,
awareness, and behavior modification.

North Africa
The strategy in North Africa is anchored by bilateral relationships
with what USEUCOM sees as two cornerstone countries--Morocco and
Tunisia. Recent developments in Algeria have also prompted measured
engagement activities with that country. Complementing these bilateral
relationships is a developing regional approach to engagement in North
Africa and the Mediterranean.
There are three prime sources of tension in North Africa. The first
is the Islamist insurgency in Algeria where the government's amnesty
offers have persuaded moderate rebels to surrender, while security
forces remain engaged in fighting hardliners. The behavior of both the
military leadership and insurgents will be critical to the progress of
political reform efforts and the environment for badly needed foreign
investment. Complete restoration of civil order in the countryside will
likely take years, and social tensions will exist long after the
conflict. There is optimism, however, as it appears there is a general
trend towards greater internal stability.
The second key source of tension is Libya--long a source for
concern as its leader, Muammar Qadhafi, continues to pursue the
development of weapons of mass destruction and associated delivery
systems. Islamist opposition to Qadhafi has found limited popular
support and has met with a strong effective response from Qadhafi's
security forces.
The third source of tension is the unresolved dispute in the
Western Sahara. The King of Morocco, Mohamed VI, has initiated a series
of measures to make the administration of the territory more positive,
but the U.N.-sponsored process to hold a referendum on the final status
of the territory remains bogged down over disagreements about the voter
list. At times, this confrontation contributes to dangerous tensions
between Morocco and Algeria.
Africa will remain a challenging environment for the foreseeable
future. USEUCOM will continue to pursue a program of active peacetime
military engagement to shape the region and pursue our objectives with
the aim of maintaining stability and preventing crises before they
occur. Solutions to many of Africa's challenges are elusive, but
USEUCOM is managing threats and capitalizing on opportunities where we
can.

MODERNIZATION AND PERSONNEL ISSUES

Several modernization and personnel issues are being addressed at
USEUCOM and I want to highlight some of those that Congress might
positively influence and support.

Organizational Transformation Benefits to USEUCOM
There is high probability that there will be repeated demands at
the center of the spectrum of conflict, as well as the possibility of
high intensity small-scale contingencies. Responding to this reality
the Army has articulated a new vision for a strategically responsive
and dominant force to effectively meet the full spectrum of future
military operations. The Army's ``Transformation'' will occur in three
phases, eventually resulting in the ``Objective Force.'' The Objective
Force aims to be able to send a brigade anywhere in the world in 96
hours, a division in 120 hours and five divisions in 30 days. The two
divisions in Europe must also meet this standard by resourcing the
training, exercises and infrastructure that support strategic mobility.
Only through proper resourcing of our two divisions will this Objective
Force be able to provide the deployability, maneuverability, and
lethality necessary to conduct operations throughout the full spectrum
of conflict.
Another key benefit for USEUCOM is the ability to rapidly move
lighter vehicles between training areas and countries within this
Theater. As a potential force provider to other unified commands, most
notably U.S. Central Command, future commanders will find that enhanced
mobility of the Transformed Army also enhances deployability. The
capability to deploy within a matter of hours to trouble spots in
Africa and less developed countries of Eastern Europe offers a range of
options that are simply unavailable today.
As the Army transforms it will reduce the logistics tail
considerably. By operating from a single family of vehicles,
significant efficiencies will follow. Much of the larger and more
demanding logistics support activities will occur outside the
operational area, reducing the logistics footprint.
Permanently stationed forces will be able to train effectively in
the AOR, where many of the training activities of heavier forces will
become increasingly problematic. Less noise and disruption of the local
populations during movement to and from major training areas (MTAs)
make it more likely that permission will be granted for maneuver
training off MTAs. This will allow the widely dispersed units of the V
Corps to greatly expand maneuver training, at a much-reduced cost.
Similarly, the Air Force transition to the Expeditionary Air Force
(EAF) concept has resulted in improved responsiveness in meeting the
diverse needs of USEUCOM. Organized into multiple AEFs to support
ongoing operations, Air Force personnel are now afforded predictable
rotations. This new stability has improved morale, stabilized training,
and assured necessary reconstitution time, thereby improving the combat
readiness of all involved forces. USAFE forces are integral to the EAF.
They provide, in addition to resident combat capability, the backbone
that supports ongoing AEF operations over the Balkans and northern
Iraq.

Special Operations Forces
An invaluable tool for the effective implementation of our
engagement programs is Special Operations Forces (SOF). These forces
focus largely on their unique capability to organize and train
indigenous forces in internal defense. By interacting with foreign
military counterparts throughout the Theater, SOF instills in host
nation forces a sense of loyalty and professionalism that support
democratic government and ideals. In the process, SOF gains valuable
training and cultural experiences from these regional engagements. In
fiscal year 2001, Special Operations Command, Europe (SOCEUR) has
scheduled 101 JCET initiatives in 52 countries. Special Operations
Forces become USEUCOM's force of choice for engaging on the fringes of
the Theater in uncertain environments to open new doors and to shape
the battlespace in preparation for possible contingency operations.

Reserve Components
Total Force integration means conducting military operations that
fully utilize the unique capabilities of the Reserve Components (RC) of
all Services. Reserve utilization requires a balanced and proportional
approach that considers Service competencies and capabilities and
matches those competencies to best support Theater missions. The U.S.
European Command's ability to undertake missions is growing
increasingly dependent upon capabilities offered by the reserves and
the National Guard.
In an effort to ease active component operational tempo the
Services are increasing their use of reserves in contingency operations
in the Balkans. The 49th Armored Division (Texas Army National Guard)
successfully completed a rotation as the command element of Multi-
National Division (North) in Bosnia last October. Their performance was
superb and I want to take this opportunity to publicly applaud the
great job they did last year. The Navy Reserve contributory support to
this AOR for Operations Joint Guardian, Joint/Deliberate Forge and
Northern Watch has included filling 89 percent (237,600 workdays) of
all Navy billet requirements as of July 2000. The Air Reserve Component
provides 60 percent of the total KC-135 tanker aircraft needed for
Operation Deliberate Forge providing air-refueling support to NATO
aircraft flying missions over the Balkans. At the end of last fiscal
year there were 1,244 Guard and 2,775 reserve members on active duty in
support of the two operations in the Balkans. The reality is SFOR and
KFOR stability operations will continue to require augmentation from
the reserve community for the foreseeable future, especially in the
area of civil-military operations and peace support operations.
Reserve Components are an increasingly important asset for
USEUCOM's operational activities, combined exercises, training,
combined education, humanitarian assistance, and security assistance
efforts. Reserve support to the Theater, however, is not limitless.
There are constraints that require a deliberate and well-thought-out
balance of reserve force functions in the total equation of
requirements. The requirements of employers and families demand advance
notice of deployment and training. Reserve Service members require
predictability in order to manage business and personal affairs.
Accessibility and volunteerism are factors that require reasonable
lead-time to match and mobilize assets to the mission.
The PERSTEMPO management legislation enacted in the Fiscal Year
2000 National Defense Authorization Act will help provide standards and
limits for all Service member deployments. While PERSTEMPO management
provides stability and predictability for the Service member, it may
increase personnel turbulence and cost due to an increased frequency of
personnel rotations. Anecdotal evidence has suggested that increasing
use of the RC has a negative impact on Service members' personal lives
and may affect recruiting and retention goals.

Combat Aircraft Modernization
To a large degree tactical aviation has shouldered much of the
nation's foreign policy when that policy called for the use of force. A
decade ago Operation Desert Storm commenced with an unprecedented air
assault against Iraq's military forces involving hundreds of U.S.
aircraft flying tens-of-thousands of sorties around the clock. Since
that time American aviators and aircraft have maintained the NFZ over
Iraq, and since Operation Northern Watch was established have flown
nearly 13,000 fighter sorties alone. More recently we have seen the use
of our strike assets over the Balkans to stop the killing in Bosnia and
to compel Milosevic to withdraw Yugoslav forces from Kosovo during
Allied Force. The demands of modern warfare for precision strike to
maximize combat effectiveness while minimizing collateral damage
clearly demonstrate the increased need for all-weather/all-target
capability. The fact of the matter is, however, many of our tactical
aircraft--F-18s, F-15s, F-16s, AV-8s, and A-10s--are aging and nearing
service life. Even the F-117 ``Stealth Fighter,'' thought by most to be
a new system, has an average age of 9.7 years and relies on dated
technology. Currently, possible replacements--the F-22, ``Joint Strike
Fighter,'' and F-18E/F--continue in development and are likely part of
the Administration's defense review.

Airlift Modernization
Systems modifications are required to keep our airlift aircraft
viable particularly for USEUCOM's fleet of C-130s. These airplanes, now
approaching 30-years of age, are essential to the success of several
USEUCOM mission areas. From support of USEUCOM army units, including
combat airdrop and resupply, to execution of humanitarian relief
operations, these aircraft are a critical ingredient in maintaining a
force projection capability in both combat and during peacetime. It is
almost a certainty that the missions and roles this aircraft fulfills
will only be more crucial in the future.

Air Traffic Control
The tremendous growth in air traffic and communication industries
in Europe presents increasing challenges for air traffic control
agencies, civil air carriers, and military aviation. Just as in the
United States, the European air traffic system requires significant
improvements to increase capacity and reduce delays. At the same time,
expansion of communication technologies is pressuring a limited radio
frequency spectrum. To address these challenges, European countries are
mandating more efficient air traffic communications systems and
avionics. The U.S. has many similar plans; however, Europe is leading
worldwide implementation due to its current frequency and air traffic
congestion. We have no choice but to equip our aircraft for flight in
the airspaces of Europe as well as the rest of the world to allow
access to perform our mission.

INTELLIGENCE AND COMMUNICATIONS INFRASTRUCTURE

For the past several years, we have been living in a new
operational environment for both conventional and support operations as
technological advances change the way our potential adversaries and the
U.S. military operate. At the same time, military forces have become
the spearhead for several nation-building efforts. To meet these
challenges, our intelligence collection and analytical efforts must
constantly adapt to keep pace with the evolving intelligence demands
associated with these new mission areas. Potential asymmetric attacks,
including WMD, terrorism and Information Operations, may be directed
not only at our deployed forces, but also at our critical
infrastructures.

Intelligence Support to USEUCOM
National agency support, including overhead collection, analysis
and reporting, is critical to supporting our operational forces and
engagement strategies. While we continue to revalidate our commanders'
intelligence requirements and economize our requirements on these
national resources, there is no theater capability to complement
national collection support.
Defense Intelligence Agency (DIA) capabilities are critical to
meeting USEUCOM intelligence needs. In particular, the contributions of
the Defense Attache System provide first-hand insights into the
military-to-military relations in each country and timely reporting on
crisis situations. The initiative to expand Defense Attache Office
presence in Africa is important to our engagement programs. In
addition, DIA is leading a defense intelligence community effort to
meet future challenges. This effort includes improvements to the
database to enhance future targeting capabilities, increased
interoperability between national levels and tactical commanders, and
an emphasis on new threats such as WMD and terrorism. The most
significant of these is the emphasis on the workforce to ensure the
intelligence workforce is capable of meeting these and other threats
now and in the future. I am confident these initiatives will shape and
improve defense intelligence support for the warfighter.
USEUCOM relies heavily on National Security Agency (NSA) products
and services. The actions undertaken by the Director of the NSA to
transform the agency into an organization that will successfully
respond to future threats of the Information Age are critical to
ensuring the safety of our forces. Funding support for NSA's efforts
will help mitigate trade-offs during NSA's transformation process,
while ensuring the timely deployment of capabilities needed to exploit
and defeat modern adversaries. Such funding will have the added benefit
of meeting USEUCOM's needs now, and into the rapidly evolving future.
The National Imagery and Mapping Agency (NIMA) provide critical
imagery intelligence (IMINT) and geospatial information support and
have repeatedly demonstrated its responsiveness to USEUCOM crisis
operations. The need to precisely engage targets while minimizing
collateral damage requires accurate and timely spatial and temporal
intelligence. NIMA initiatives to develop a global geospatial
foundation are critical in achieving our operational and engagement
objectives. Additionally, NIMA's efforts to provide a critical IMINT
tasking, processing, exploitation, and dissemination (TPED) system are
crucial in fully realizing the benefits of our next generation imaging
satellites. The recent Congressionally-directed NIMA Commission,
however, concluded TPED is under resourced overall, and the U.S. cannot
expect to fully realize the promise of the next generation of IMINT
satellites unless NIMA TPED is adequately funded.

Information Dominance
In conducting our missions and executing our responsibilities,
USEUCOM commanders have an indispensable edge: We enjoy ``information
dominance'' that comes from the interaction of superior intelligence
and information infrastructures. However, that edge is perishable and
is constantly threatened. The section addresses our health in both.
Command, Control, Communications, and Computer Systems Infrastructure
Europe's Command, Control, Communications, and Computer Systems
(C\4\) infrastructure needs improvement to be able to handle a major
crisis. Many USEUCOM networks were built in the 1940s and 1950s to
support low-bandwidth voice service, and are simply inadequate for
evolving high bandwidth demands, such as worldwide command and control
video-conferences, live Unmanned Aerial Vehicle (UAV) video feeds,
electronic tasking orders for our air and land forces, theater-wide
situational awareness, and full implementation of DOD's Global Combat
Command and Control and Global Combat Support Systems. These systems
are the foundation of USEUCOM's command and control capabilities.
The Theater's World War II-era infrastructures suffer weather-
related degradation in copper cables still insulated with wrapped
paper. Increased network loads and failure of critical components cause
unacceptable system delays and outages. Many Naval sites in particular
are unable to meet the minimum requirements for the Navy/Marine Corps
Intranet--their primary information service network. Furthermore,
current infrastructure does not support Information Assurance (IA)
measures, potentially allowing our collection, analysis, dissemination,
and command and control functions, to be jeopardized by hostile or
inadvertent interference.
We depend upon information services and network-centric command and
control to enable smaller forward deployments, rapidly deployable joint
task forces and task force component commands, shorter decision times,
and improved force protection capabilities. This reliance makes
targeting our networks an attractive option for adversaries unable to
field conventional forces against us, and makes IA an absolute must if
we are to maintain information superiority, and the integrity of our
command and control.
USEUCOM's satellite communications lack flexibility, and capacity
is extremely limited. In the event of a major crisis in Southwest Asia,
nearly all of our mission-essential communications could be pre-empted
by the surge in bandwidth requirements from U.S. Central Command.
Realistically, this infrastructure needs to be replaced with modern
high-bandwidth capability preferably within the next 5 to 7 years--a
significant investment, but one that we can't afford not to make.
Other Areas for Investment and Improvement
Recent process improvements have enhanced coordination and
prioritization of scarce intelligence, surveillance, and reconnaissance
(ISR) resources across numerous worldwide requirements. However,
airborne collectors remain a ``low density--high demand'' asset. Our
ability to penetrate denied and high-risk airspace is critical to
deliver the real-time threat awareness to deployed forces in places
like the Balkans, Northern Iraq, and the Levant. We need to ensure the
development of these capabilities, including long dwell UAVs with both
imagery and signals collection capabilities, stays on track in order to
deliver necessary warning and force protection in threatening and
uncertain environments.

RESOURCES

America's most precious military resource, Service members and
their families, are our number one combat multiplier. The well being of
the family is one of our top Theater priorities, and is inextricably
linked to readiness, retention, and reinforcement of core values,
healthy family life, high morale, and mission accomplishment.

Quality of Life
The quality of our housing, medical care, schools, religious
services, public facilities, community services, and recreation
activities in Europe should reflect the American standard of living--a
value we have all pledged to defend. Our most important fiscal year
2000 Quality of Life (QOL) objective was to analyze and quantify the
impact QOL has on readiness and retention. We took ``expert testimony''
from senior enlisted advisors and family members across the Theater.
Their conclusions paralleled previous year evaluations with family
housing and barracks, spouse employment, childcare and health care,
dependent education, and now the work environment consistently
identified as lagging the farthest behind.

Military Infrastructure
We have seen many positive results from increased Congressional
funding last year and we all applaud and are thankful for Congressional
efforts to ensure the readiness of our forward deployed forces and
families. Of particular note, the recently added $25 million provided
to the Army in Europe to plan and design their ``Efficient Basing
Initiative'' is greatly appreciated, and will prove important as we
work to revitalize our existing infrastructure. However, there is still
a substantial amount of work to do to adequately provide for our
Service members, civilians, and family members who deserve quality
housing, workplace, and community facilities.
Housing, both unaccompanied and family, has improved continuously
for the last three years and the outlook is promising. The elimination
of gang latrines and the renovation of the barracks and dormitories to
DOD's 1+1 standard has been a major morale booster for our troops and
our Components are on track to meet the Defense Planning Guidance (DPG)
requirement for fiscal year 2008. Military Family Housing throughout
Europe as a whole remains old, however, and is well below contemporary
standards, and in need of extensive repairs and modernization. Although
our housing programs in Europe are generally on track to meet DPG
requirements for fiscal year 2010, for the Air Force alone, military
housing construction allocations of over $100 million per year for the
next decade will be required to achieve minimum housing requirements.
Quality housing for military members and their families continues to be
a critical element in attracting and retaining the high caliber
personnel who make our military forces the best in the world.
With trends in housing and barracks positive, it is now essential
to focus our attention on the quality of the infrastructure of our
communities and work facilities in Europe. Sustaining, restoring, and
modernizing facilities are critical to properly supporting the military
mission within the Theater. From runways for our aircraft to the work
place for our troops, the infrastructure support for our operations and
people has weakened over time. This failing infrastructure is due to
almost a decade of placing MILCON and Real Property Maintenance funding
at a lower priority than other needs. Significant investments need to
be made over the next decade to enhance our warfighter's support
infrastructure and demonstrate to our people that they are indeed our
most valuable resource.
USEUCOM is aggressively using all available funding sources,
including the NATO Security Investment Program, Residual Value,
Payment-in-Kind, and any additional funds provided by Congress, such as
last year's Kosovo MILCON Supplemental Appropriation, to help reduce
costs and meet escalating requirements. Additionally, some European
base closures and consolidations will reduce future costs, enhance
readiness, and increase effectiveness. Current ongoing efforts include
the Army's proposed relocation of an entire brigade combat team
currently spread across more than 13 sites, to the Grafenwoehr/Vilseck,
Germany area. This consolidation will significantly improve command and
control, enhance training opportunities and vastly improve quality of
life for the troops and family members--while saving approximately $40
million per year in infrastructure costs.
With our continuing resolve to reduce the footprint while
maintaining presence in our AOR, recapitalization has also become a
critical issue. Progress is ongoing with the Naples Improvement
Initiative nearly completed and construction efforts at Naval Air
Station (NAS) Sigonella about to commence. These efforts will provide a
significant improvement in both quality of life and service for sailors
stationed in the European Southern Region.
These and other initiatives are essential for posturing our forces
to better perform their missions, both now and in the future. In the
meantime, we will continue to endeavor to help ourselves first and work
every opportunity for internal efficiencies through consolidation,
privatization, and ensuring maximum benefit from available funding.

Dependent Education
With over half of USEUCOM Service members supporting families with
children in school, the quality of DOD's dependent education programs
ranks very high in determining QOL for our civilian personnel and
Service members. As with many of our other QOL programs, lack of
adequate infrastructure funding is the top concern. Since many of our
schools are remote, program based staffing is critical to provide a
full range of educational opportunity for all students in music, art,
and associated after school activities. We must take aggressive action
to expand vocational, technical and school-to-work opportunities for
our students. Finally, we must work toward establishing an 18:1
student-teacher ratio for kindergarten and to provide a Talented and
Gifted program for middle schools similar to what is currently
available at our high schools.

CONCLUSION

The U.S. European Command, which I am proud and honored to command,
is executing new and exciting missions everyday, while successfully
maintaining its warfighting edge. USEUCOM has also been active and has
indeed expanded its engagement efforts, working to influence the
military evolution of NATO, PfP, and emerging European defense
structures. Finally, USEUCOM has seized new opportunities involving
Russia, the Caucasus, and Africa, and will continue to seek new
openings to expand our relationships.
Although our current posture is favorable and capable of meeting
our national security interests, our infrastructure in particular is in
need of upgrade and replenishment. Generally, significant increases in
funding are necessary to maintain our readiness, continue current
engagement efforts, and make the necessary investments to sustain our
quality of life.
Without bipartisan Congressional support, USEUCOM would not have
been able to realize the achievements accomplished over the past year.
On behalf of all personnel in the USEUCOM Theater, I want to thank the
Committee for its support.

Senator Stevens. General, we welcome you, as a great
friend, and I want to tell you a little history of when I was a
young Senator, a new Senator.

ORIGINS OF HOST NATION SUPPORT FOR U.S. MILITARY

The chairman of this subcommittee sent Senator Hollings and
me over to Europe to look into some complaints that we were
finding there, receiving there. At that time, those were
unaccompanied tours. We found that the wives and children of
the young members, they were all male at that time, of our
service were following their serviceperson over to Germany, and
they were living in all sorts of conditions.
One I distinctly remember is when Senator Hollings and I
walked up three flights of stairs and found what we called a
cold water walk-up flight with a young woman with two babies in
it. She was living off the economy with no allowances at all,
because she was not supposed to be there.
We came back, and we developed a policy with the great help
of my two colleagues here who are my senior. That was a host
country support policy. Unfortunately--we had very great
success in Asia--in Germany what you see is what we got. It was
better than nothing.
But to a great extent the host country support concept
never caught on in Europe. I think now we are paying the price
in terms of the facilities that were provided at that time for
our families were better than they had then, but they are
totally inadequate now.
You make a great point. Unfortunately, I have to tell you
they mitigate in favor of our taking some of the troops as much
as they mitigate in favor of our putting up more money to
augment the housing that our host countries provide, which is
inadequate.
I really think that the message that you ought to take back
to our NATO allies is that they have been woefully, woefully
absent at the table when it comes to meeting some of the costs
that we have had there in maintaining those forces for so long.
If you compare what Japan and Korea has done, our European
allies are just not at the table. And it is a sad thing.

SUPPLY ROUTE REQUIREMENTS IN MACEDONIA

Can you tell me about that map you gave us? The indications
are that you probably need a new supply route. Are you working
that out?
General Ralston. Mr. Chairman, you are right. I do not want
us to be in a situation where, if things get beyond our control
in the former Yugoslav Republic of Macedonia, that in fact we
are without alternatives.
So I have recommended to the NATO, the North Atlantic
Council, that we explore alternative routes. For example, a
route through Albania to Kosovo, a route through Montenegro to
Kosovo. I would not rule out a route through Serbia into
Kosovo.
So I think that we do need to look at alternatives. I have
made that recommendation to the political authorities at the
Alliance. And we will continue to work on that very hard.

FORCE STRUCTURE IN EUROPE

Senator Stevens. I am sort of reluctant to ask you this
question, but I am reminded that President Eisenhower, when he
had your position as SACEUR, determined that we should increase
our forces in Europe and did so extensively. He did not have
available the air expeditionary force concept that the Air
Force now has, the mobility of our forces.
And now with the transition of our Army into high mobilized
combat brigades, do you really think we need to maintain the
force levels we have had there in the past in terms of our
military presence in Europe?
General Ralston. Mr. Chairman, that is a fair question. And
this is one of the issues, as I say, that will be looked at by
Secretary Rumsfeld in his review. I can only tell you that we
have, as you know, taken a significant number of forces out
over the past decade. Today we are down roughly to two fighter
wings that we have there, two-plus. And we have reduced our
Army forces considerably.

ENGAGEMENT

Now one of the things we have to do, if you went and talked
to those forces today, they would tell you that they are very
busy. They are engaged with our allies, those 91 countries.
I mean, we are working with countries in Africa, throughout
Europe, throughout Eastern Europe, working with Russia, working
with the former member states of the Soviet Union, because I do
not want any of us in the future to look back and say if we had
only tried a little harder working military-to-military
relationships with Russia or with the former Soviet Union
countries, that things may have gone better. As we have talked
about before, I think that is a very important aspect of our
engagement strategy in the EUCOM theater.
I do not believe that I can ask the troops that are there
to continue to do that level of engagement, if I had fewer
forces. We would have to cut back on that level of engagement.
And again, I would only point out that these forces are much,
much closer to the Middle East, if we would need them there.
And they do comprise eight percent of our active duty uniform
military.

NATO ALLIES FORCE STRUCTURE

Senator Stevens. Are our allies maintaining their active
duty components of your forces as the Supreme Allied Commander?
General Ralston. Some of them are, some of them are not.
This is constantly a subject that I talk to the leadership of
each of the nations, as I go around and I visit them. But this
is something that will take continued emphasis. It will take
continued encouragement and emphasis, I believe, from the
political leadership of the United States, as well as the
military leadership.

SECRETARY'S STRATEGIC REVIEW

Senator Stevens. I want to get on to NATO expansion in my
next go-around. My last question at this time, General, is, you
are our Supreme Commander for the NATO forces and our commander
of all our forces in your area, that 91 countries. Are you
involved in the current review that the Secretary and his staff
are making as far as plans for your part of the command force?
General Ralston. I have certainly had the opportunity to
talk to our new Secretary, to our President, to the Deputy
Secretary. I have certainly talked to them about all of the
operations that we have ongoing and what we are trying to do.
And so I feel that I have the opportunity to make input in that
regard.
With regard to the specifics of the ongoing review, I have
not been involved with the specifics. This is something that
the Chairman of the Joint Chiefs, the Vice Chairman, and the
civilian leadership in the Pentagon are working.
Senator Stevens. Senator Inouye.

STATIONING OF U.S. FORCES IN EUROPE

Senator Inouye. General Ralston, in following my chairman's
questioning, we have been in Europe since 1943. That is about
58 years. There are about 100,000 troops. And many of my
colleagues want to be supportive, but they want to know why we
should maintain forces in Western Europe, for example.
If we have to have troops in NATO, why not deploy them
where the costs may be less, and training facilities greater?
Why not go to Kosovo and places like that? There are 69,000
personnel, I believe, in Germany right now.
General Ralston. We are looking into that. And I will tell
you some initiatives that we are looking at. I do believe that
we can do a better job of our stationing of our forces in
Europe. For example, we have an airborne battalion that is in
Italy. They are extremely useful in terms of Southeast Europe,
where we have more unstable areas. We are working them very
hard.
I believe that it makes sense to give another battalion of
airborne forces that would come from elsewhere in Europe, not
additional forces to Europe, but to move them more to the
southern region.

NON-COMBAT EDUCATION OPERATIONS

We use them a lot for African contingencies, whenever we
have to close an Embassy and do an evacuation of American
citizens. One of the things that I found out when I was Vice
Chairman of the Joint Chiefs, in every one of those countries
in Africa that you look at there, there are about 1,500
Americans. There are about 500 official Americans, and there
are about 1,000 others. And every time the government is about
to go down, we get the call, ``what can you do to evacuate
Americans out of country x?''
I remember right after I had become Vice Chairman, of the
Joint Chiefs, we evacuated 2,500 Americans out of the Embassy
in Liberia to safety. And that is something that we stand
prepared to do, we have to do. And this is one of the reasons
that I believe that we could do a better job of moving our
forces around. I made this recommendation back to the United
States Army.
We have made this recommendation to the government of
Italy. The government of Italy has responded favorably. And
that is one of the things that we will be working through in
the future.

CREATION OF EUROPEAN UNION DEFENSE FORCE

Senator Inouye. There are some in Congress who would argue
that we should let the European Union develop its own military
and get out of NATO. What are your arguments on this?
General Ralston. Sir, first of all, this is a very serious
issue, and a serious subject. For years, we have encouraged the
Europeans to do a better job of providing for their defense.
And so I have encouraged anything that they will do that will
be a positive step in terms of their own defense. But I must
also tell you that I think it would be a grave mistake, if they
did this at the expense of NATO. And I do not believe it has to
be done at the expense of NATO. What I am concerned about is
that we keep clear lines of command and control and clear
procedures for making decisions.
Let me give you a couple of examples. Today we have the 19
nations in NATO. There are 15 nations in the European Union.
And 11 of them are the same. There are 4 nations in the
European Union that are not members of NATO: Finland, Sweden,
Austria and Ireland.
If you ask me my recommendation, and what I have made back
to the Alliance, the right way to do this command and control
is to invite those 4 nations that I have just mentioned, send
their military planners to the Supreme Headquarters, Allied
Power Europe (SHAPE), let them join the other 19 NATO nations
that are there.
And when we have a crisis, we will put together military
options for the political authorities. We will have option A,
which will have a certain set of forces and a certain risk
factor. And we will have option B with a different set of
forces and different risk factors, and option C.
And then we would provide those three options to the
political authorities at the European Union and to the
political authorities at NATO. And then both political bodies
have the same set of facts to deal with. If we do not do it
that way, here is the problem. If the European Union sets up
their own military planning operation, they will have options
one, two and three, and NATO will have options A, B and C. And
when they go to their two respective political bodies, there
will be even more confusion than normal in times of crisis.
Secondly, this would be a waste of resources. We do not
need to be spending money, and the European countries do not
need to be spending money, creating more jobs for generals in
more headquarters somewhere. Those are resources that should be
put into the battalions and into the squadrons and into the
ships that really make a difference.
And thirdly, if the European Union does that, they will
pick battalion x to go on an operation. Well, how do they know
that that battalion is not committed to a NATO operation
somewhere?
So for those three reasons, I think we have to be very
careful of the way that we set up the planning structure
between the European Union and between NATO. I can only tell
you that from my experience. Every day I am confronted with
issues where various nations have difficulties. And many of
these are historic.
But if the United States of America says this is the way it
is going to be, then they accept that. But if we were not there
to sort those out, I can tell you that there would be a
constant problem among the nations. And this is something that
I believe the current setup that we have in NATO is the best
way to keep those historic tensions under control.

NATO/EU COOPERATION ON DEFENSE FORCE CREATION

Senator Inouye. Your proposal is logical and makes good
sense. How is our administration, and how are the Europeans
responding to your proposal?
General Ralston. I have had certainly great support within
the administration at all levels. This is something that is
being actively worked at NATO, as we speak, between NATO and
the European Union. I think it is fair to say that most all of
the nations, not all, but most all, of the nations, have agreed
with the concept that I have outlined. I think we need to
continue to work on it.
And this is something that I have told Secretary Rumsfeld I
believe is a very, very important aspect. And he agrees with
me. And I think he will continue to give it proper emphasis.
Senator Inouye. Do I have time?
Senator Stevens. Yes.

AOR RESPONSIBILITIES

Senator Inouye. I am just amazed at the map there. I have
not often seen that map. Your area of responsibility is
unbelievably large. You have 91 countries.
General Ralston. Yes, sir, 91 countries.
Senator Inouye. I know that you have great ability to lead,
but do you think this area of responsibility is too big for one
command?
General Ralston. I certainly would not ask for any more. I
think we have--let me explain the set up a little bit.
I have been blessed with a wonderful deputy. I have a
Marine four star general, General Carl Fulford, who is at
Stuttgart, Germany, which is the U.S. European Command
Headquarters. And while I am doing NATO business in many of the
countries, General Fulford concentrates to a great extent on
the countries of Africa, in addition to the European countries.
Between the two of us, we start every morning talking to
each other. We end every night talking to each other. And I
think we are doing fine. But it is a large area of
responsibility. There is no question about that.
Senator Stevens. We will come back to you.
Senator Feinstein.
We do follow the early bird rule, General, so Senator
Feinstein is next.
Senator Feinstein. Thank you very much.

NATO ACTIVITIES ON FYROM/KOSOVO BORDER

General, in an op ed in yesterday's Washington Post,
General Wesley Clark suggested that NATO needed to take a
higher profile in helping to end the current violence in
Macedonia, including an active role in ending gun smuggling
along the border. Do you agree with General Clark's approach on
how NATO should deal with Macedonia? If NATO does take a higher
profile, what missions do you think are appropriate? What would
be your recommendations regarding rules of engagement and exit
strategy?
General Ralston. Well, first of all, let me separate what
we can do inside Kosovo and what we could or should do inside
Macedonia. NATO, KFOR, are patrolling the border inside of
Kosovo. Now I must tell you, though, I do not want to mislead
you with that.
I have personally surveyed that border. I have gone in a
helicopter that entire border from Serbia across FYROM, across
Albania, and stopped at many of the potential checkpoints.
This is an enormously difficult area of terrain. And there
are trails that go through those countries that have been in
use for centuries, a very, very heavily wooded, heavily
mountainous area. And the idea that anyone can seal that border
is fantasy. That cannot be. But we are actively patrolling the
border. We are capturing every day arms and smugglers that go
cross that border. But I am not going to tell you that it is
100 percent.
What are some of the things that we could do that I think
would be wise? We are working very closely with the government
of Macedonia to provide them intelligence information. We are
providing them with pictures that we get from our various
systems.
I have requested back to the Joint Staff the deployment of
unmanned air vehicles that we could fly along that border and
provide that down-linked information into the FYROM government,
as well as to the United States and to the KFOR forces.

USE OF UNMANNED VEHICLES

We certainly do not have a mandate from NATO for NATO
forces, and there has been no request by the FYROM government
for NATO forces to act in a combat role inside of Macedonia. I
do not believe, in my own personal judgment, that that would be
wise certainly at this time. And I would not recommend it.
But I would recommend that we provide the FYROM government
with advice, with equipment, and with intelligence information
for them to solve this problem.
This, by the way, is a political problem, not a military
problem. This has to do with access to the political process
and to the economic process for all the citizens of the former
Yugoslav Republic of Macedonia.
Senator Feinstein. So if I understand your answer to the
question, it is that we should have a constrained, restricted
role in this crisis. I mean, many, many people believed that
once the Balkans became inflamed, it would spread to Macedonia
and then perhaps even to Greece. It is very surprising that it
is happening with the vigor that it is in Macedonia right now.
And I would hate to see those predictions come true.
If I understand you then, our role should be logistical,
intelligence providing, sort of behind the scenes, unless that
would be reevaluated should there be a formal request from
Macedonia to get involved.
General Ralston. Basically, that is correct, with the
exception of inside Kosovo when the KFOR troops are, in fact,
actively patrolling the border, and we should do the best job
we can to make sure that smuggling and arms and extremists do
not enter Macedonia from Kosovo.

NUMBER OF DEPLOYED NATO TROOPS IN KOSOVO/FYROM BORDER

Senator Feinstein. How many troops are on that particular
border now?
General Ralston. We have thousands. We have 37,000 in
Kosovo, which is a very small area, by the way. It is one-
fourth the size of Bosnia. And by comparison, the most troops
we ever put into Bosnia was 60,000. This was back in 1996. By a
comparison, if you had 40,000 in Kosovo, you are talking
160,000 equivalent. So it is a very densely populated area of
KFOR troops.
On the particular border, the United States has 5,500
troops in Kosovo. Now we have the eastern border all down along
that line. And in the German sector, the Germans also have
4,000 troops or so that are there. And they are on that border.
So we have thousands of troops that are available for that
border control.
Now, once again, I do not want to over-sell this border
control area, because this is a very mountainous, difficult
area to seal off.

NATO'S ROLE IN THE ARREST OF WAR CRIMINALS

Senator Feinstein. Thank you. One of the unresolved issues
of the Bosnian and Kosovo conflict is the question of war
criminals. As you know, the 2001 Foreign Operations Assistance
Act laid out strict guidelines prohibiting assistance to
Belgrade unless Yugoslavia cooperates with the International
Tribunal.
If Yugoslav authorities continue to delay in arresting
indicted war criminals, such as Milosevic, Mladic, and
Karadzic, do you think that NATO has a role in arresting these
individuals and transferring them to The Hague?
General Ralston. First of all, the legislation that you
refer to I believe gives them until the 31st of this month to
demonstrate compliance. And if they have not done so and the
President had not certified that they are complying, then that
financial aid would cease. And I certainly support that law and
that policy.
What the government in Belgrade decides to do is up to
them. I cannot predict them. If you are asking me should NATO
go into Serbia to arrest Milosevic or Mladic or Karadzic, that
is beyond the mission that NATO has been given. I mean, that is
a police mission. This is the responsibility of the individual
nation to turn the people that have been indicted for war
crimes over to the International Tribunal.
Inside Bosnia that is a different issue. If we know and can
find and can capture war criminals inside of Bosnia, we will
continue to do so. I might add, sometimes there is a
misunderstanding of exactly what we have done there.
There are approximately 100 war criminals that have been
indicted with regard to the Bosnian situation. Seventy-two of
those are either in The Hague or have been killed during
apprehension or have otherwise died en route to The Hague. That
leaves approximately 30 that are still at large. I wish that
number were zero. And we are continuing to do everything that
we can.
But I believe here is a case where diplomatic and economic
pressure on the Belgrade regime is the proper course for this.
Senator Feinstein. Thank you very much.
Thank you, Mr. Chairman.
Senator Stevens. Senator Shelby.
Senator Shelby. Thank you.

ESCALATION OF FIGHTING IN MACEDONIA (FYROM)

General Ralston, just to follow up on Macedonia here. This
past week we have seen a rapid escalation of fighting in
Northern Macedonia. You talked about it a minute ago. NATO
Secretary General Robertson has stated that KFOR must stop
these border incursions by utilizing a greater number of
troops.
It appears to me, General, that our troops are on the front
line of yet another ethnic war, and we are about one or two
incidents away from being dragged into something as a full-
fledged participant. If NATO becomes a combatant, fighting for
the stability of the Macedonian government against the rebels,
are you concerned that the Albanians in Kosovo could rise up
against NATO peacekeepers? It has to be a concern.
General Ralston. There is always a concern. And this is one
of the things that we have tried from day one to make sure that
our forces of KFOR operate in an impartial and evenhanded
manner. We are against extremism on either side, whether it
happens to be Albanian extremists or whether it happens to be
Macedonia extremists or whether it happens to be Serbian
extremists. I think that the only way for us to operate is to
be impartial.
I am concerned that we stay within our mandate and that we
operate to provide a safe and secure environment inside Kosovo.
The government of FYROM has to deal with the situation that is
there, albeit it is a democratically elected government that
has been very supportive of NATO and very supportive of KFOR.
Therefore, I would recommend that we support them with
logistics and materiel and intelligence information. But they
have not asked for NATO combat forces in Macedonia. And I
certainly would not recommend that at this time, and only in
extremis.
Senator Shelby. But it is potentially a real explosive
area, is it not?
General Ralston. Yes, sir, it is.

NATO INOPERABILITY

Senator Shelby. To move into another area, General, during
and after the Kosovo operation, there were reports of
inoperability problems within NATO. Some examples of which I
was made aware include one multi-level security access of
intelligence data, the ability of different units to establish
secure communications, and three, the disparity of investment
in precision-guided weapons between the United States and our
allies.
Given that the Kosovo experience was NATO's first combat
operation, has NATO made improvements in these and other areas
which involve interoperability? I think interoperability is
something you have talked about before.
General Ralston. Senator Shelby, yes. And let me say, first
of all, they have made some improvement and some progress. But
I would also tell you that it is inadequate, and it is not
where it needs to be. With----
Senator Shelby. Where does it need to be?
General Ralston. It needs to be a lot better. Let me give
you an example.
Senator Shelby. Okay.
General Ralston. Let me give you a good example and a bad
example. The good example is on precision-guided munitions.
This is something that, as a result of what was demonstrated in
1999 during the Kosovo campaign, several of the European
nations have banded together to buy precision-guided munitions
like the joint direct attack munition, the JDAM, for example,
and laser-guided bombs.
Many of the smaller nations have done that in a cooperative
way, if you will, because they can get a better deal, if they
do that. And that is moving forward, and I applaud them for
that.
Let me give you a bad example. In the case of Kosovo, our
Airborne Warning and Control System (AWACS) airplane had secure
radios. The other allied nations do not have secure radios in
their fighters. Therefore, everyone had to operate in the
unsecure mode. And this unnecessarily endangered the lives of
all of the NATO participants. Now--because in this particular
case the Serbs are very good at intercepting the radio calls,
and they could take action to change the situation and improve
their defenses.
This is not a technical problem. We know how to make secure
radios. This is not a money problem. If a country can spend $25
million for an airplane, they ought to be able to spend $5,000
for a radio.
Senator Shelby. What is the problem:
General Ralston. The problem is the lack of will to do so.
And in spite of this being pointed out as a problem in Kosovo,
not a single nation has added a secure radio to their fighters
since that time. So this is something that I continue to harp
on. I continue to tell the nations they have to do better on
it.
So I must tell you that in some cases they have made
improvements, but in others, it is still lacking.
Senator Shelby. What are some of the other inoperability
problems besides the radio?
General Ralston. I think that is certainly the bigger area.
Our doctrine, we have made a lot of progress on that. I feel
good about that aspect of it.
With regard to intel, yes, there are problems there. Some
of them are procedural. Some of them are policy. Some of them
are technical.
Senator Shelby. What are you doing there? Are you trying to
work that out? That is hard, is it not?
General Ralston. It is hard, but first of all, we have to
make sure the nations understand that it is a problem, and then
we try to move forward.
Senator Shelby. You have to also make sure that they keep
the intelligence within a close group, too, do you not?
General Ralston. Yes, sir, that is exactly right. And that
is some of the policy issues.

ARMY TRANSFORMATION

Senator Shelby. General, can you tell us your assessment of
the Army's ongoing transformation to a lighter force? For
example, how will this transformation affect future NATO
doctrine in operations? And what future do you see for an army
in Europe and elsewhere?
General Ralston. Well, let me talk from the Commander in
Chief (CINC) perspective, if you will.
Senator Shelby. Okay.
General Ralston. This is something that is very much needed
in terms of the United States Army being able to be in a place
that I need them to be quickly.
Senator Shelby. Be able to project force?
General Ralston. Be able to project force quickly and to be
able to do something about it when they get there. Now I have
clearly stated this to General Shinseki and to General Keene
that I will do everything I can to help them attain that.
I do not believe it is my role to get in and tell them how
many wheels ought to be on a vehicle or what kind of wheels
ought to be on that vehicle. That is something the United
States Army is qualified to do.
But I certainly have encouraged them and continue to
encourage them, that they have to get more responsive and be
able to project force quicker and to be able to be effective
once they hit the ground.
Senator Shelby. But that is easier said than done, is it
not?

NATO FORCE PROTECTION

General Ralston. It is easier said than done. But it is
something we have to start right now.
Senator Shelby. Although we have been able to do it, a lot
of our allies in NATO, the ability to project force is a real
problem for them, is it not? Airlift, sealift, everything that
goes with it.
General Ralston. That is exactly right. Now, once again, we
have the Defense Capabilities Initiative, the DCI. We have 58
initiatives that we have given to the nations that they should
move out on.
Airlift, for example, is one. The nations have said they
are going to develop the Airbus A400M aircraft. That is good
rhetoric. I appreciate that. But when you look in their
budgets, many of them do not have the resources there to do it.
So this is something that I think we have to continue pressure
on.
Senator Shelby. And obviously, they are not committed to
putting the resources at the moment into what they need to
project force, have they?
General Ralston. This is always a problem.
Senator Shelby. Thank you.
Thank you, Mr. Chairman.
Senator Stevens. Senator Byrd.

AIRCRAFT RADIO SECURITY

Senator Byrd. General Ralston, you spoke about the need for
security in regard to radios on aircraft. Is that what we are
talking about?
General Ralston. Yes, sir. We were talking about for the
NATO allies. We have those radios on U.S. airplanes.
Senator Byrd. Yes. It might be well if our NATO allies
would review one of the great battles of the world that took
place, I would say, in a goodly distance to the southeast of
Trusca, pretty far to the southeast, the battles of Philippi.
The battles of Philippi took place 2,043 years ago this year in
42 B.C., 2 years after the assassination of Julius Caesar.
And those battles that took place--this is a matter of just
perhaps historic interest. It may not have much bearing on this
particular hearing.
In those battles Brutus and Cassius faced off Octavian and
Marc Antony. That was the first battle of Philippi. And Brutus
defeated Octavian. Cassius's wing, I believe it was the left
wing, Cassius was defeated by Marc Antony.
Brutus did not know about Cassius's straits, s-t-r-a-i-t-s.
They did not have those little cell phones that we have today.
So you see where I am going. If Brutus had had the little
logistic instrument that we call the cell phone, he would have
known that Cassius was in deep trouble, and he would have
redirected, to use the word of the administration right now in
its budget talks, he would have redirected some of his forces
to the aid of Cassius.
But that did not happen. And after this, Cassius had
withdrawn to a hill. Cassius was nearsighted and he saw this
group of people approaching. From the descriptions of the group
that were given to him by some of his aides, he determined that
this must be the enemy approaching to get him. He had already
lost part of the battle, you see.
So he detached Titanius, one of his best friends, to do a
reconnoitering over here, go see that crowd and see what they
are up to. And when Titanius approached, Brutus's people jumped
off their horses and embraced Titanius, because they were glad
to see him. But Cassius decided that this indeed was the enemy.
And to his great chagrin, he had dispatched his best friend
Titanius to go out there, and now he assumed Titanius was being
taken by the enemy. It was not so at all.
But in any event, Cassius retired to his tent, where his
freedman helped him to dispatch his own life with a dagger, the
very dagger that he had plunged into the veins of Caesar. So
the second battle then took place. This time Brutus against
Octavian and Marc Antony.
Now this is all high school history to me. I did not learn
it in any college or anything. I just like history, like
Cicero. He said, ``To be ignorant of what occurred before you
were born is to remain always a child.''
In any event, Brutus lost; whereupon he retreated to a
hill. And his freedman Stratos, I believe it was, helped him to
fall on his sword.
Now all that is to say this, again, that if they had had
this little cell phone, this great battle, who knows what the
future of some parts of the world might have been had they been
equipped with this bit of logistics. That is to say, I hope a
third battle of Philippi does not take place, and it will be
one of the great battles of the world, if it does. And it will
be between Greece and Turkey. And we have been concerned about
this for a long time.

NEED FOR SUPPLEMENTAL FUNDING

Now let me go to one of the questions. My time may have
expired already. But I want to ask you this: I am on the budget
committee, just a new member. I am just kind of learning my way
around. The U.S. effort to support the NATO operations in the
Balkans has been largely funded through supplemental
appropriation bills. Do you anticipate needing supplemental
2001 funding to carry out your mission in the Balkans?
General Ralston. No, sir.
Senator Byrd. You do not.

NATIONAL MISSILE DEFENSE

General Ralston. Not to carry out the mission in the
Balkans, if I heard the question correctly.
Senator Byrd. Yes. So you do not anticipate needing
supplemental 2001 funding for that purpose, even with what is
happening in Macedonia?
General Ralston. I certainly do not--we are 6 months
through the fiscal year. And I cannot predict what the next 6
months will be. But at this point right now, we were funded in
the 2001 appropriation for all of our anticipated needs for
2001.
Senator Byrd. Would you say that again, please?
General Ralston. Yes, sir. In the case of 2001, the
appropriation that we received for the Balkans covers all
anticipated needs that we know about for this year. Now again,
I will reserve. I do not know what is going to happen in the
next 6 months. And I cannot rule it out completely. But at this
point, I do not see a need for a supplemental for the Balkans
for 2001.
Senator Stevens. General, can you pull that mike up closer
to you, please? Thank you.
Senator Byrd. The key word in your answer, as far as I am
concerned, is anticipated. What you have and what you are
saying is, as far as all the anticipated needs are concerned,
you do not need a 2001 supplemental.
General Ralston. For the Balkans.
Senator Byrd. Yes. Did we anticipate what is happening now
in Macedonia when that budget request was made? The answer is
no, I guess. It would have to be, I suppose. You did not
anticipate that, or did we?
General Ralston. I think we anticipated instability in
FYROM. We did not anticipate that we would need to introduce
United States combat forces into Macedonia, nor do I anticipate
that at this point.
Senator Byrd. Well, you do not, of course, at this point.
But a conflagration there that could spread to Greece and
Turkey would be a far different matter than what you are being
confronted with here. Now I do not know whether a supplemental
would have anything to do with that or not. It might be that a
stitch in time saves nine. And we might begin to anticipate
this fighting could spread.
This is what I have been concerned about for years and have
mentioned from time to time. Of course, I was assured by
General Shalikashvili, I was assured by him a few years back
that it would only take about a year to put this problem to
sleep. It would only be about a year, a couple billion dollars.
Now we are 5 years later and many billions of dollars.
And so I have to say that I am concerned that we are not
going to have 2001 supplemental. But that is neither here nor
there, perhaps, any further than what I have been asking you.
My final question is this: We hear all this business about
a national missile defense. How are our European friends and
our allies in NATO taking this, the National Missile Defense?
What do you think of it, if you care to say?
General Ralston. Senator, let me give two answers to that
question, if I may. One, it is what I tell my American
colleagues that I perceive from the Europeans' perception of
this. And then I will come back and tell you what I tell the
Europeans from an American perspective.
But the first issue is, how do the NATO allies react to the
idea of a national missile defense? My own judgment is that the
NATO allies are not so concerned with the idea of a missile
defense. Indeed, they are starting to understand the need for
missile defense against cruise missiles and against theater
ballistic missiles and against strategic ballistic missiles.
But what they are concerned about is a U.S. unilateral
withdrawal from the Anti-Ballistic Missile (ABM) Treaty. And if
we could come up with a way that the United States did not
unilaterally withdraw from the ABM Treaty, either through
discussions with the Russians or whatever, then I believe that
the concerns on the part of the NATO allies would disappear.
Now the other aspect of this, there are some that would say
that if the United States has a missile defense, that that
would somehow decouple America from the NATO allies. And I
answer them with a story that goes along this way.
Not long ago, there was a Chinese general that said: Don't
worry about the United States coming to the defense of Taiwan,
because we have a missile aimed at Los Angeles, and they don't
want to trade Los Angeles for Taipei.
Now whether you believe that or not, that is a different
issue. But I think you would at least have to say that that
statement would inject some uncertainty into any President
before he made a decision of what to do. Well, let us flip that
to the other side of the world. What if an unstable leader in
some country said, we are going to launch a missile against
Berlin unless they do something we want them to do? And do not
worry about the United States coming to the aid of Berlin,
because we have one aimed at New York. And they do not want to
exchange New York for Berlin.
Well, if the United States has a defense so that you are
not subject to blackmail and the President is not subject to
blackmail during that kind of event, then we will be a stronger
alliance, not a weaker one.
Senator Byrd. Well, the key word in your answer, of course,
is if. Well, I guess my time has expired. I would simply say I
do not know how a missile defense is going to ever defend this
country from submarine launched missiles or from terrorist
acts. It is going to be a huge expense.
That will do me for this time around. I congratulate you. I
think you are doing a good job.
But I am not sure that we ought not have that supplemental
appropriation bill, Mr. Chairman.
Senator Stevens. I hear you, Senator.
Senator Dorgan.
Senator Dorgan. Mr. Chairman, thank you.

AFFECT OF BALKAN OPERATIONS ON TRAINING AND READINESS

General Ralston, nice to see you. General Ralston, I have
been, from time to time, uncomfortable about our commitment in
the Balkans. I recognize that what we have done there has
created stability and worked out quite well. But we hear
criticism by some that our peacekeeping role in Kosovo
diminishes the effectiveness and the training of the U.S.
military. We have heard that again and again and again.
You and I talked about that in Macedonia some weeks ago.
And I was frankly surprised by what you said. Let me inquire
again: What does this role mean with respect to training and
readiness in our military? Does it diminish it?
General Ralston. Senator, as we talked about at the time,
let me give you my opinion. And I might say that this opinion
that I am about to give you is shared by the U.S. Army Europe
(USAREUR) your Commander, General Meigs, by his subordinate
commanders.
The training that our soldiers are getting in Kosovo today,
the training that the young non-commissioned officer and the
young officer is getting is superior to what they would be
getting if they were in garrison in Germany, because they are
out doing real world problems, dealing with real world
leadership issues, and dealing with real world small unit
combat operations. They are far better off at the platoon
level, the company level and the battalion level.
Now what they do not get when they are in Kosovo is their
division-level training and their brigade-level training. But
this is something that they would not get if they were back in
Germany except on about an 18-month cycle. So the idea that
they go to Kosovo for six months, where their individual
leadership is improved and their small unit training is
improved, and then they rotate back to Germany, where they pick
up in the cycle their brigade level and their division level, I
personally believe that they are better trained, not less
trained.
Senator Dorgan. Well, thank you. That is the answer you
gave a month or so again, and I think it is important. And I
might say that the troops I have met describe the same set of
circumstances to me.

FUTURE STABILITY IN THE BALKAN REGION

Let me--I indicated that I have some misgivings about all
this, and still do from time to time. Although I certainly
support what we are doing there. But the upside is that we
create stability and prevent hopefully the spread of
hostilities in Macedonia and Greece and so on.
What is the worst case scenario there? You know, all of us
want to be positive, but we also should understand that there
are worst case scenarios. What are those worst case scenarios
that you model in that region? And what are the consequences of
it for us?
General Ralston. Well, there are a whole series of things
that could happen. Let me talk about worst case from a military
perspective. I think continued instability in Macedonia that we
talked about this morning that somehow threatens our supply
routes into Kosovo is certainly one you cannot rule it out. And
that would be a very severe issue, if in fact we did not have
alternate ways to get supplies there. That is why we are
working on those alternate routes that I mentioned.
One of the issues that you have is that in fact the
Albanian population in Kosovo somehow decides that KFOR is the
enemy and not the liberator that they were when they went in.
That would certainly increase the risk to our people. Once
again, that does not mean that we play favorites on this at
all. We have to be impartial. We have to be neutral. We have to
be against extremism on any side.

NATIONAL MISSILE DEFENSE

Senator Dorgan. Let me ask a question, General, about
national missile defense, following on Senator Byrd's question.
You finished your answer by talking about the strengthening of
the Alliance. But I assume that you would agree that no
alliance is strengthened in this world if the building of a
national missile defense system creates a spate of new
offensive weapon construction activities in a number of
countries, including Russia, China, and others.
It seems to me that if the building of a national missile
defense system creates a rush to build new offensive systems in
other countries, that nobody is strengthened. Would you agree
with that proposition?
General Ralston. I would agree with that proposition. I do
not think I proposed that.
Senator Dorgan. I understand.
General Ralston. But certainly I am not in favor of people
building offensive systems that would threaten the Alliance.
Senator Dorgan. But as a military analyst, would you agree
that one of the potential outcomes of our building a robust or
not-so-robust national missile defense system is to stimulate
an increase in offensive weapons production in other areas?
General Ralston. I think it is a complex issue. And I
cannot tell you that I completely agree with that. Because let
me use as an example, the system that has been talked about is
a rather modest one. And I firmly believe that what has been
talked about in no way, shape or form threatens the Russian
strategic deterrent, for example.
So if you somehow--if you ask me the question, do I believe
that a missile defense that has been talked about would be
cause for the Russians to build more offensive systems, I would
not agree with that, because the numbers just would not make
sense for them to do it.
Senator Dorgan. Well, the risk of that happening is
something neither of us want to see. But let me also ask you
this: You described the rumored comment by a Chinese general
about trading Los Angeles for Taiwan. It is also the case, is
it not, that if we build the national missile defense system
that is now being talked about, it would not defend this
country against a missile attack by China? Would that not be
the case?
General Ralston. It would certainly defend this country
against an accidental launch from China. It would defend
against an unauthorized launch from China.
Senator Dorgan. I understand the distinction. I was asking
about a decision by China to launch nuclear missiles against
this country. Our national missile defense system, as it is
currently being constructed, is not designed to protect against
that, is that not the case?
General Ralston. That is correct. It is not designed
against a Chinese threat. It is not designed against a Russian
threat.
Senator Dorgan. Right. Let me ask you----
General Ralston. Other than the accidental and unauthorized
that I talked about.
Senator Dorgan. I understand. Because I just do not want
people to leave with the impression, especially those that are
not very familiar with this issue, that somehow a national
missile defense system really is going to provide some
impenetrable protection. It will not. It is designed against a
very limited threat.

TERRORIST MISSILE THREAT

Let me ask one additional question, if I might, if my time
has not expired. Would you not agree that the more likely
threat by a terrorist would be to say not that we have a
missile aimed at Berlin or Los Angeles, but that we have a
suitcase nuclear bomb planted in the trunk of a rusty Yugo
sitting at a dock in one of those cities?
Is it not more likely that the delivery of a nuclear device
to threaten a city would not be, by an ICBM especially, if you
are talking about terrorists or renegade countries, but much
more likely a suitcase or other device?
General Ralston. I honestly have no way of quantifying the
probabilities of each of those two events. I would hope that
both are low, but I cannot tell you one is greater than the
other. I would only tell you this, that I think we need to be
working against both of those, not against just one.

HIV/AIDS IN AFRICA

Senator Dorgan. And some of us wonder whether we are quite
as aggressive in some areas, as opposed to others. But you have
been very forthcoming, and I appreciate that. Let me just
finally ask you, your area of responsibility is Africa. The
AIDS problem in Africa. What is it doing to the military in
those areas where you are working with the military?
General Ralston. It is a staggering problem. The militaries
of some of the nations that we are dealing with have HIV-
positive rates ranging from 20 to 50 percent. What this means
in the long term on the life expectancy of a nation, I think,
is dramatic. I have not been able to think through all the
ramifications of what that means. But it is a very, very
serious issue.
Senator Dorgan. I ask the question, not because I am less
concerned about the general population than the military, but
this has profound consequences to the entire continent. And it
is a crisis that is more significant than the bubonic plague in
the 1300s. It is something we have to deal with. And I was
curious as to its impact on the Alliance.
General Ralston, thank you. And let me thank you for your
service to our country. I have long been an admirer of your
service.
General Ralston. Thank you, sir.
Senator Stevens. Senator Cochran.
Senator Cochran. Mr. Chairman, thank you.

NATIONAL GUARD AND RESERVES

General Ralston, some of your comments in the latter part
of your statement deal with the important new role that Reserve
components and National Guard units are playing in the Balkans,
specifically in Bosnia where you point out that the Texas Army
National Guard provided a substantial force in that area. And I
notice that from Mississippi National Guard units, there are
going to be over 500 soldiers who will be going over in August
to Bosnia for a 6-month deployment.
My question is whether you think the troops who will be
entering in this area have been sufficiently trained and
prepared so that they are not subject to any unusual dangers
because they are not active duty force troops, and whether or
not you expect that this is going to have an adverse effect on
National Guard and Reserve units in terms of recruiting and
retention for those forces.
General Ralston. Well, first of all let me say that the
Reserve component forces that I have personally met and talked
to in Bosnia and in Kosovo, whether they be National Guard or
Reserve or whether they be Army or Air Force, whatever, they
have been absolutely superb soldiers, sailors, airmen and
marines. I am very confident in their training. If I had any
qualms whatsoever that they were not up to the task, then I
would not accept that. I do not believe that is a problem. They
have been most professional.
And I, and I think you know this, am a big supporter of the
Guard and the Reserve. I have written to General Shelton and
asked that Army National Guard divisions be assigned to the
European Command area of responsibility (EUCOMAOR), because I
think that is the proper thing to do. I think it is the right
thing to do. I have tried to take some actions that will
relieve some of the stress on the National Guard and Reserve.
For example, we sometimes ask them to sign up for a 270-day
commitment before we do that. Why not 90 days? Why not 60 days?
Now I am not proposing that every National Guard soldier that
comes could come for a short period of time, but there are
certainly some that could. And if by doing that we are able to
enhance the volunteer rate of the units, then I think that is
something that is a positive step and something that we should
do.
Senator Cochran. I think our Air National Guard experience
from units in our State of Mississippi has been very positive
in terms of the volunteerism that is a part of the deployment
decisions.
You know, all of you who want to go on a mission, raise
your hand. And invariably, there are enough volunteers in
recent experiences that have permitted them to deploy to the
region and provide a valuable contribution to the effort there.

UNREST IN FYROM (MACEDONIA)

With respect to Macedonia, we are continuing to hear
suggestions of the dangers that are growing in that region. And
we are all concerned about that. Is NATO going to respond
positively to the request for more troops to be introduced into
that area to try to reduce the likelihood of an outbreak of new
fighting in that area?
General Ralston. Senator, let me try to clarify some of the
things that have been reported in the press. NATO did not ask
for additional forces for Macedonia. One of the things the
Secretary General said is that we were going to move additional
forces down on the border inside of Kosovo. And we have done
that.
Now, the issue is, do you need to backfill those forces
that were doing other things as those came down to the border.
That is something the nations will have to look at. I do know
that before I left Belgium yesterday at least one nation had
come forward that they were prepared to send additional forces
to backfill some of those. So this is not an issue of calling
for forces to go into Macedonia. It was an issue of how many
forces do you put down on the border to try to control the
border from inside Kosovo.
We can do that either by stopping lower priority missions
that we would do inside Kosovo or, if the nations come through
with troops to backfill, we can continue to do those missions.

RELEVANCY OF NATO

Senator Cochran. The threat that NATO is organized to
confront was from the Soviet Union in the aftermath of World
War II to protect the security interests of Europe, Western
Europe, and also the United States. That has changed so
dramatically since NATO was first organized and its doctrine
and its decisions about where troops would be sent and how they
would be trained.
Has NATO become irrelevant to the real world threats that
exist in Europe now? I am questioning this because we continue
to hear about the declaring integrity and capability of
Russia's military.
There are no Eastern European countries that I know of that
are building up military forces or threatening Western Europe
in any way or the United States. To what extent could we reduce
the size of our NATO forces and still provide the level of
protection that would be adequate to protect the security
interests of the United States and Western Europe?
General Ralston. Yes, sir. As we had said earlier, I
believe, this is an issue that will be looked at in the ongoing
review that Secretary Rumsfeld is conducting. So I will not try
to predict what the answer will be coming out of that. I can
tell you the arguments that I would make in favor.
First of all, I think the NATO Alliance has done a very
good job in responding to the instabilities in Europe. And
instabilities can come from within, as well as from without. I
think one of the things that we sometimes forget is that when
the United States withdrew from Europe twice in the past
century, we had to go back at great expense in terms of
national treasure and in terms of the lives of our servicemen.
We cannot rule that out. One of the things that NATO has
done has been a tremendously calming influence and factor. And
as Senator Byrd mentioned, we have looked at Greece and Turkey
for a number of years and for centuries. But I am absolutely
convinced that one of the great strengths of NATO is the fact
that both Greece and Turkey are members of the Alliance. They
are good members of the Alliance. And they put the interest of
the Alliance ahead of their individual interests.
And I do not think we can underestimate the good that then
happens. I happen to pick out Greece and Turkey. I could pick
out any number of other pairs of nations on the continent.
The fact that we have about 100,000 American forces forward
deployed, they are not only there for NATO. They are there for
the 91 countries of the European AOR, including places we
normally do not think about. Israel, Syria, Lebanon are all
part of the European AOR. These forces are available for the
Middle East, if they need to redeploy. They are much closer to
the Middle East being where they are in Europe than they would
be in the United States.
Those are the arguments that I would make for a substantial
portion of our forces. By the way, it is eight percent of our
uniformed forces stationed in the EUCOM AOR. I do not believe
that is too high a percentage for the 91 countries that we are
engaged with.
Senator Cochran. Thank you very much.
Mr. Chairman.
Senator Stevens. Thank you very much, General.
I am constrained to remind us all about the divisions that
Hitler had in the region that you are involved in now during
World War II. And my memory is that he never quite conquered
the people of the Yugoslavia area. I hope we do not get drawn
into battle with these people in small groups of 100 or 200 and
lead to further expansion of actual warfare in that region.

HOST NATION SUPPORT

General, would you be kind enough to give a summary, or ask
your staff to give us a summary, of the host nation support of
our NATO allies for our forces in Europe for the record?
General Ralston. Yes, sir, Mr. Chairman. We will provide
that for the committee.
[The information follows:]

This data summarizes the host nation support (HNS) provided by NATO
allies for our forces in Europe. The data encompasses the past three
fiscal years. It is broken-out by the NATO Security Investment Program
(NSIP), Residual Value (RV)/Payment-in-Kind (PIK), Prepositioning
Contributions of European Nations, Assistance in Kind (AIK), and
contributions supporting the George C. Marshall European Center for
Security Studies. This data has been reviewed by U.S. European Command
component services that concur with the data below.

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal Year--
Program --------------------------------------- Total
1998 1999 2000
----------------------------------------------------------------------------------------------------------------
NSIP \1\.................................................... -3.0 120.0 -49.0 68.0
RV/PIK \2\.................................................. 0 0 0 0
Prepositioning Contributions................................ 8.5 8.5 8.6 25.6
AIK......................................................... 17.0 43.7 123.0 183.7
Marshall Center Host Nation Support......................... 2.2 2.3 2.4 6.9
---------------------------------------------------
Total HNS............................................. 24.7 174.5 85.0 284.2
----------------------------------------------------------------------------------------------------------------
\1\ Amounts represent the difference between U.S. contributions and the funds received for infrastructure
projects at U.S. bases in the U.S. EUCOM AOR. This does not include U.S. infrastructure benefits in the United
States, Canada, and Iceland. It also does not include U.S. benefits from NSIP-purchased communications systems
and satellite rental.
\2\ RV/PIK funds are reimbursement for U.S. capital investment.

NATO MILITARY CONSTRUCTION (MILCON)

Senator Stevens. I would like to ask you to explore an
initiative, that is, I understand you are going to be asking
for substantial military construction monies for the European
area in particular under your command. I would like to see what
the response would be to amassing a fund requirement from our
NATO allies. They built that housing originally. Now, as I
understand it, our command is asking us to replace that
housing.
I should think that those nations would at least be willing
to meet us halfway in terms of providing the kind of facilities
that our men and women in the armed services demand now there.
I am not sure that Congress is going to react too favorably
to a total assumption of responsibility for the activities and
efforts that the nations have provided in the past. That was
host nation support housing in the first instance, according to
my memory. Is that correct?
General Ralston. Mr. Chairman, I will have to go back and
provide for the record what the historical track on that is. I
understand the substance of your question, and I will certainly
take that for action and work that.
What we are talking about in many cases here is real
property maintenance just to work on the houses that are there.
It is not necessarily a replacement of the housing, but let us
try to bring them up to the modern standards.
[The information follows:]

The majority of the Family Housing and Unaccompanied
Housing that troops and their families occupy in Europe were
initially provided to the United States following the end of
World War II. The United States moved in to these facilities
while serving as the Occupational Force after the war. The host
nation, by and large Germany, allowed U.S. forces to remain in
these facilities ever since. Unless the land was purchased or
new facilities built on these installations by the United
States, the host nation owns the facilities and the land. The
United States pays no lease costs for these facilities, but
rather is charged with the maintenance and improvement costs
for the facilities that they occupy.
Host nations throughout NATO where U.S. forces are
stationed provide significant support to the United States in
terms of the NATO Security Investment Program (NSIP) and the
opportunity to reside in their facilities essentially rent
free. Additionally, if any improvements are made to existing
facilities and then these facilities are returned to the host
nation, negotiations between the United States and the host
nation occur to determine an acceptable settlement for the
returned facilities.
While support for facilities housing U.S. forces in Europe
is minimal, every NATO country provides significant military
forces as well as critical infrastructure that strengthens NATO
capabilities. Expenditures within their defense budgets to
ensure their forces meet NATO requirements are essential to the
success of NATO. These investments have generally hindered
additional funds from being spent supporting other forces
within their country. Additionally, the investment of more than
$500 million annually by the NATO countries (less the United
States) into the NSIP budget has resulted in significant
benefits to the U.S. installations and a dedication to the role
of NATO.

Senator Stevens. I think that is absolutely necessary, if
we are going to continue to have our people there, particularly
on accompanied tours. Under the circumstances, many of them
have children. And those barracks were not built for children,
so I think you are absolutely right, we are going to have to do
something about it.
But I think it is going to be a reluctant Congress, as far
as military construction of any great extent in that area,
until we see some greater response from our allies to the
responsibilities that our other host nations have recognized,
as far as Korea and Japan and other areas of the world.
Anyone else have a last question? There will be a vote here
in just a minute or two.

CLOSING REMARKS

Senator Byrd.
Senator Byrd. Just to compliment you and Senator Inouye on
the constant good work you do in the funding and needs of our
national defense. And you are on the firing line every day,
just like General Ralston and his troops. I have been on this
subcommittee a long time. But I have not attended the meetings
of the subcommittee probably ten percent of what you and
Senator Inouye do. We kind of lean on you. I do. I lean on you.
God knows, and he does, that our time is terribly
fragmented as Senators. So we cannot all give time to the same
subcommittee. But you do a remarkably good job. You know the
facts that are in these bills. And we have good reason to
depend on you. And that takes a lot of your time and a lot of
your strength. But you are highly dedicated.
And I just want to say that for the record as one member
who has observed your constant attention, your patriotic
devotion and dedication to this important work.
Senator Stevens. You are very kind, Senator. Senator Inouye
and I wish we could get frequent flyer miles for our military
miles, but we do not get them.
And the same to you, General Ralston. I know your schedule.
The general was with us in Athens at the Special Olympics
ceremony, then he was with us when we went to Kosovo, and then
he was back here again to meet us.
I think you demonstrate the need for adequate airlift for
our supreme commander. We are glad to see the way you use it,
and I do appreciate your hosting us in Belgium, as well as your
interest in the Special Olympics, and, above all, the trip you
took us on into Kosovo. I think that was a day very worth
while.
We are delighted to have you back and look forward to
seeing you again, General.

ADDITIONAL COMMITTEE QUESTIONS

For those of you who do not know, he is a constituent of
mine. So I will see you at home, too, Joe. Thank you very much.
General Ralston. Yes, sir. Thank you, Mr. Chairman.
Senator Stevens. Thank you.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted by Senator Daniel K. Inouye

CONFLICT IN MACEDONIA

Question. General Ralston, according to press reports, Russian
President Vladimir Putin says the situation in Kosovo and the region is
spiraling out of control and the Prime Minister of Macedonia says NATO
is permitting the creation of a new Taliban in Europe. We are told that
NATO countries will be sending more troops to the border between
Macedonia and Kosovo. What response do you have to the Russian and
Macedonian comments and what will be the mission of the U.S. troops on
the border and in Macedonia, peacekeeping, peace enforcement, or combat
operations?
Answer. I do not agree with President Putin when he describes
``Kosovo and the region'' as out of control. KFOR has conducted a
peaceful transition in the Ground Safety Zone where Yugoslav forces are
now patrolling in the southern section of the Presevo Valley. KFOR has
increased the number of patrols along the FYROM border and has
interdicted several ``Ethnic Albanian Armed Groups'' (EAAG) attempting
to either enter FYROM from Kosovo or vice versa. KFOR has been very
successful in recovering arms caches in the region as well. In concert
with KFOR, the FYROM army has been successful in defeating the EAAG in
the northern portions of FYROM. Though difficult to eliminate, FYROM
has slowly ensured that the EAAG activity, under the reported guidance
of the ``National Liberation Army'' (NLA), is not provided easy access
to the area.
When PM Georgievski addressed FYROM on March 18, he did accuse
``foreign democracies from Europe of creating new Talibans.'' However,
this was an emotionally charged timeframe. Through State Dept channels,
the PM was assured of Western, and specifically United States, support
for his government. Subsequently both Secretary of State Powell and
President Bush have sent personal notes to the government of FYROM
reassuring them of U.S. support for their democratic efforts and fight
against the insurgents. More recent events have provided indications
that the PM sincerely appreciates NATO/U.S. support.
NATO has requested additional troop contributions for Kosovo.
Several countries have volunteered additional troops but this does not
change the KFOR peacekeeping mission. The United States has not
volunteered additional troops, though Secretary of State Powell has
acknowledged military equipment to support the FYROM army may be
offered.

EUROPEAN SECURITY AND DEFENSE IDENTITY

Question. General Ralston, does the current debate on pulling our
forces out of the Balkans hamper your efforts to influence the EU's
EDSI?
Answer. As you know we have assured our NATO Allies that we will
not unilaterally withdraw our forces from the Balkans--we will consult
fully with our friends and allies. If we did unilaterally withdraw our
forces this would play into the hands of those who wish the United
States to play a lesser role in NATO and in European security, and
consequently it would adversely impact our efforts to build a
constructive relationship between NATO and the EU.
Question. General, if the Europeans start down this path, are you
concerned they will be forced to spend their limited defense dollars to
duplicate capability that NATO already has such as strategic lift?
Answer. I continue to stress with our European Allies the
requirement for increased capabilities while not wasting scarce defense
resources on capabilities we have in NATO and that we cannot afford to
duplicate, such as military command structures and our planning staff
at SHAPE. However, this does not mean that we don't want the Europeans
to procure more defense capability. The NATO Defense Capabilities
Initiative provides a wide range of capabilities that our allies should
strive to attain.

SUBCOMMITTEE RECESS

Senator Stevens. If there is nothing further, the
subcommittee will stand in recess.
[Whereupon, at 11:35 a.m., Wednesday, March 21, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MARCH 28, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:23 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
Present: Senators Stevens, Bond, Shelby, and Inouye.

DEPARTMENT OF DEFENSE

U.S. Pacific Command

STATEMENT OF ADMIRAL DENNIS C. BLAIR, U.S. NAVY,
COMMANDER IN CHIEF

OPENING STATEMENT OF Senator TED STEVENS

Senator Stevens. Admiral Blair, it is nice to have you with
us again. I apologize for my tardiness due to a vote on the
floor and some conferences that took place immediately
afterwards. Delighted to have you as the Commander in Chief of
our Pacific forces with us today.
Many of us here have recognized for a long time the
strategic importance of the Pacific and the area that is under
your command. I think I speak for all of us here that it is our
belief that the theater of U.S. military operations for the
future must accent the Pacific region. We have not had this
vision shared totally throughout the defense establishment, but
I am encouraged, I hope my colleagues are, by the reports that
there is an increasing awareness of the importance of the
Pacific and that the strategic review now under way may give
greater emphasis to the area of our great concern and your
current responsibility.
As a matter of fact, this coming year may really be a year
of transition as far as the position of our national government
with regard to the Pacific region. You know more than we do
about the specifics of the reasons for these fundamental
changes in force structure, engagement, basing, presence of our
forces throughout the area. They will have serious impacts on
some of our long-range commitments and security relationships
in the Pacific, and we will be hopeful that you can provide us
with an update on those arrangements and the security situation
in the Asian Pacific region as a result of your own review.
I assume that we all have to wait for the final review on
the direction that is going on in the Department by Secretary
Rumsfeld. But clearly we would like to hear today from you
about the basic positions that you are prepared to argue for in
your command.
We are going to have some statements that we would like to
ask you, and there will be other statements that we would like
to file and ask that you and your staff complete them for the
record. Your full statement is in the record under our
procedure, printed in full, and we would appreciate your
comments on how much of that you wish to proceed with orally
here.
Let me again personally thank you for your hospitality to
us and to the members of this committee when we visited your
headquarters in Hawaii, and have been really in touch with you
and your subordinates throughout your region. You have the
largest regional responsibility of anyone below the Chairman of
the Joint Chiefs, and you are in fact Commander in Chief (CINC)
of that region.
The CINC concept is one concept that we fully support and
we are delighted that you have that position, because of your
awareness of the problems and the comments and presentations
that you have made to us in the past.
I would yield now to my distinguished colleague. I have
called him vice chairman for years, but he is a co-chairman
now. Senator Inouye.

STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. Thank you very much, Mr. Chairman.
I do not think I can add much more to what you said because
you have spoken for the majority of us here. I would just like
to add a few things. There are certain statistics that not all
of our colleagues may be aware of, such as there are more jumbo
jets flying across the Pacific than the Atlantic, we do more
trade with Asia than we do with Europe, and from the military
standpoint, eight out of the ten largest armies in the world
are in your area of responsibility.
There are many places of contention in your region:
Indonesia, the Korean peninsula, India, Pakistan, just to name
a few. For that reason, I am pleased that we are beginning to
hear that the new administration is beginning to think about
the Pacific. That is the report we are receiving from the
Pentagon. We hope that the strategic review will bear this out
and recommend whatever is necessary.
We are eagerly waiting, as the chairman has indicated, the
conclusion of this review. But we are well aware, as we are
constantly reminded, that unfortunate accidents, disciplinary
problems, cultural differences, have occasionally caused us
problems with our friends in the region. We are also faced with
nations that possess profoundly different forms of government
than our own, who seek to challenge our principles of freedom
and democracy.
We see areas of significant regional tensions, where
territorial disputes threaten the peace of that region.
Therefore, I cannot say this often enough, your leadership is
so important. You have helped us work through many
difficulties, and we have been able to overcome many
challenges.
Today, I believe as a result of your leadership, we are
respected by our friends and potential adversaries alike. But I
am certain you know that improvements are always needed. You
can be certain that we stand here ready to serve you and to
assist you in your endeavors out there, because we value your
leadership.
So, like my chairman, I look forward to your testimony.
Welcome, sir.
Senator Stevens. Senator Shelby.

STATEMENT OF Senator RICHARD C. SHELBY

Senator Shelby. Thank you.
Admiral, we welcome you here and look forward to seeing you
in a week or so. I hope you will touch on this in your
testimony, but there have been a number of accidents and
embarrassments for the U.S. armed forces in the preceding 6
months. Four of these incidents have occurred in your area of
operations. These include, among other things: October 2000,
overflight of the carrier Kitty Hawk by Russian fighters in the
Sea of Japan. The carrier launched no aircraft despite ample
warning.
Two, November 2000, crash of two Air Force F-16's in the
Sea of Japan.
Three, March 2001, the collision that we know about between
the U.S.S. Greenville and a Japanese fishing vessel.
Four, March 2001, the crash of two Army Blackhawk
helicopters in Hawaii.
I guess what I hope you will touch on is--are the troops
adequately trained and equipped at this time? Are they ready,
so to speak? Do you have adequate airlift and sealift assets to
expeditiously transport your combat forces to a conflict and
engage with them in a decisive manner?
There are other questions I will ask, but I thought I might
tell you at the beginning, and I hope you will touch on these.
Thank you.
Thank you, Senator.
Senator Stevens. Thank you very much, Senator Shelby. I did
not detail those because we presume the Admiral is going to
deal with those, and some of the questions we will submit will
deal with those issues, too.
Senator Shelby. Absolutely.

PREPARED STATEMENT OF SENATOR THAD COCHRAN

Senator Stevens. Senator Cochran has submitted a statement
and asked that it be placed in the record.
[The statement follows:]

PREPARED STATEMENT OF SENATOR THAD COCHRAN

Mr. Chairman, I am pleased to extend my thanks to Admiral Blair for
his many years of dedicated service to our country and for the
outstanding job he and his command are doing in support of our national
security interests.
The Pacific Command encompasses over 52 percent of the earth's
surface and plays a vital role in maintaining peace and prosperity in
the region. However, I understand that many challenges and threats
exist to maintaining an environment supportive of our national
interests and goals.
The proliferation of missiles and other weapons of mass
destruction, increased nationalism, and dynamics of asymmetric warfare
are three significant threats that will have to be dealt with as we
contribute to the stability of this region.
I am concerned that the current rate of ship production will leave
your command short of the forces required to carry out future missions.
Other concerns that I hope you will discuss today include whether the
Pacific Command has adequate flight hours, ship steaming days, spare
parts, and ordnance to meet its mission requirements.

Senator Stevens. Admiral Blair.

OPENING STATEMENT

Admiral Blair. Thank you, Mr. Chairman. Let me just make a
couple of remarks as we head into the questioning period.
First, it would be wrong if I did not recognize this committee
for the strong support they have made to the men and women of
the Pacific Command this year and in past years. As I look up
at both the members in front and the staff members who back you
up, I cannot think of a better group who is more knowledgeable
about the Pacific. You come out to see us a lot. You know what
is going on, and then you reflect it in the bills that you
pass.
The priorities that we have in the Pacific Command remain
readiness, regional engagement, transformation, and resources.
Readiness over the past year has been a mixed picture, frankly.
We have made some gains, but there are other areas that we have
not made gains in. I am concerned that in the future we will be
losing overall readiness unless we can come to grips with some
of the structural issues having to do with the operation and
maintenance of equipment and of the replacement and maintenance
of real property.
On regional engagement, I just returned last week from a
trip to China, Korea, and Japan. With our forward-based forces,
our forward-deployed forces, we can reassure our friends. We
can give pause to those who wish us ill. We are making progress
on enhanced regional cooperation, which is tieing together
countries to work together on the missions of the future which
we all share in common, not simply looking to the missions of
the past.
Third is transformation. We are working with Joint Forces
Command and we are experimenting our way into the future in the
Pacific using our existing exercise program plus some
activities like advance concept technology demonstrations. We
are working on a concept for the future called the Joint
Mission Force, which will be applicable to Pacific missions.
Finally, resources. Our strategy in the Asia Pacific
region, no matter how we finally determine it with this
administration, is based on balanced, forward, ready forces, a
command and control infrastructure which can enable us to work
across this vast region that we have, and a mobility network--
and you mentioned this, Senator Shelby--to be able to reinforce
in crisis or conflict immediately.
To do that, we need sustained funding, for both of our
joint headquarters and the four service components who make up
the forces in the theater. It is important that we do that for
all the reasons we talked about, in this theater that is not
only important to U.S. interests, but it is the most dynamic
region in the world. It is going to be different in 10 or 15
years from the way it looks now.

USPACOM MILITARY INCIDENTS

Let me stop there with summary statements. But Senator
Shelby, I will just address the incidents that you raised. I
have looked at the preliminary reports for all of those
incidents and I have also looked at our overall statistics, and
I do not connect those dots into a trend yet, Senator. For
example, one of the pilots involved in the F-16 accident was a
group commander, one of the most experienced pilots we have.
One of the pilots of one of the helicopters was our most
experienced warrant officer helicopter pilot. So it was not
that we were putting rookies behind the stick without enough
training.
In all of those four cases, there were a series of things
that were not done as we know how to do them and so they
occurred. But I do not string them together into an overall
lack of readiness in those areas. I do remain concerned for the
future, as I mentioned, sir.

AIR AND SEALIFT IMPROVEMENTS

Air and sealift, we need improvements in the region because
of its distance, because of the number of things we have to
cover. I think that the improvements that are still being made
in terms of more C-17's coming on line, the more flexible use
of the sealift, are in the right direction, and we need those.
[The statement follows:]

Prepared Statement of Admiral Dennis C. Blair

INTRODUCTION

Mr. Chairman and members of the Committee: On behalf of the men and
women of the United States Pacific Command, thank you for this
opportunity to present my perspective on security in the Asia-Pacific
region.
Having served as Commander in Chief, United States Pacific Command
(USCINCPAC) for over two years, I continue to believe, as we enter into
this century, that a secure, peaceful and prosperous Asia-Pacific
region is very much in the interests of America, and the world.
Alternatively, an uncertain Asia may present only crises and dangers.
We base our power and influence on our values, our economic vibrancy,
our desire to be a partner in this critical region, and the forward-
stationed and forward-deployed forces of the U.S. Pacific Command
(USPACOM).

DEVELOPMENTS IN THE ASIA-PACIFIC REGION

Since I last testified before you, developments in the region have
offered promise and continuing challenges.

Japan
Japan remains our most important ally in the Asia-Pacific. Although
the economy is virtually stagnant, Japan remains the second largest
economy in the world and continues to have a strong economic impact on
the Asia-Pacific region. Japan hosts nearly 41,000 U.S. armed forces
personnel and serves as a forward-deployed site for about 14,000
additional U.S. naval personnel. Japan also contributes $4.86 billion
in host-nation support, the most of any U.S. ally. These forward-
stationed and forward-deployed forces are key for the United States to
meet commitments and defend American interests throughout the Asia-
Pacific region. The U.S.-Japan alliance is the cornerstone of U.S.
security interests in Asia, and it is fundamental to regional security
and peaceful development.
Over the past year, we made steady progress in strengthening our
alliance with Japan. The two countries signed a new 5-year Special
Measures Agreement (SMA) that will take effect on April 1, 2001. While
the utilities cost-sharing levels are down slightly from the previous
SMA, the new agreement provides for the same levels of labor cost-
sharing and training relocation costs as those of the previous SMA.
Over the past year, working groups took the first steps to
implement the Defense Guidelines. In addition, Japan's Diet passed the
final piece of Defense Guidelines related legislation: a law
authorizing the Japanese Self-Defense Forces (JSDF) to conduct ship
inspections to enforce U.N. sanctions. Now that a site for the
replacement facility for Marine Corps Air Station Futenma has been
selected in northern Okinawa, detailed discussions have begun over the
type and scale of the facility. U.S. and Japan ballistic missile
defense cooperation continued on Navy Theater Wide research.
On February 9, 2001, USS GREENVILLE collided with the fishing
vessel Ehime Maru, resulting in the loss of the ship and nine lives,
including students. The U.S. Government and Navy have apologized to the
Government of Japan and the families of the victims, are evaluating the
feasibility of raising the vessel, and will provide compensation to the
victims. The Navy has convened a Court of Inquiry to examine the events
contributing to the incident and accountability. The U.S. and Japan
have a strong bilateral relationship whose enduring strength has
benefited both sides for close to half a century. We believe we will be
able to move forward from this tragedy in the interests of both nations
and our peoples.
The roles and capabilities of the JSDF are slowly evolving to meet
future challenges. The Japanese Ground Self-Defense Force provided a
45-man transportation unit as part of the Golan Heights U.N.
Disengagement Observer Force. The JSDF has also worked closely with
USPACOM components to restructure bilateral exercises to develop skills
for humanitarian assistance, search-and-rescue, non-combatant
evacuation, consequence management for chemical, biological and nuclear
incidents, and complex contingency operations that are likely to occur
in the future. JSDF is sending observers to TEAM CHALLENGE, a linked
series of exercises addressing these missions and involving several
Asia-Pacific nations. I am also encouraged by the increased attention
that the JSDF is giving to cooperating with regional armed forces--the
Republic of Korea in particular.
I remain deeply concerned about the Shinkampo private industrial
waste incinerator abutting Naval Air Facility Atsugi. While dioxin
levels have fallen significantly since Shinkampo completed the
installation of bag house filters last May, construction has not
started on a 100-meter smokestack that the Prime Minister of Japan
committed to building by March 2001. This situation continues to be a
serious health risk to our service members and their families.
We must solve individual local issues arising from our forces based
in Japan. As important, however, is that the U.S. Pacific Command and
the JSDF maintain the capability to defend Japan and build the
capability to operate together in order to face the common regional
challenges of the future--peace operations, noncombatant evacuation
operations, humanitarian relief and dealing with transnational
concerns. The Defense Guidelines show the way to the future for the
U.S.-Japanese alliance and we must proceed in that direction.

South and North Korea
Last year, the U.S. and Republic of Korea (ROK) began the
commemoration of the 50th anniversary of the Korean War. About 37,000
U.S. troops remain stationed in the ROK to deter North Korean
aggression.
Political developments in Korea have been breathtaking, highlighted
by the June 2000 summit between President Kim Dae-jung and his North
Korean counterpart Kim Jong-il. Other North-South reconciliation
activities included reunions between selected families separated by the
war, increased aid, and agreements to increase economic links including
a road and railway passing through the demilitarized zone.
At the same time, North Korea's military training cycle in the
winter and summer of 2000 was the most extensive ever, and the ongoing
winter training cycle remains robust. North Korea continues to maintain
60 percent of its forces within 100km of the DMZ.
Given North Korea's continuing significant military capabilities,
the Republic of Korea and the United States must maintain the deterrent
power of the Combined Forces Command (CFC). Any changes to the CFC
posture must come through mutual and verifiable confidence-building
measures that increase warning times for aggression.
I remain concerned about the lack of frequency clearances granted
by the ROK government to U.S. forces for planning and training. For
example, there are no frequencies cleared to support UAV training on
the peninsula. Likewise, we are currently limited to only 126 VHF/FM
frequencies for planning purposes, far short of the over 1,000
frequencies we would expect in an operational scenario. We will
continue to work to resolve this deficiency.
Whatever the future holds, it remains in the interests of both the
Republic of Korea and the United States to have a continued U.S.
forward presence on the Korean Peninsula. Recent developments have been
encouraging. The recent renewal of our Status of Forces Agreement
(SOFA), the conclusion of the No Gun Ri investigation, and the
agreement on missile guidelines reflect the mature relationship between
the United States and South Korea and provide a strong foundation for
future cooperation on the Korean Peninsula. The Commander in Chief of
U.S. Forces Korea has also proposed a Land Partnership Plan that, once
enacted by Korea, will make U.S. force presence less burdensome while
enhancing training and combined warfighting capability. We also will
begin negotiations for a new Special Measures Agreement that we hope
would increase South Korea's financial support for the stationing of
U.S. troops in the country.
The Republic of Korea increasingly contributes to meeting regional
security challenges by contributing 419 troops to peacekeeping in East
Timor, consulting and cooperating with the JSDF, participating in
exercises such as RIMPAC (a major, multilateral naval exercise) and
PACIFIC REACH (a submarine rescue exercise also involving naval forces
from Japan, Singapore and the United States), and participating as
observers in TEAM CHALLENGE.

China
During the past year, military developments in China have been
mixed. A White Paper issued in February 2000 emphasized China's
commitment to peacefully resolving its differences with Taiwan, but
also specified conditions that could trigger the use of force against
Taiwan. Chinese military spending increased, and Beijing continued to
acquire advanced weapon systems from Russia.
The People's Liberation Army (PLA) is modernizing and making
organizational changes in all branches of service to strengthen
homeland defense, expand regional influence and support sovereignty
claims to Taiwan and the South China Sea. China continues to increase
its modern combat aircraft inventory and improve air defenses,
particularly across the Taiwan Strait. The PLA navy conducted sea
trials for eventually fielding additional surface ships and submarines,
continued testing of anti-ship missiles, and received its second modern
Russian guided missile destroyer. PLA ground forces continued
downsizing to reduce force structure and increase mobility. The PLA
missile force continued testing and fielding of newer inter-continental
and short-range ballistic missiles (SRBM) and is building additional
SRBM launch sites within range of Taiwan. China's exercise program,
while extensive, was not explicitly threatening to Taiwan.
Over the past year, we have reinitiated military relations with
China on a realistic foundation. We have fashioned policies that offer
China areas for productive relations, while ensuring that we can deal
with a more confrontational posture, should it be necessary. We
emphasize areas of mutual interest and encourage Chinese participation
in regional security cooperation while maintaining that diplomacy, not
armed force, should settle disputes.
We have exchanged visits between senior PLA delegations and U.S.
counterparts, and ships have conducted reciprocal port visits. PLA
forces participated in a search-and-rescue exercise in the Special
Administrative Region of Hong Kong, and four Chinese officials (two
from the PLA and two from the Ministry of Foreign Affairs) attended the
Asia-Pacific Center for Security Studies in Honolulu. We have invited
the PLA to participate in more multinational conferences on topics
involving regional security cooperation than it has chosen to attend.
We carefully vet our engagement in accordance with the National Defense
Authorization Act.
The Taiwan armed forces also continue their restructuring and force
modernization. A civilian Defense Minister now oversees the armed
forces. The Taiwan military relies heavily on the United States to
modernize its forces. Through last year's arms sales, Taiwan's armed
forces increased surveillance capabilities and modernized air-to-air,
air-to-ground and air-to-surface weapons. Taiwan is looking forward in
its modernization plans by improving a number of bases and
infrastructure to support acquisition of future weapons.
As Taiwan modernizes its armed forces to ensure a sufficient
defense, training, inter-service interoperability and logistics support
become even more important. The Taiwan armed forces will have to put
resources and attention into these areas to retain the qualitative
edge.
Based upon our assessments, I conclude that the changes in PLA and
Taiwan military forces have not significantly altered the balance of
power across the Taiwan Strait. Taiwan's military maintains a
qualitative edge over the PLA, and the PLA still lacks the capability
to invade and hold Taiwan. China maintains a quantitative edge in all
branches of service, but does not have adequate power projection to
quickly overcome Taiwan's more modern air force and inherent
geographical advantages, which favor defense. Beijing's military
forces, however, have the ability to inflict significant damage to
Taiwan.
We expect China to accelerate military modernization, but pressing
economic and social issues will temper this effort. Military
modernization will not decisively alter the military situation across
the Strait in the next several years. The continuing buildup of Chinese
Ballistic missiles, combined with increases in accuracy, will
increasingly pressure the sufficiency of Taiwan's defenses. The U.S.-
China-Taiwan relationship will continue to be a critical factor in our
regional engagement strategy.

India
U.S. military relations with India have been restricted since
India's nuclear weapons tests in 1998. Areas for military cooperation
exist, however. Peacekeeping is the most promising. We have also agreed
to discuss search-and-rescue, humanitarian assistance, and
environmental security. The U.S. and India have also set up a working
group to address counter-terrorism cooperation. The response to India's
recent earthquake demonstrated the value of cooperation, both civilian
and military. We are pursuing opportunities to build a foundation for
closer relations. I believe a gradual strengthening of military
interaction is in the interests of both countries. The more we work
with India and Pakistan, the better we can defuse tensions by
supporting productive relations between those two nuclear-armed
countries.

Insurgents and Communal Violence
Beyond Kashmir, which remains a flash point of tension between
India and Pakistan, insurgents and communal violence affect many states
in the Asia-Pacific Region.
Indonesia faces violent separatist movements in Aceh and Irian Jaya
(West Papua) and sectarian violence in the Maluku Islands and
Kalimantan. Intense fighting on the Jaffna Peninsula between the Tamil
Tigers and Sri Lankan armed forces continues without significant gains
by either side. Nepal faces an increasingly troublesome Maoist
insurgency. For much of the year, the Philippine armed forces have
battled the Moro Islamic Liberation Front (MILF) and operated against
hostage takers, including the Abu Sayyaf, which took American Jeffrey
Schilling hostage. Indonesia, Sri Lanka, Nepal, and the Philippines are
still searching for the right combination of political, economic
development, and military/police measures to effectively address these
insurgencies and sectarian strife.
In Fiji, a coup overthrew the democratically elected government,
and the Solomon Islands have experienced separatist violence that
caused a change in government and the evacuation of foreign nationals.
Also, fighting among various ethnic groups on Burma's borders, much of
it connected to illegal drug trafficking, has spilled into Thailand.
Communal violence not only causes suffering and slows the
political, social and economic development of countries in the region;
violence also fosters terrorism, causes refugees to migrate, and
creates humanitarian disasters that spill across national borders.

Indonesia
Indonesia is still undergoing major political, social and economic
changes after 40 years of authoritarian rule.
The Armed Forces of Indonesia, or TNI, began reforms in 1999 that
they have yet to complete. The reforms call for the TNI to become a
professional, modern armed force, focused on external defense and
divorced from political practices. The number of TNI seats in
parliament has been reduced and the police force separated from the
TNI. However, elements of the TNI have been reluctant to continue
reforms. The TNI remains a major political force, particularly on the
local level, and retains the major role in internal security. It has
not brought under control the militias in West Timor, resulting in the
deaths of three U.N. workers and a continuing security threat to East
Timor, nor has it yet brought to justice any of those who orchestrated
or engaged on atrocities in East or West Timor. TNI reform is an
important aspect of restoring order in Indonesia in a manner that
promotes democratic development and regional security.
Most interactions between U.S. and Indonesian armed forces have
been suspended until there is credible progress toward accountability
for East Timor human rights abuses and the return or resettlement of
refugees. During the past year, limited interaction with the TNI
involved a Navy humanitarian exercise and Indonesian Air Force
observers at Exercise COBRA GOLD. The objectives of interaction with
the TNI are to favor reform and build capability for coalition
operations.
Under the protection of International peacekeepers, East Timor
today is generally secure from the militias, but the work has just
begun to establish a fully functioning society. Our Australian allies
did a great job in leading this U.N.--mandated peace operation and
remain the backbone of the security forces. The Philippines and
Thailand have stepped forward to assume leadership of the peacekeeping
forces since it became a U.N. operation. The U.S. armed forces continue
to conduct operations in East Timor by providing liaison officers,
engineers and humanitarian assistance during ship visits.

Philippines
The Philippines experienced a peaceful transition of power from
former President Estrada to former Vice President Gloria Macapagal-
Arroyo (GMA). Throughout the period of the impeachment hearings and
transfer of authority, the Armed Forces of the Philippines (AFP) acted
with restraint and used constitutional precepts as guiding principles.
Following the ratification of the Visiting Forces Agreement (VFA)
in May 1999, the frequency and quality of interactions between U.S. and
Philippine armed forces has also improved. The AFP has actively
participated in initiatives to enhance regional cooperation and promote
regional security. It deserves credit for taking a leading and
responsible role in East Timor, contributing ground forces to the
International Force in East Timor (INTERFET) coalition, providing the
first force commander for the peacekeeping force of the U.N. Transition
Authority for East Timor (UNTAET).
The United States maintains its Mutual Defense Treaty with the
Philippines, and our defense relations have steadily improved over the
past year. The Defense Experts Exchange, a consultative group
established between OSD and the Philippines Department of National
Defense in 1999, has made progress in identifying the Philippines'
national security and force structure needs. The talks address ways to
help the Philippines increase readiness and become a more active
contributor to regional security. Operations with, and assistance from,
the United States cannot substitute for adequately funded armed forces,
and the Philippines has not yet made the necessary investments.
The Philippines continues to face significant internal security
challenges from organizations such as the MILF, the Communist New
People's Army (NPA) and the Abu Sayyaf Group. This past year, the
United States initiated a $2 million program using Nonproliferation,
Antiterrorism, Demining and Related (NADR) Program funds to train and
equip a counter-terrorist unit that will improve the AFP's capability
to deal with hostage taking and other terrorist incidents.

Thailand
A strategic ally, strongly oriented to U.S. military training and
equipment, Thailand aspires to adopt force modernization and
``jointness'' along U.S. models. Thailand consistently responds
positively to U.S. requests for access, training, and transit. Thailand
is one of the nations in Asia most committed to building regional
approaches to future challenges--peacekeeping, humanitarian assistance,
and transnational concerns. Exercise COBRA GOLD in Thailand is
developing into a multilateral training event to improve participating
countries' capabilities to cooperate in peacekeeping and humanitarian
missions.
Thailand has taken a leading Southeast Asian regional role in
support of peacekeeping by maintaining battalion strength forces in
East Timor. The current military commander in East Timor is Thai LTG
Boonsrang Niumpradit. We support humanitarian demining in Thailand and
will transfer that program over to Thailand by fiscal year 2002. Joint
Task Force Full Accounting Detachment-1 in Bangkok logistically anchors
our POW/MIA recovery efforts throughout Vietnam, Laos and Cambodia.
Within the last year, Thailand has requested U.S. assistance to the
Royal Thai Army in combating drug traffic across the Burma-Thai border.
U.S. Pacific Command is in the early stages of establishing a modest
program of assistance against this common threat. Joint Interagency
Task Force West (JIATF-WEST) is the standing task force for all
counterdrug (CD) issues in the theater and has the lead to work
training, equipment, and organizational coordination initiatives to
assist the Thais with their CD mission.

Australia
This year marks the 50th anniversary of the ANZUS treaty, and
Australia remains America's closest ally in the Asia-Pacific region.
Australian armed forces not only took the lead in East Timor
operations, but they remain the largest part of the U.N. security force
there. They also evacuated civilians and provided peace monitors in
Bougainville and the Solomon Islands. The Australian government has
been active in promoting the return of democracy in Fiji and in
promoting security and peaceful development throughout the archipelagic
states of Southeast Asia and the South Pacific. Australia has also
constructively engaged in dialogue with China and North Korea to
promote peace in Northeast Asia.
In recognition of our special relationship, we have pursued an
agreement to exempt qualified Australian firms from U.S. International
Traffic in Arms Regulations controlling unclassified military
technology.
Australia recently completed an extensive Australia Defence 2000
White Paper that clearly lays out its future defense requirements. The
White Paper achieved broad national support and general bipartisan
consensus through a unique consultation process that involved the
public and all government agencies. The product is a plan to acquire
the skills and equipment Australia will need to succeed across the full
range of defense tasks, along with required funding.

Singapore
Completion of the deep draft pier at Changi Naval Base signifies
Singapore's contribution and desire for continued U.S. presence in the
region. Though not an ally, Singapore is a solid security partner in
the Asia-Pacific region, a vocal proponent for U.S. access, and
supports and hosts multilateral activities. Singapore hosted PACIFIC
REACH, a multi-lateral submarine rescue exercise; participated in COBRA
GOLD and in numerous anti-piracy regional conferences; and is planning
a regional Mine Counter-Mine exercise in May 2001.
Singapore seeks greater interoperability with the U.S. Armed
Forces. It views high technology and advanced hardware as a deterrent
and is increasing its cooperation with the U.S. in Joint
Experimentation. Singapore participates with the Extension of the
Littoral Battlespace Advanced Concept Technology Demonstration (ACTD)
and is active in other experiments such as the Joint Mission Force and
Asia Pacific Area Network.

POW/MIA Efforts in Southeast Asia
Joint Task Force Full Accounting (JTF-FA) continues to make
progress on achieving the fullest possible accounting of Americans
unaccounted for as a result of the conflict in Southeast Asia. JTF-FA
conducted ten joint field activities (JFAs) in fiscal year 2000--four
in Vietnam, five in Laos, and one in Cambodia. During these JFAs, the
JTF-FA field teams investigated 219 cases and excavated 44 sites. JTF-
FA will continue to maintain its robust pace of operations in fiscal
year 2001, with ten JFAs scheduled--four in Vietnam, five in Laos, and
one in Cambodia. Each JFA is about 30 days in duration.
In calendar year 2000, 40 sets of remains previously recovered in
JTF-FA operations were successfully identified and returned to their
loved ones. As of January 31, 2001, Americans unaccounted for total
1,900. In the same period, JTF-FA recovered and repatriated 24 remains
we believe to be those of unaccounted-for Americans from Southeast Asia
(17 from Vietnam and 7 from Laos).
Achieving the fullest possible accounting of Americans is a U.S.
Pacific Command priority, and we will continue to devote the necessary
personnel and resources to obtain the answers the POW/MIA families so
richly deserve.

U.S. PACIFIC COMMAND PRIORITIES

The challenges to security and peaceful development in the Asia-
Pacific region require regional cooperation to address effectively.
They include:
--Unresolved wars in Korea, across the Taiwan Strait, and in Kashmir
that have flared, on occasion, but have been restrained for
over 50 years.
--Conflicting territorial claims such as the Spratly Islands, the
Kuril Islands, and the Senkaku Islands.
--Major powers--China, India, and Russia--that seek greater roles in
regional security.
--Communal violence driven by separatist movements and historic
grievances.
--And transnational concerns--including terrorism, illegal drug
trafficking, piracy, and weapons proliferation.
Our objective is an economically prosperous and interdependent
region that shares dependable expectations of peaceful change. To
achieve this objective, the strategy of the U.S. Pacific Command
involves:
--Deterring aggression in Korea;
--Determining the future of Taiwan by peaceful means;
--Encouraging responsible development of growing powers;
--Developing multilateral capabilities to handle complex
contingencies and transnational challenges;
--Planning for transition as security challenges evolve;
--And transforming our armed forces to increase their warfighting
edge.
The priorities for the U.S. Pacific Command in executing this
strategy continue to be readiness, regional engagement, transformation,
and resources.

(1) Readiness
During my comments today, I will discuss the status of many
programs. I should note, however, that the programs I will discuss, and
the associated funding levels may change as a result of the Secretary's
strategy review which will guide future decisions on military spending.
The Administration will determine final 2002 and outyear funding levels
only when the review is complete. I ask that you consider my comments
in that light.
U.S. Pacific Command forces must be fully ready to execute any
assigned mission. Readiness revolves around people. If we are to
recruit and retain the quality personnel that we need, service must be
professionally rewarding to the members of our armed forces and must
meet their personal and family needs. If we do not meet their basic
professional and personal needs, they have many, often more lucrative,
alternatives to a life of service to their Nation.
Professionally and personally rewarding service involves confidence
that financial compensation is fair, that educational opportunities are
available to prepare for a world that values knowledge, and that
healthcare is adequate. It also involves the provision and maintenance
of suitable housing and facilities in which to live and work. It
involves confidence that we fill personnel billets to match the tasking
and that we are properly trained to conduct the full spectrum of
operations expected of us. It involves having the resources to maintain
equipment in a high state of readiness both during and between
deployments, and adequate munitions to train and fight. It involves
adequately protecting our forces on and off duty.
Pay, Education, and Healthcare.--First, let me thank you for all
the positive quality of life initiatives in the Fiscal Year 2001
National Defense Authorization Act (NDAA). The pay raise of 3.7
percent, targeted Pay Table reform for mid-grade non-commissioned
officers, Basic Allowance for Housing amendments, partial reimbursement
for mandatory pet quarantine fees, impact aid to help civilian schools
educate military dependents, and Tuition Assistance up to 100 percent
for off-duty education are all outstanding efforts that servicemen and
women appreciate. Also, thanks to your support, the performance of DOD
schools is second to none, though we need help in funding operating
expenses and maintaining infrastructure.
We greatly appreciate the initiatives of the 106th Congress to
enhance the TRICARE benefit and its coverage to include our retirees
over the age of 65. This is the right thing to do--such Quality of Life
enhancements favorably impact recruitment and retention and ultimately
force readiness. And yet, challenges remain in establishing consistent,
adequate funding of the healthcare benefit in a way that does not
compromise other essential programs. We must ensure health services
support functions organic to our operating forces, which are not in the
Defense Health Program, receive adequate funding and attention within
the Service POMs.
Real Property Maintenance.--Real property maintenance (RPM)
continues to reveal the combined effects of aging facilities and under
funding. The current and accumulating RPM backlog for U.S. Pacific
Command components will amount to $7.1 billion over the next five
years, assuming no fundamental changes emerge from the Secretary of
Defense's ongoing strategy review. Funding intended for facilities
repair and maintenance often goes to more immediate operational needs,
and the backlog grows. The result is that our camps, posts and stations
across the U.S. Pacific Command are shabby and deteriorating. This
shortfall in real property maintenance affects readiness, quality of
life, retention, and force protection that we can no longer ignore. Our
people deserve to live and work in a quality environment.
Housing.--Good top rate housing that meets family housing goals of
2010 remains one of my top quality of life concerns. Projects are
underway, ranging from whole barracks renewals at Fort Richardson,
Alaska, and Schofield Barracks, Hawaii, to new family housing at Pearl
Harbor and Kaneohe Bay, Hawaii. Commander in Chief Pacific Fleet
(CINCPACFLT), Pacific Air Forces (PACAF), and Marine Forces Pacific
(MARFORPAC) expect to meet the 2010 housing goal if funding continues
at current levels for their programs. U.S. Army Pacific (USARPAC)
anticipates adequate housing for Hawaii by 2010 if their Residential
Community Initiative is successful. However, housing in Alaska and
Japan will remain inadequate until substantial MILCON funding is
allocated to their revitalization programs. U.S. Forces Korea (USFK)
and U.S. Forces Japan (USFJ) also face shortages, forcing service
members to live off base in Korea and Japan, often in inadequate
housing. Lack of available real estate acquisition for new housing is
the biggest obstacle in Japan and Korea. When additional real estate is
procured, we will need additional MILCON Housing funding to meet
requirements above what Host Nation Funded Construction can provide in
Japan and Korea.
Munitions.--Although we are beginning to procure additional
munitions, because they have just recently entered full-rate
production, or have yet to do so, a number of preferred munitions are
available only in limited quantities and do not support training and
operational requirements. Such already limited quantities have been
drawn down as a result of expenditures in Kosovo and ongoing
consumption in Operation SOUTHERN WATCH and NORTHERN WATCH. Alternative
munitions will get the job done, but with greater combat risk and
losses. Funding to further increase stock levels of preferred and
precision munitions is a top priority.
Force Protection.--Before the terrorist bombing of the USS COLE,
U.S. Pacific Command's Force Protection Program had expanded over the
last year to include rear-area protection program during increased
hostilities and critical infrastructure protection. The COLE bombing
resulted in a command-wide, top-to-bottom review of our antiterrorism
policies and procedures.
Funding obtained through the Combating Terrorism Readiness
Initiative Fund (CBT RIF) has helped with critical emergent
requirements, but the U.S. Pacific Command still has $110 million in
unfunded requirements. Joint Staff Integrated Vulnerability Assessments
(JSIVA) play a significant role in assessing our program and
identifying requirements.
Following the COLE bombing, the Command began a full reassessment
of vulnerabilities at ports and airfields not under U.S. control.
Negotiating force protection memoranda of understanding with foreign
countries is an ongoing process to ensure clearly delineated
responsibilities.
A major challenge is to prevent increased effort from becoming a
bureaucratic drill rather than a routine way of operating. Instructions
and checklists help, but they are not enough. Our commanders must think
tactically about force protection. On every deployment, every exercise
and even at home stations, we must ingrain force protection in the very
fabric of our forces. Having said that, terrorists can choose their
time and place of attack. That gives them an advantage. As long as we
are engaged around the world, there will be further attacks. Our goal
is to minimize the impact to our forces.
Staffing, Training, and Operations.--As we exploit information
technology and revise our organizations, the character of combatant
command headquarters is changing. Increasingly, headquarters staffs
perform operational functions that forward forces used to do. As
examples, my staff in Hawaii provided many logistics, communications
and intelligence support functions for our operations in East Timor
that allowed us to keep the number of U.S. personnel in country to a
minimum. This further reduced requirements for force protection and
living support. Also, PACAF is establishing a Joint Air Operations
Center at Hickam Air Force Base. This center will similarly perform
many functions of the Joint Forces Air Component Coordinator, reducing
the number of personnel that must forward deploy to conduct operations.
As our headquarters staffs become more involved in supporting
operations 24 hours a day, 7 days a week, in addition to their
administrative functions, we are finding our staffs working harder than
before, even as they downsize. We have turned to the Reserve Components
for help, and they have done a splendid job. But our shortfalls are
growing, and we are just beginning to exploit the capability that
information technology gives us to allow forward forces to reach back
to staffs.
Increasingly, the measure of staffs to deployed forces is shifting
from ``tooth to tail'' toward ``brain to brawn.'' While the fiscal year
2001 NDAA provides some relief from the fiscal year 1998 and fiscal
year 2000 NDAAs, there is still a requirement for OSD designated
activities to reduce personnel by 7.5 percent. These additional
headquarters cuts will hinder our ability to provide effective
management and oversight of command readiness and operations. It will
be difficult to execute these reductions in a way that does not impact
our operational readiness. In the U.S. Pacific Command our staffs are
fully engaged in operations forward.
We are experiencing shortfalls not only in available billets, but
also in the funds needed to train, exercise and operate our forces.
Particular areas affecting readiness are funding for flight hours, ship
depot maintenance, joint exercises, and reserve support.
The funds allocated to component flying hour programs (FHP) are
increasing, but not fast enough to cover escalating costs. The rising
costs of fuel and spare parts for aging aircraft appear to be driving
the escalation. These costs may increase even faster in the years ahead
as DOD aircraft and avionics fall further behind commercial standards.
The Navy FHP is growing 15 percent annually. PACFLT is facing a $317
million shortfall this fiscal year (fiscal year 2001). This figure
includes a MARFORPAC shortfall of $94 million. Both PACFLT and
MARFORPAC would exhaust their fiscal year 2001 FHP funding by August
without reprogramming funds. USARPAC's and PACAF's programs also have
shortfalls. The Services increasingly rely upon supplemental
appropriations to avert the consequences of unprogrammed escalation in
operations and maintenance program costs.
PACFLT's Ship Depot Maintenance Program continues to be underfunded
relative to the full requirement. Growing deferred maintenance backlogs
have been kept in check largely through execution year supplemental
funding from Congress. This affects battle group inter-deployment
training readiness, which continues to decline as training resources
are continually sacrificed to maintain deployed readiness. Forces enter
training cycles at low state of readiness, fall to lower levels and
then ``recover'' rapidly right before deployment. The resultant
``spikes'' in our readiness curves could become vulnerabilities if
asked to respond to unforeseen contingencies.
The ability of U.S. joint forces to fight in a seamless battle
space and to conduct combined operations with our coalition partners
will provide the greatest gains in U.S. warfighting capability over the
coming decade. Joint training represents 5 percent of the operations
tempo (OPTEMPO) of forces assigned to U.S. Pacific Command. Currently,
we are well within the congressionally mandated joint exercise man-days
reduction directives. Our USPACOM-wide man-day reduction through fiscal
year 2000 was 32 percent, 7 percent below the objective of 25 percent.
Simultaneously, we have shaped a solid Joint Training Program. This
program provides us confidence that our Joint Task Forces (JTFs) are
ready to fight. Further fiscal reductions to the Joint Exercise Program
put our JTF and joint warfighting readiness at risk. We need full
funding of the currently planned minimum exercise program. This
includes Service Incremental Funding and the Strategic Lift (STRATLIFT)
provided through the Chairman's Exercise Program. Inflation of flying
hour costs has increased exponentially over recent years, significantly
eroding our STRATLIFT buying power. This impacts us greatly in USPACOM
where STRATLIFT is our lifeblood due to our vast area of responsibility
(AOR). We need full funding to ensure we get the right forces, to the
right place, to exercise with the right joint and coalition partners,
so we can indeed remain ready.
Shortfalls also exist in funding designed to employ reserve and
National Guard personnel. U.S. Pacific Command's reserve billets are
based upon a single major theater war. Reservists' two week training
period is sufficient for them to support one major exercise per year,
which leaves the command short of personnel to support several other
major exercises in the joint training plan. Defense plans include
provisions for Reserve personnel to volunteer to support exercises, but
funds are inadequate to accommodate the volunteers.
Summary.--Overall, the majority of readiness concerns of a year ago
remain today. While making progress in some areas, we are declining in
others. I continue to have no reservations about the U.S. Pacific
Command's ability to do its job today. However, I do have doubts about
its ability to do so in the future unless we make more progress in
addressing structural readiness issues.

(2) Regional Engagement
While readiness prepares us to respond, through regional engagement
we shape the region to promote security and peaceful development.
Current circumstances provide the opportunity and the necessity to
develop more mature security arrangements among the nations of the
region. Opportunities derive from dynamic regional security
developments and a new generation of leaders willing to reexamine what
policies are genuinely in their national interest. Necessity derives
from strong nationalism, ethnic and religious rivalry, and historic
grievances that drive desires to settle old scores prevalent throughout
the region. Steady and focused efforts ensure the region develops in
ways favorable to American interests.
Engagement is a process to achieve national objectives, not an end
in itself. Our efforts improves the ability of regional partners to
defend themselves, deters potential aggressors, strengthens security
alliances and partnerships, increases regional readiness for combined
operations, promotes access for American forces to facilities in the
region, and promotes security arrangements better suited to the
challenges of the 21st century.
Enhanced Regional Cooperation.--Over the past year, the U.S.
Pacific Command has worked closely with the Joint Staff, Office of the
Secretary of Defense and the interagency community to develop enhanced
regional cooperation. The objectives of enhancing regional cooperation
have been to improve regional readiness for combined operations and to
expand the set of states in the region that share dependable
expectations of peaceful change.
Transnational concerns affect all states in the region in varying
degrees. Many of the states in the region contribute armed forces and
police to U.N. peacekeeping operations. Terrorism, weapons
proliferation, illegal drug trafficking, illegal migration, piracy, and
other transnational criminal activities represent problems that require
regional cooperation. Some of this is police work, and some of it is
military work. Different countries organize differently. Since
adversaries operate freely without regard for borders, seeking support,
bases of operation, and weak points to attack throughout our region,
the only way to win against them is international cooperation.
By developing capabilities to work effectively as coalitions in
complex contingencies (such as East Timor); as partners in countering
terrorism, illegal drug trafficking, and piracy; in managing the
consequences of chemical, biological or nuclear attacks, natural
disasters and accidents; in evacuating citizens caught in the path of
violence; in search-and-rescue of mariners in distress; and in
providing humanitarian assistance, the armed forces of the region
improve their readiness to contribute to combined operations. Working
side-by-side on these missions builds confidence and trust among the
participants as it improves operational capabilities. It provides a way
for states that want to exert more influence in the region to do so in
constructive ways that contribute to regional security. And, it
provides the United States with competent coalition partners so that
our armed forces need not shoulder the entire load.
The U.S. Pacific Command's efforts to enhance regional security
include expanding dialogue among the armed forces of the region,
developing standard procedures and training staffs to use them, and
exercising to hone our capabilities and learn where to improve.
In addition to my visits around the region and those of my
component commanders, U.S. Pacific Command sponsors a wide range of
activities to promote regional security dialogue. The Asia-Pacific
Center for Security Studies (APCSS--see Appendix A) brings together
military officers from around the region at the colonel/brigadier level
and government officials of equivalent grades for a 12-week course.
APCSS also conducts a one-week course for more senior officers and
officials, and hosts about five conferences each year. The U.S. Pacific
Command also hosts annual conferences on military operational law and
logistics, and for the past three years has held a conference for
Chiefs of Defense from around the region. These conferences have been
very effective in promoting military cooperation against common
threats.
At the Chiefs' conference, we also demonstrated our new Asia-
Pacific Area Network (APAN). APAN is a non-secure web portal, which
provides an internet-based communications and collaboration ability for
the armed forces of the region and civilian organizations that
participate in complex contingencies to share sensitive, but
unclassified, information. On it, we have begun web-based collaboration
by posting standard procedures for combined operations. These web pages
have mechanisms so that anyone can suggest improvements. Like many
things on the web, no government signs up to use these procedures, but
they are available for those who need them. Web-based planning and
distributed simulations are also possible to add new, affordable means
to build regional capacity. Additionally, the APAN concept provides a
simple and economical means to provide a networking of institutions and
training centers with this new form of collaboration and information
exchange. These networks will be the building blocks for Asia-Pacific
Security Communities that were previously unaffordable.
We also have held Multinational Planning Augmentation Team (MPAT)
conferences to refine procedures, and conducted workshops to train
staff officers from around the region as a cadre of Asia-Pacific
military planners ready to reinforce a multinational force
headquarters. We rely on lessons learned in East Timor and other
peacekeeping operations to improve the region's capability to conduct
combined operations. In November, the Philippines hosted an MPAT Staff
Planning workshop attended by eighteen nations, non-governmental
organizations and U.N. representatives. Many armed forces in the region
want to improve their abilities to work together, and use APAN to
continue their MPAT dialogue between workshops.
TEAM CHALLENGE links bilateral exercises COBRA GOLD with Thailand,
BALIKITAN with the Philippines, and TANDEM THRUST with Australia to
address bilateral training objectives and to improve the readiness of
regional armed forces to contribute to multilateral operations. This
year Singapore will participate and other nations, such as Japan and
Korea, will observe with an eye toward participating in future years.
In TEAM CHALLENGE we will exercise elements from the full spectrum of
missions that our combined forces may be called upon to do together,
from complex contingencies to humanitarian assistance.
These are examples of efforts to enhance regional security
cooperation. As we progress, we find many requirements to coordinate
better on logistics, intelligence and other aspects of our operations,
and take steps such as developing a coalition-wide area network
(successfully employed in RIMPAC, our multinational naval exercise).
With cooperation from the nations of the region, and the initiative
that my staff and my components have demonstrated, enhanced regional
cooperation and security communities have grown from a concept to a
substantial approach for promoting security and peaceful development
over the past year.
The reactions to the U.S. Pacific Command's efforts have been
largely positive, with some reservations. Some allies have expressed
concern that multinational efforts will dilute the quality of our
bilateral relations. For enhanced regional cooperation to succeed, we
must strengthen our traditional bilateral relations, focusing our
efforts on capabilities to pursue common interests, and then reach out
to other nations in the region. The TEAM CHALLENGE planning efforts
have demonstrated our commitment to meeting bilateral training
objectives and enhancing them with skills required for coalition
operations.
Other nations have expressed concerns that this is a precursor to
the United States reducing its involvement in the region. Quite the
contrary! By improving our capabilities to work together, the nations
of this critical region can more effectively address the broad range of
security challenges that none can solve alone.
Also, some nations fear that it is a scheme for containing China.
Instead, it is a way to encourage China to contribute to regional
security in constructive ways. We welcome the fact that China has sent
15 police officers as part of the CIVPOL contingent to East Timor. We
would welcome greater Chinese involvement in peacekeeping such as they
provided in Cambodia in 1994. The last class at APCSS included two
Peoples Liberation Army (PLA) officers and two officials from the
Ministry of Foreign Affairs. They learned that many nations in the
region share American security concerns and that cooperation in many
areas is in China's interest. The way ahead in U.S. Pacific Command's
relations with the PLA is, with the support of other armed forces, to
encourage cooperation in areas where our nations genuinely share mutual
interests, while maintaining that disputes must be resolved peacefully.
As with many nations in the region, we must work to transform PLA
leadership mindsets from measuring differences in military power to
measuring progress in regional security.
The $10 million in Asia-Pacific Regional Initiative (APRI) funds
provided by Congress in fiscal year 2000 and $24.6 million provided in
fiscal year 2001 have been essential to the initiatives to enhance
regional cooperation. The dollars we invest in these regional
activities pay huge dividends in U.S. security.
Currently, U.S. Pacific Command interactions with armed forces of
14 of the 43 nations in the region are restricted in some form. Some of
these restrictions are in the U.S. interest. Others, I question. I
encourage the close review of restrictions to ensure we have drawn the
lines at the right places. The objective is to build relationships and
influence for the long term as we exact penalties in the short term.
Foreign Military Officer Education (FMOE).--One area where I would
recommend eliminating restrictions is in foreign military officer
education. The experience of American officers who have attended
foreign military colleges provides an unparalleled understanding of how
foreign armed forces see their role and approach operations. Similarly,
foreign officers who attend American military colleges develop an
understanding of the value of professional armed forces, removed from
politics and subordinate to civilian government authority. They come to
appreciate that reliance on force to resolve internal disputes, rather
than political accommodation and economic development, stokes the fires
of rebellion and drives away investments needed for national growth.
They also acquire a deeper appreciation of America's interest in
maintaining international security so all may prosper. The contacts
they develop with Americans and officers from their region establish a
network for dialogue and become particularly valuable as they assume
leadership roles within their armed forces.
International Military Education and Training (IMET).--We should
also examine restrictions on many aspects of our IMET program.
Education is a long-term investment and the IMET program, a main source
of funding for FMOE, is our primary tool in this effort. I believe
unrestricted IMET programs are fundamentally in the national interest.
Some say military education is a reward for countries that behave
according to international standards. On the contrary, military
education is a valuable tool we use to gain influence with foreign
militaries. Military training--teaching tactical skills and equipment
maintenance--should be carefully tailored and controlled. However,
military education--study at Command and Staff Colleges--introduces the
ideals of democracy, civilian control of the military, and respect for
human rights, and should be available to all. Many reform-minded, pro-
U.S. military leaders in the Asia-Pacific region today are IMET
graduates who strongly advocate a continued U.S. presence and
engagement in Asia.
IMET is a modest, long-term investment to help build a secure,
peacefully developing Asia-Pacific region. Following a declining trend,
with your help U.S. Pacific Command's funding for IMET is now on the
right path. In fiscal year 2000 we received $6.659 million for 17
countries, and in fiscal year 2001 our budget is about $7.2 million for
19 countries. Further increases would yield real benefits to U.S.
security.
U.N. Convention on the Law of the Sea.--U.S. ratification of the
U.N. Convention on the Law of the Sea (UNCLOS) is another action that
would enhance regional security cooperation. Many Asia-Pacific
countries assert excessive maritime claims that challenge navigation
rights. Over the past few years, parties disputing territory in the
South China Sea have shifted their approach from occupying reefs to
negotiating over a Code of Conduct. In this and other disputes, the
U.S. position is that agreements should be in accordance with UNCLOS.
Ratification will strengthen our hand in demanding compliance with
UNCLOS requirements and in countering excessive maritime claims.
Summary.--We have continued to make significant progress this year
in better structuring our engagement programs in the Asia-Pacific
region to advance U.S. interests. Through continued emphasis on
education, dialogue, standard procedures, staff training, improved
communications, exercises and coordination on matters of common
interest, we will continue to expand the set of nations in the Asia-
Pacific region that share dependable expectations of peaceful change.
We will enhance regional cooperation and access of U.S. forces to
facilities in the region, strengthen alliances and security
partnerships, and deter aggression.
(3) Transformation
Transformation involves changes in operational concepts and
organizational schemes that take advantage of technology to provide
decisive advantages in warfare. The Armed Forces of the United States
are committed to leading that change in the 21st century. At U.S.
Pacific Command, our Transformation strategy is based on two parallel
initiatives--technology insertion efforts such as the Advanced Concept
Technology Demonstration (ACTD) program run out of OSD and the Joint
Experimentation program that is led by U.S. Joint Forces Command.
Since I last spoke with you, U.S. Pacific Command has been rewarded
for its aggressive pursuit of ACTDs with three fiscal year 2001 new
start ACTDs and a fourth ACTD-like project, bringing the total number
of ACTDs we are involved in today to thirteen.
The Tactical Missile Systems-Penetrator ACTD will provide a
penetrator weapon designed to deal with specific high threat targets in
Korea within three years. The Coalition Theater Logistics ACTD will
provide vital logistics command and control capabilities for coalition
forces operating in campaigns similar to that in East Timor. The Hunter
Standoff Killer Team ACTD will provide vital joint C⁴I
capabilities to engage time critical targets and massed armor. The
Coalition Rear Area Security Operations Command and Control
(CRASOC²) is an ACTD-like project in that it will have
streamlined management and early operator involvement.
CRASOC² will develop force protection C⁴I
capabilities to improve coordination between U.S. security forces and
host nation police and military agencies for improved protection of our
forces stationed overseas.
The Advanced Concept Technology Demonstration program is serving
U.S. Pacific Command well. We need such programs designed to get
advanced technology rapidly into the field for evaluation and
experimentation.
The pace of joint experimentation in the U.S. Pacific Command has
increased since I last testified before you. Over the past year, U.S.
Pacific Command has supported U.S. Joint Forces Command in the Unified
Vision and Millennium Challenge series of experiments and planning
conferences. We participated in Joint Warrior Interoperability
Demonstration (JWID) 2000 as a primary demonstration site and the
Combined Task Force Commander's headquarters in the Pacific Scenario.
We have agreed to team, as host CINC, with the Joint Staff and U.S.
Marine Corps in the execution of JWID 2002-2003 and have already
stepped forward to influence the C⁴ISR interoperability
challenges that will be addressed. We continue efforts to develop joint
interoperability at the tactical level through the Expanding the
Littoral Battlespace (ELB) ACTD. With the support of U.S. Joint Forces
Command and the Services, we have made significant progress in
developing the Joint Mission Force (JMF) concept into a capability.
A Joint Mission Force is a seamless Joint/Combined Pacific Theater
response force capable of accomplishing the full spectrum of missions
from a complex contingency through humanitarian assistance and of
serving as the leading edge of a major war. This force will execute
operations more effectively, rapidly and efficiently than we can today.
This transformation effort has moved from its infancy into wargames and
exercises that enhance our ability to rapidly form and deploy a Joint
Task Force. We have identified the top 10 challenges to more effective
Joint Task Force operations and have made significant progress in
developing procedures to address them. We also have incorporated JMF
and other mature experimentation into our exercise program.
We have concentrated our efforts over the past year on the
improvements we need to establish a relevant, common operational
picture and communicate tasking and information among the headquarters
of components of a Joint Task Force. Our JMF Command and Control
exercise program, or C²X, is identifying clear requirements
to enable a JTF and assess where specific deficiencies exist, with the
intent of fixing deficiencies by 2003. We are receiving strong support
from the Services in rectifying these deficiencies that are basic to
our joint warfighting capability. The greatest gains in warfighting
capability that we will see over the coming decade will come from our
ability to eliminate seams in the battlespace and let all units
assigned to a Joint Task Force exploit their full potential. We have
received significant financial and staff support from U.S. Joint Forces
Command in taking the JMF concept from its infancy to a near-term
capability. By including our allies and close security partners in our
wargames, we ensure that our JMF efforts are in harmony with our other
efforts to improve regional readiness for combined operations.
Australia, Japan, Korea, and Singapore all have the technological
resources to work with the United States in developing advanced warfare
capabilities. We share information on our efforts with these countries,
and work together to improve coalition interoperability at the high end
of military technology.
Some have expressed concerns that by strengthening coalition
capabilities and working with potential adversaries on skills required
for peacekeeping operations and complex contingencies, we are
jeopardizing our warfighting edge. The reverse is true. We are
continuing to widen the gap in warfighting capabilities between the
United States, its allies and partners, and potential adversaries. As
we experiment, we improve our readiness, enhance regional cooperation,
and transform our forces to meet the challenges of the 21st century.
Indeed, U.S. Pacific Command's priorities of readiness, regional
engagement, and Transformation are not wholly distinct activities. Let
me try to bring this idea alive by describing a visionary Western
Pacific deployment of a carrier battle group (CVBG) on its way to the
Arabian Gulf.
During workups, the battle group acts as the Navy component of a
joint task force under a realistic exercise scenario. The battle group
maintains a common operating picture with a JTF commander's
headquarters and subordinate Service components. During that time, it
experiments with a new C⁴ system being developed by the
Army--for example a new version of the Coalition Wide Area Network--
holding Common Operational Picture checks with brigade headquarters in
Australia, Singapore and the Philippines.
--As the battle group approaches Japan, it forms a two-carrier task
force, and conducts an area access exercise involving Japanese
and ROK forces in both coalition and opposition force roles.
The battle group joins the Japanese Global Command and Control
System (GCCS).
--It then integrates into the Korean area air defense and conducts
experiments integrating joint and combined fires, including
live ordnance fire on ranges.
--The task force then transits from Korea down to the South China
Sea.
--It exercises operational deception, employing information from
national technical means to evaluate effectiveness;
--It conducts Antisubmarine Warfare (ASW) exercises, working the
seams between CVBG and area ASW in littoral regions, developing
new concepts and establishing C⁴SIR requirements.
--It exercises area air and missile defense with an Air Force
component out of Okinawa and Guam, working Air Tasking Order
improvements and experiments with information operations, and
routinely operating with Global Hawk to hone new joint
concepts.
--The transit culminates with a dissimilar air engagement exercise
with Singapore and port calls in South East Asia. During the
port calls, battle group officers hold seminars with
counterparts in host countries to improve coalition
interoperability at the tactical level.
All of this could be done in 10-14 days. And what would we have
accomplished?
--Increased readiness of all forces involved, to respond to
contingencies;
--Conducted regional engagement that both reassured allies, and
deterred those who would use aggression to impose their will;
--Made progress in transforming the way we operate, both to take
advantage of emerging technology and to address emerging
challenges.
This vignette illustrates that readiness, regional engagement, and
the transformation of our armed forces are not distinct efforts,
accomplished by separate organizations at separate times. We do them
together, with operational units. If we experiment and adapt, we are
increasing our readiness, while we make the evolutionary changes in
technology and concepts which will lead to the transformation of
warfighting. If we do them with our allies and security partners, we
have the most effective kind of military engagement.
Transforming our armed forces to maintain their leading edge and
interoperability with coalition partners is essential to protecting
American security interests in the 21st century. Several members of
Congress have been active in pushing us to pursue this program, and we
need your continued support and leadership.

(4) Resources
The U.S. Pacific Command's ability to execute its strategy rests on
its ability to command ready, forward-deployed and forward-stationed
forces, to move them where they need to be in the theater, and to
reinforce them in the event of a major war. Ultimately this depends on
the resources Congress and the American taxpayers provide us. In this
section, I will discuss resources in several key areas that are
important to the Pacific Command's strategy.

Command, Control, Communications, and Computer Systems (C⁴)
Capabilities
Information technology is changing every aspect of warfare in an
evolutionary way and warfare as a whole in a revolutionary way. From my
perspective, C⁴ support fits into three main categories: (1)
an end-to-end infrastructure; (2) the capability to integrate and
process data into usable information and make it available when needed;
and (3) the protection of information.
First, the end-to-end enterprise enhances the ability to command
and control forces and consists of a space segment, a downlink
capability and the ground segment.
The U.S. Pacific Command's vast area of operations, covering 52
percent of the earth's surface, requires forces to rely heavily on
strategic satellite communications (SATCOM). Since my testimony to you
last year, we've made great strides in many of the SATCOM programs. For
example, we accelerated the Advanced Extremely High Frequency program
to compensate for a Milstar launch failure; agreed to launch a third
Wideband Gapfiller System satellite to complete global coverage as the
Defense Satellite Communications System constellation replacement; and
scheduled the launches of the three Milstar satellites. The challenge
is to keep these critical satellite programs on track.
As I also stated last year, my Joint Task Force commanders and
deployed units must have access to the strategic defense information
infrastructure, the Global Information Grid, or GIG. This capability is
critical to providing them with vital command, control, and
intelligence information. I strongly supported the DOD Teleport
program, as did many of my fellow CINCs, and I am now satisfied that
this program is on course.
Advances in the space segment and downlink capability provide
little value if we cannot push the information out to the user. The
base, post, camp, and station infrastructures must keep pace. Since we
still have antiquated cable plants, network wiring, and end-user
equipment, we must attack this ground infrastructure as aggressively as
we have the space segment. The recent decision that injected
significant funding into the U.S. Army's European and Pacific theaters
is a tremendous boost in our fight to keep pace with technology, and I
applaud your and OSD's efforts in directing that funding to us.
However, requirements go beyond the U.S. Army. The U.S. Air Force,
Navy, and Marine Corps are also encountering the same problems and
require much-needed funding support if we are to modernize entire
theaters. While single-Service efforts significantly help in the
modernization battle, we realize maximum payoffs when we collectively
raise all Services to the same capability level.
Not to be overlooked in the end-to-end infrastructure is the
frequency spectrum. We must proceed cautiously with the sell-off of DOD
frequencies since that loss directly translates into potential
operational risks. Once we sell them, they are forever unavailable for
military use.
The second C⁴ category involves converting data into
useful information that will optimize synchronous planning and
execution, and improve decision support. At the heart of this
requirement is interoperability and accessibility. Interoperability
allows all parties to share the same capabilities and information,
while accessibility allows them to get the information they require
when and where they need it.
The Global Command and Control System (GCCS) is the backbone of the
joint and combined command and control capability. Yet, Service
variants of GCCS are not fully interoperable with the Joint version.
For example, the GCCS Integrated Imagery and Intelligence application
being developed for the Joint version of GCCS is falling behind, while
the Services continue to modernize their individual intelligence
applications. To fix this, we must mandate new C⁴ systems be
Joint `from cradle to grave.'
There are also GCCS incompatibilities in combined operations; for
example, GCCS Joint and GCCS-Korea. These two systems share some common
operational picture data, but do not share information via files, e-
mail, and other web service tools. Obstacles to combined
interoperability lie in information release restrictions. Our allies
understandably restrict release of their classified information.
Likewise, we want to control release of U.S. classified information. To
achieve effective combined interoperability, we must develop much more
capable security procedures and sophisticated tools to allow
information exchange while protecting our national and allied data.
Technology is changing the way the warfighter prepares, trains, and
executes the mission. We must develop a mindset promoting innovation
and technology insertion. It is through continued support of Advanced
Concept Technology Demonstrations, experimentation programs, and
exercises with our coalition partners, that we find ways to improve
interoperability and enhance capabilities. We must put more emphasis on
acquisition by adaptation, put proven prototypes into a joint field
environment, and mature them through a tight spiral development cycle.
Information is power, and a fully interoperable infosphere allows us to
collaborate with coalition partners, share operational pictures,
increase the speed of command, and ultimately, win the day.
Obviously, sharing information among Services, sub-unified
commands, and coalition partners is a complex security challenge. That
leads me to the third category, Information Assurance (IA). How do we
provide access to, and share information with, Asia-Pacific countries
while protecting U.S. and coalition-sensitive data from potential
adversaries?
To improve IA in the U.S. Pacific Command, we are taking several
measures. We are evaluating the Automated Intrusion Detection
Environment. Our Theater C⁴ISR Coordination Center is
building a theater IA common operational picture (COP) (similar to the
COP we use in the command and control arena) and tracking intrusion
attempts and methods. We also are working closely with the Defense
Information Systems Agency on an improved configuration that will
provide full coverage of external connections to our Pacific networks.
Yes, we can improve IA in the theater; however, to do so requires a
heavy investment in people and additional hardware. The payback is not
always as easily recognizable as with the production of new airplanes,
ships, or tanks. You cannot touch and feel information protection, but
a loss of critical or time-sensitive information or a denial of service
can be far more detrimental to national security than a single weapon
system. I request your continued support as we implement IA into our
daily operations.
As you can see, C⁴ is a major concern in the Pacific and
my top resource priority. While we have made great strides recently in
addressing satellite communications shortfalls, we still have a long
way to go. We must now focus on modernizing the ground infrastructures
and ensuring the protection of our networks and the information that
traverses them.

Intelligence
Intelligence is essential to monitor potential adversary
developments and preparations so that we can train our forces for the
threats that they face and move them into position in a timely fashion.
Shortages of airborne intelligence, surveillance and reconnaissance
(ISR) assets--U-2s, RC-135s, EP-3s significantly impact USPACOM's
readiness ratings. These shortfalls diminish our situational awareness,
early indications and warning (I&W), and deep knowledge of the
capabilities, plans and intentions of key theaters in our area of
responsibility. Although Joint Staff planned allocation of airborne
reconnaissance assets is adequate for routine operations in the Pacific
Theater, we do not have the surge capability to monitor crises or
cyclical increases of potential adversary activities. Other chronic
shortfalls in high priority intelligence include linguists, tactical
signals intelligence (SIGINT) systems, intelligence specialists, and
intelligence interoperability.
The core of intelligence analysis and dissemination in the theater
is the Joint Intelligence Center Pacific (JICPAC), located near Pearl
Harbor. JICPAC's operational efficiency and impact suffers because
almost 100 JICPAC personnel must work in a revamped hangar at Hickam
AFB, due to space limitations in the main JICPAC facility. These split-
based operations cost almost $300,000 per year for the separate
facility, as well as lost time and efficiency. In addition, JICPAC's
building, in a vulnerable location near a major highway, presents a
serious force protection issue. At the same time, the Kunia Regional
SIGINT Operations Center (RSOC) occupies an aging facility, built in
1945, renovated for cryptologic operations in 1979, and then updated
throughout the last twenty years. Collocating the RSOC with the new
JICPAC facility on an intelligence ``campus'' would improve
intelligence exchange, analytical dialogue, and efficiencies in
infrastructure.
Advances in global telecommunications technology continue to place
enormous pressure on the need to modernize both national and tactical
cryptologic capabilities. USPACOM supports the National Security
Agency/Central Security Service's (NSA/CSS's) strategic transformation
actions and changes undertaken in the last year. NSA must transform to
address the global net, but warfighters' knowledge of adversary
battlefield communications will also continue to be a high USPACOM
priority. NSA must be funded to continue modernizing tactical SIGINT
collection capabilities, operations of the RSOC and accompanying land-
based collection architecture, addressing ELINT collection shortfalls,
and operations of the Information Operations Technology Center (IOTC).
Specifically, NSA needs more capable, joint tactical cryptologic
systems. Rapid advances in widely available communication technology
have rendered obsolete much of the current inventory of tactical
cryptologic systems. At the same time, the Services' R&D funding has
declined. NSA and the Services must continue to aggressively pursue
standards and common architectures, such as the Joint Tactical SIGINT
Architecture.
Increased HUMINT capabilities are critical to support collection
against strategic and operational requirements in the Pacific.
Improvements are needed to enhance collection against key USPACOM
indications and warning requirements and hard-target organizations and
countries. Continuing investment in theater-based HUMINT resources,
specifically computers and communications capabilities, is essential to
improve collection against hard targets. Any further Defense HUMINT
Service (DHS) reductions will adversely impact USPACOM-based U.S.
Defense Attache Offices (USDAOs), Field Operating Bases, and DHS
support to key USPACOM collection requirements and contingency
operations. The USDAO system, in particular, already is experiencing
serious resource constraints in the USPACOM AOR.
The Nation's future imagery and geo-spatial architecture will
deliver unmatched capability, including enhanced imagery collection
provided by unmanned aerial vehicles and the Future Imagery
Architecture. However, USPACOM warfighters will not reap the full
benefits of this capability without full tasking, processing,
exploitation, and dissemination (TPED) investment. A robust TPED
architecture is essential to ensure that dynamically tasked national,
airborne, and commercial imagery and geo-spatial products connect the
sensors to the analysts and, ultimately, to the tactical consumers.
Services and agencies must institutionalize the need to properly
program resources that incorporate TPED capabilities. Progress is
occurring and CINC interests are being addressed. However, we will work
to identify outyear funds to meet substantial portions of Senior
Warfighting Forum priority requirements. Specifically, the Services
must work with National Imagery and Mapping Agency to fund the
capabilities needed to make Joint Vision 2010/2020 a reality. These
include required technical enhancements to theater digital
infrastructure, advanced analytical exploitation tools, and improved
imagery analyst training (especially for advanced sensor products).
Asian linguist deficiencies are acute and a documented USPACOM
readiness concern. Despite additional student slots at the Defense
Language Institute, there are recurring and persistent shortages of
Asian linguists to meet Operation Plan (OPLAN) and Contingency Plan
(CONPLAN) requirements. Also, resources for low-density linguists in
support of probable Noncombatant Evacuation Operations (NEO) continue
to be problematic. Service recruiting and retention shortfalls, coupled
with the inherent difficulty of Asian languages and the longer training
periods required, aggravate these deficiencies.

Mobility Infrastructure and Strategic Lift
With congressional and Service support, we have made solid progress
in correcting deficiencies in our mobility infrastructure. A total of
15 MILCON projects are either in work or programmed through fiscal year
2004. We will apply supplemental MILCON funding for fiscal year 2001 to
critical en route and currently unfunded infrastructure projects, such
as those at Wake Island.
We support the fiscal year 2001 MILCON language that would restore
MILCON contingency funding. While we are making headway with some near-
term MILCON projects, sustained funding is still required. The
continued appropriation of resources is absolutely essential to
maintain an upward trend and complete the necessary repairs of our
aging mobility infrastructure.
In addition to a well-maintained mobility infrastructure,
contingency throughput in our theater largely depends on strategic
lift. As identified in the recently released Mobility Requirements
Study 2005 (MRS-05), there are ``areas where improvements are needed in
mobility programs * * * An airlift fleet of 49.7 million-ton-miles
per day, (the previous established level), is not adequate to meet the
full range of requirements.'' I fully support the MRS-05 recommendation
that ``DOD should develop a program to provide [additional] airlift
capacity.''

Army Prepositioned Stocks (APS-4)
A key logistics and sustainment shortfall remains in Army
Prepositioned Stocks (APS-4) in Korea. Sustainment shortfalls limit
ability to reconstitute the force and sustain missions, resulting in
increased risk. Major end item shortages include M1A1/A2 tanks, MLRS,
HEMTT fuelers, and some chemical defense equipment. Equipment shortages
currently total about $450 million. Lack of repair parts and major
assemblies within the APS-4 sustainment stockpile will directly impact
the ability to return battle-damaged equipment to the fight. The Army's
current plans are to cascade additional equipment into the APS-4
sustainment stocks over the next couple of years, thus reducing this
shortfall.

Infrastructure in Japan and Korea
The Host Nation Funded Construction (HNFC) programs in Japan and
Korea provide almost $1 billion annually in new construction to support
U.S. Forces. However, the United States must fund the initial project
planning and design (P&D) effort. For fiscal year 2001, the U.S. Army
Corps of Engineers allocated $20.5 million for the HNFC program. This
is a return on investment of 46:1. Continued congressional support for
the planning and design funding is critical.
One provision of the latest Special Measures Agreement is that
Japanese Facilities Improvement Program (JFIP) funds can no longer be
used for ``revenue producing'' projects. Examples of projects
disallowed in the fiscal year 2001 program were Army and Air Force
Exchange Service warehouses, exchanges, commissaries, and gymnasiums.
The effect of this provision is that additional MILCON funding will be
required for the Services, Defense Logistics Agency, Army and Air Force
Exchange Service, Navy Exchange, Defense Commissary Agency, and DOD
Schools to support Quality of Life initiatives for our service members
in Japan. We will need strong congressional support for these MILCON
projects when programmed. There has not been a MILCON project completed
in Japan since 1989.

New Headquarters Building
I would like to offer my thanks again for your support for the new
U.S. Pacific Command Headquarters building. We held the groundbreaking
ceremony in February and are on track to provide a facility designed to
support the 21st century.

Security Assistance
Security Assistance Funding in the Pacific Theater is an important
component of my Theater Engagement Strategy.
Foreign Military Financing (FMF).--For fiscal year 2001, two U.S.
Pacific Command countries will each receive about $2 million in FMF;
Mongolia, to increase its border security capabilities; and the
Philippines, for critical aircraft and patrol boat spare parts. State
Department has allocated FMF for East Timor, as those funds meet
legislative requirements.
Enhanced International Peacekeeping Capabilities (EIPC).--The Asia-
Pacific region needs better capabilities to respond collectively when
the United Nations or the nations of the region determine that an
international response is required. Approximately $2.2 million in
fiscal year 2001 EIPC funds have been requested for five Pacific
Command countries, to either enhance existing or establish new
peacekeeping operation (PKO) training centers. These well-spent dollars
are helping our neighbors share the PKO burden around the world.
Nonproliferation, Antiterrorism, Demining and Related Program
(NADR), and Overseas Humanitarian Disaster and Civic Aid (OHDACA).--
NADR funding has helped the Philippines improve its ability to deal
with terrorists, and, in combination with DOD OHDACA money, has done
much to reduce the threat of unexploded ordnance in Thailand, Cambodia,
Laos, and Vietnam. Anticipated fiscal year 2001 funding will expand
demining operations in those countries.
These Security Assistance programs, along with IMET, are crucial to
our continued engagement in the Asia-Pacific region, and I request your
continued support in their funding.

Center of Excellence in Disaster Management and Humanitarian Assistance
(COE)
Since its beginning in 1994, the Center of Excellence in Disaster
Management and Humanitarian Assistance has bridged the gap between
civil and military activities related to humanitarian emergencies.
Historically an annual increase to DOD appropriations has funded the
COE. Collaborating the resources and strengths of governmental and non-
governmental organizations, the Center of Excellence has participated
in relief efforts following floods in Vietnam and Venezuela,
earthquakes in Turkey and Taiwan, and population displacement in Kosovo
and East Timor. The Center's approach to response, education and
training, research, and consulting for disaster relief has become the
model for successful interaction between the military and private
humanitarian organizations.

CONCLUSION

In summary, Asia-Pacific issues are growing in importance on the
American security agenda. Our people are the foundation for everything
that we do, and providing professionally rewarding service must be our
first concern. Next must be our strategy, and ensuring that we have the
capability to sustain our forward basing, support increasingly
information-rich operations, and the mobility to move our forces across
this vast theater and across the globe. The coming year will continue
to present challenges for the United States in the Asia-Pacific region.
We neglect developments in the region at our peril, but with sustained
attention we can help build a region which will support American
interests over the long term.

Appendix A

ASIA-PACIFIC CENTER FOR SECURITY STUDIES

The Asia-Pacific Center for Security Studies (APCSS) is a regional
studies, conference, and research center in Honolulu. Established in
September 1995 as a preventive defense and confidence-building measure,
its mission is to enhance cooperation and build relationships through
mutual understanding and study of comprehensive security issues among
military and civilian representatives of the United States and other
Asia-Pacific nations. The cornerstone of the Center's program is the
College of Security Studies, which provides a forum where future
military and government civilian leaders from the region can explore
pressing security issues at the national policy level within a
multilateral setting of mutual respect and transparency to build trust
and encourage openness. Central to the College's effectiveness is the
relationships forged between participants that bridge cultures and
nationalities. Full and unobstructed participation by all nations in
the region, to include such countries as Indonesia and Cambodia, is
essential to achieving this. Complementing the College is a robust
conference and seminar program that brings together current leaders
from the region to examine topical regional security concerns,
including peacekeeping, arms proliferation and the role of nuclear
weapons in the region, and energy and water security.
The Center directly serves to further our regional engagement goals
in several ways. First, it serves as a resource for identifying and
communicating emerging regional security issues, within the constraints
of non-attribution. Secondly, the Center functions as an extremely
effective ``unofficial'' engagement tool to continue critical dialog in
cases where official mil-to-mil relations are curtailed. Recent
conferences and regional travel involving contact with, or
participation by, prominent representatives from China highlight this
role. Additionally, the Center frequently coordinates or hosts
conferences addressing topical issues of interest to the U.S. Pacific
Command or the region. Finally, the Center serves as a forum for
articulating U.S. defense policy to representatives from the region.
Authorization to waive certain expenses as an incentive for
participation, and expanded authority to accept domestic and foreign
donations to help defray costs are crucial to the continued success of
the Center.

Senator Stevens. Thank you very much, Admiral.
I came in late, so I am going to turn to Senator Inouye
first.
Senator Inouye. I thank you very much.
Admiral Blair, last year you were quoted as advocating
enhanced regional cooperation, multilateral exercises, and
dialogue as ways to create consensus among Asian countries on
specific security needs. I am certain you are aware that there
are those who question the utility of military to military
contacts with some countries in your region. Do you have any
response to this criticism? More broadly, what is your opinion
of engagement as a strategy in dealing with Asia?

MILITARY-TO-MILITARY CONTACTS

Admiral Blair. Senator, I am a strong believer in
engagement in the Asia Pacific region. It has to be engagement
with a purpose, not just activity. In the Asia Pacific region
we direct our engagement toward building U.S. influence with
the countries in the region, we direct it towards increasing
U.S. access, so that when we have to go someplace we have
available facilities within countries. Finally, we direct it
towards building more competent regional coalition partners so
that when an operation like East Timor occurs there are other
countries which can share the load with us.
So our program is focused. The human side of it is very
important. Let me give you two anecdotes, Senator. It has
appeared in the paper that a senior colonel from the People's
Liberation Army (PLA) has decided to pursue his career in the
United States rather than remaining in China. He is a person
who knows more about the United States than most any other
senior colonel in the PLA. I think knowledge of our country
breeds people who can work with us. In fact, in this particular
case, he preferred the United States.
I was visiting another country. I had had a particularly
unpleasant meeting with a general in that country, Cold War
attitudes would have been an improvement over what he was
giving me. As I came back out to my car, my escort officer, who
was a graduate of the Asia Pacific Center for Security Studies
(APCSS), just leaned over to me briefly. He could not do this
publicly----
Senator Stevens. Admiral, may I interrupt you? Pardon me.
Will those in the back row move forward a little bit, so
those people can get behind you and over into these chairs on
the other side. Those in the back row, move your chairs forward
a little bit so these young people can get behind you.
Thank you, Admiral. Sorry. Go ahead, sir.

ENHANCED MILITARY ENGAGEMENT

Admiral Blair. As I was getting in the car, this graduate
of APCSS leaned over to me and said: ``Admiral, I am sorry
about that meeting; there are those of us in this country who
know what we need to do.'' I believe that the reason he knew
what he needed to do was because he had spent those 12 weeks at
the Asia Pacific Center.
So I believe that engagement, done smart, done right, is
very much in the U.S. interest. On that score, I particularly
appreciate the Asia Pacific Regional Initiative (APRI) funding,
which frankly is an initiative of this committee. Those dollars
that you have made available to us we have spent on exactly
these kinds of activities, and I believe the results are
beginning to show.
Senator Inouye. Would International Military Education and
Training (IMET) also fit into this scheme?

INTERNATIONAL MILITARY EDUCATION AND TRAINING

Admiral Blair. Yes, sir. IMET is a big part of that, and I
am a big believer that the more IMET the better. I distinguish,
Senator, between education and training. There are certainly
military officers and noncommissioned officers that we do not
want to train to set better ambushes and to be able to lay
artillery and to be able to plan attacks. That is the training
piece and we should make that available strictly to people that
we know are going to use it for the right purposes.
But when it comes to education, sitting at Carlyle,
Pennsylvania, in the Army War College, Montgomery, Alabama,
Fort Leavenworth, reading books about what armed forces are all
about, I think that we should make that available to virtually
every armed force in the region. If I had my way, North Korean
officers would be taking that education, because I believe it
teaches them. It does not make them into American officers, but
when they go back into their countries, number one, they know
about this country; number two, they know how a responsible
armed force under political control, concentrating on external
defense, having in mind concepts like posse comitatus and the
things that we are raised with in the armed forces, these kind
of officers are the ones who are going to change these
countries and the ones who are going to deal with us over the
long term.
So the more education in IMET, the better for the United
States.
Senator Inouye. What would you suggest we do to enhance the
contribution made by the Asia Pacific Center?
Admiral Blair. I think you have got it just about right,
Senator. I know you were there when we opened the new building
last year. That is making a tremendous difference because the
campus-like atmosphere is contributing to even more interchange
among the fellows during the course, which is good.
We are gradually increasing the number of graduates, but we
need to maintain the quality. Right now we have 500 graduates
of that course who are out there. They are talking with each
other by Internet email, they have a regional focus. I think
the pace that we are doing that is just about right.
We would like the authority in two areas which are not the
province of this committee, but are of the authorization
committee. That is the ability to receive donations directly
from charitable organizations, including foreign charitable
organizations, and the second one is permanent legislation
authorizing APCSS to waive reimbursement of the costs of
attendance at their conferences and courses for attendees from
other nations.
They have been placed in appropriations language repeatedly
in past years and we would like the permanent authority to do
that for this committee. That would be the one single thing
that I would ask for, Senator.
Senator Inouye. I have a rather parochial question. I have
been receiving calls and letters suggesting that the 911
systems in certain military bases in Hawaii are not working as
intended. Can you comment on this?

ALL CALLS

Admiral Blair. I have received those same reports, Senator.
I am told we are working on them, and let me get back to you
with a more detailed answer on how that is being improved.
[The information follows:]

We currently do not have a seamless 911 system on Oahu. All
911 calls originating from military locations, including family
housing, are delayed due to the required manual re-routing of
the calls from the civilian/military dispatcher back to the
appropriate military emergency response unit (i.e., fire
department, ambulance, military police). The Joint Interservice
Regional Support Group (JIRSG) is working on a solution to
automate the military interface between the City and County and
Department of Defense Emergency Dispatches which will require
new equipment, updating the street mapping databases for the
on-island military installations (a major effort), and thorough
testing. All four Services are engaged in this unfunded Quality
of Life issue.

Senator Inouye. Transformation is a key word in the
administration at this time, primarily in the Army, but I
presume that all services are going through this exercise. Do
you have any thoughts on transformation?

ARMY TRANSFORMATION

Admiral Blair. Yes, sir, I do. I believe that the key to
transformation is not sitting back in a room making up ideas of
what the armed forces will look like in 30 years and then
putting it into the current acquisition system. I believe that
the key to transformation is getting out there and
experimenting and then improving based on what we find in the
field.
I visited Fort Lewis about 2 weeks ago and saw the Interim
Brigade Combat Team and it is doing just that. Interesting
things, like instead of the Army Training and Doctrine Command,
a bunch of colonels sitting around writing the manuals, the
Army Training and Doctrine Command is writing drafts, sending
them to Fort Lewis, and sergeants who are actually driving
these vehicles around look at the new documents and say: Nah,
this does not work, this does, you forgot about this.
So we are building it through the experience. But we only
gain experience from operations or from exercises and creating
artificial conditions. I believe that is the way to change.
We are doing the same thing in the Pacific Command with our
exercise program by taking part of our exercise and trying to
do it differently, and then drawing the lessons from that and
plowing it back in. So I am very much a believer in shortening
time lines of acquisition, adapting rather than trying to work
for a program 50 years in the future, and pushing the
responsibility down within the system rather than having it
come out of labs and warfare development centers.
I believe that the more that we institutionalize that kind
of approach, the faster we will get better.
Senator Inouye. Admiral, I would like to take this
opportunity to commend you and your command in the way you have
handled the recent tragic accident involving the Ehime Maru and
the U.S.S. Greenville. I think you have handled this matter
sensitively. You have gone out of your way. You have taken the
extra step. You do not often hear of a hearing panel consisting
of not only our admirals, but the admiral of another country.
I am certain that the Japanese government looks upon this
favorably. So if I may, I wish to commend you and your command,
sir.

EHIME MARU INCIDENT

Admiral Blair. Thank you very much, Senator. If I could
point to one--I would like to point to two names who have, I
think, handled this just right. One is Admiral Fargo, who is
our Pacific fleet commander; and also I would like to commend
Admiral Fallon, our Vice Chief of Naval Operations, who made
the trip to Japan to offer formal apologies on behalf of the
President and of the Navy.
I have been playing background music, but it is those two
admirals who have really done the heavy lifting, and I will
pass that on to you, sir--to them, sir.
Senator Stevens. Senator Shelby.
Senator Shelby. Thank you.

INTELLIGENCE GATHERING

Admiral Blair, what steps has the Pacific Command under you
taken to provide counterterrorism and emerging threat
intelligence data in support of forward protection efforts? Are
more resources necessary to properly mature these intelligence
support efforts? Are you concerned that we may soon face a
serious and potentially life-threatening intelligence failure?
In other words, what do you need? There have got to be
risks everywhere. Would you comment on that?
Admiral Blair. Yes, sir. I cannot do much about the
collection side of intelligence. As you know better than I and
better than most, to penetrate these terrorist organizations,
with their cell-like structure and the pretty tough initiation
practices that they have, is difficult. So to count on tactical
intelligence for an event, I do not think we can base our plans
on that.
So we have primarily taken intelligence action in two
areas. One is to consolidate our analytical areas, so that we
are not simply passing raw intel to all of our forces and
saying, you sift through it. But we have established a tighter
analytical cell at our headquarters. There is a new cell at the
Defense Intelligence Agency. We are forcing the analytical
community to make calls, to tell us what is different, to try
to do a systems approach to at least telling what they know and
what they do not know.
But I think, more than that, we are not counting on having
tactical intelligence every time. We have had pretty strong
force protection plans for our fixed installations, but we are
now applying that same methodology to our forces that go
through and make port visits, airplanes that stop, small units
that go for deployments, and we are looking at it from that
point of view.
Finally, we are trying to instill a tactical way of
thinking about it among our commanders. In the past, I will
tell you frankly, we thought of force protection as sort of
like getting your shots. If you receive your inoculation, you
are going to be okay. If you go through a checklist of items,
you are going to be okay. Now we are emphasizing to our
commanders that they have to think of terrorists as the enemy.
These are individuals who are going to come at you down a
certain street, across a certain piece of water, and you have
to treat them just the way you would in combat. You have to
think of your approaches, you have to have your people armed
and ready. You have to make risk management decisions on a
tactical basis.
I think this mind change will help us better. You do not
have the complete intelligence in combat. As you know, you have
to make plans based on not having that. So I think we are
increasingly a tougher target, which is important, and we are
better able to handle attacks should they come. I cannot sit
here and promise to you or to the parents of our service people
and their brothers and sisters and spouses 100 percent
protection, but I can promise you that it is getting better
every day and we do not have easy targets in the armed forces
of the United States. But to do our job we have to be out
there, and we are not going to have 100 percent protection
against determined terrorists who are willing to sacrifice
their own lives.
Senator Shelby. Admiral, could you comment on our ability
to disseminate intelligence data in the Pacific theater? Are we
properly supporting our forces in Korea? How can we help?
In other words, you have, as we all know, a broad scope of
command there. There is a lot of territory.

INTELLIGENCE DISSEMINATION

Admiral Blair. That is the one area, Senator, that I feel
okay about. We have a system that when a piece of intelligence
with time sensitivity and geographic specificity comes in we
get it to the troops who it affects. We get it to them at the
highest level of classification we can. But if all they have is
a telephone, we will call them on the telephone and tell them.
We test that periodically under a test system, and we can
get that data out to anybody in minutes. So that is the one
piece I feel good about. I just wish we had more to get out to
them.
Senator Shelby. Could you comment briefly on the ballistic
missile threats in the Pacific theater, in your operation area?

THEATER MISSILE DEFENSE

Admiral Blair. Yes, sir. The greatest threat is over 500
Scud-class missiles that are held by North Korea, and they can
target both South Korea, our troops there and our allies there,
and they can also target part of Japan. That is the single
largest threat we have.
The other missiles that we worry about, because we are
pledged to a sufficient defense of Taiwan, is the [deleted]
weapons which range Taiwan that are on the Chinese side, and
more are being installed all the time. So I am a very strong
supporter of theater missile defense, both sea-based and the
land-based. We need both in our theater in order to provide
force protection for ourselves and to be able to provide it to
our allies when we choose to.
As you know, Japan is cooperating with us on some of this
missile defense. Korea is not cooperating on the defense, but
they are purchasing Patriot missiles, which are point defense,
for some of their own platforms. As you know, the Taiwan arms
sales are under consideration right now by the administration.
So that is pretty much the set.
I would say, Senator, that these weapons, as we learned
tragically in the Gulf War when 30 Pennsylvania guardsmen were
killed by a Scud that in fact had been hit by a Patriot system,
that these are weapons of widescale destruction and terror.
These are not war-winning weapons. They are weapons that we can
deal with, but we should have better defenses against them.
Senator Shelby. Thank you, Mr. Chairman.
Senator Bond. Thank you very much, Mr. Chairman.
Admiral, my apologies for arriving late. I have been
enjoying the benefits of the finest naval medicine around and I
am just getting back. But I have a couple of areas where I
think that we have a number of areas of interest.
I wanted to follow up first with your comments on Taiwan.
With the threats of missiles targeted at Taiwan, is there not
a--is there an appropriate response in terms of our assistance
through Aegis-based anti-ballistic missile defense systems?

TAIWAN DEFENSE

Admiral Blair. Senator, as I told the Chinese themselves
last week, right now we do not have theater missile, theater
missile defense, that can engage the sorts of missiles that
threaten Taiwan. We are developing four systems, two land-based
systems, two sea-based systems. The two sea-based systems are
based on the Aegis technology.
As I mentioned, right now the [deleted] missiles that
Taiwan faces are not a war-winning capability on the part of
the Chinese. We dropped more than 15,000 precision weapons on
Kosovo and Serbia, by way of comparison, and you are familiar
with what the results of that were. These missiles face a
country of 22 million right now. So it is not an immediate
defense problem.
What it is is a trend which, should the Chinese continue to
increase the number and the accuracy of those missiles--and we
are pledged to sufficient defense of Taiwan--we will be
required to respond. So the best solution for China and for
Taiwan is restraint on the Taiwan side--on the Chinese side, so
that the United States would not support an arms race, but if
we have to maintain sufficient defense, we will. It is just
going to be at what level, what level of arms. The lower the
level of arms we can keep it, the more we concentrate on trade,
on travel, on financial instruments, on information technology,
things that will bring Taiwan and China together so that trust
will be built and eventually they can reach a political
settlement between them, the better.
Senator Bond. It would be very helpful if our friends in
the People's Republic of China understood that, and I
appreciate your clear statement on it.
You mentioned in your written testimony some of the
problems in Indonesia, and you have stated that you favor
eliminating restrictions on foreign military officer education,
particularly on IMET, which you have said is fundamentally in
the national interest. I had the opportunity to visit the
region in January and I found that among our friends and
partners there there was a very great fear of what is happening
in Indonesia.
One of the recommendations by knowledgeable leaders in
those governments, I think who share our views and values was
that Indonesia faces the possibility that internal conflict
could lead to chaos, and that chaos in Indonesia, the fourth
largest nation in the world, the largest Islamic nation in the
world, would be a disaster for that region and truly a disaster
for international security and our interests.
I asked them, I said, okay, what can be done about it?
Their conclusions--and it is almost like they talked together--
they all said the Indonesian military has to be brought back
into a position where they are disciplined and they have
appropriate training and they are able to restore security in
that nation of I guess 13,000 islands at high water.
They suggested that we pursue very aggressively exchange of
education, bringing foreign military officers to the United
States, participating in IMET. They also said that there ought
to be incremental but reciprocal and verifiable steps to
provide the equipment they need for their legitimate defensive
needs, perhaps coast guard and other spare parts and so forth,
equipment that they need to exercise the appropriate role, but
that we should do that in a phased basis, demanding reciprocal
steps from them which would show that they truly are abiding by
the appropriate standards of the military with due regard for
human rights.
Their suggestion, the suggestion of these observers and
neighbors of Indonesia, was that the police forces are so
inadequate that we cannot expect the police forces to maintain
security and that it is incumbent on us, through our military
presence, to exercise an aggressive, progressive, and positive
role in the area.
I note that Indonesia, back on one of these pages, when you
were talking about the priorities, U.S. Pacific Command
priorities, it did not exactly measure up as a priority. But I
get the sense that that may in fact be one of the significant
dangers our interests and international security face in
Southeast Asia. I would appreciate your comments and guidance
on that.

INDONESIA

Admiral Blair. Yes, sir. I support the basic outlines of
what you describe. I have heard the same advice from other
countries in the region and from Indonesians, in fact
Indonesians who are not members of the Indonesian armed forces.
I would add that I believe that the police also require a
lot of assistance and training. The United States does provide
that through the Department of Justice and I support that, and
I think that should be increased. As you know, the police were
separated about a year and a half ago from the armed forces and
they now are transitioning to report to the minister of the
interior instead of to the minister of defense. They are on the
front lines of internal order and I think that is good.
There is a justice system that has to be developed in
addition, with very few crimes, especially those that are of
concern to the international community, such as the killing of
the three international aid workers in West Timor last year,
are brought to justice in a timely or in a comprehensive way.
So I think we need to help strengthen the justice system.
Then I think we need to support those in the Indonesian
armed forces, the TNI, who are part of the reformist group.
This group within TNI seeks to pull out of internal security
over time and mainly concentrate on external threats. That
becomes more of a navy and more of an air force emphasis
because of the nature of the country that you mentioned.
The army needs to be paid properly. Right now a private who
is put out on the streets to patrol is terribly underpaid and
the temptations to him in terms of getting paid for doing other
things are pretty high. He is often not as well trained as he
needs to be. He is given maybe 3 weeks of training and then
sent out to very delicate, in the street peacekeeping missions.
So there are a bunch of across the board improvements that
do need to be made in the TNI. The way that I think that we
reinforce that is exactly as you said, with resuming officer
education so that we get Indonesian officers out, the good
Indonesian officers who are going to be leaders there, and then
that we carefully modulate our engagement with them so that we
support those things that are positive in TNI's development and
we do not support those elements of TNI and those activities
which can be used to oppress the people.
It's a series of tough individual decisions you have to
make along there. I think the right people to make them are at
the consultation between the ambassador and his people on the
scene, those of us who deal with them on a day to day basis,
and we sort of work our way forward as you described.
Just to finish off, Senator Bond, I am not one who believes
that Indonesia is going to fall apart in the near term. I think
Indonesia is going to continue as a unitary state with a lot of
turbulence. So I am not one who is telling you the sky is
falling. But we need to help Indonesia work in that direction.
Senator Bond. I certainly share your hope, but, I guess
just to finish up, you indicated steps that you need to take.
Just to bring it down simply, what do we need to do here to
remove the constraints, to provide the resources so that you
can take this phased steps of assistance towards stabilizing
Indonesia?

UNITED STATES ACTIVITIES WITH INDONESIA

Admiral Blair. Senator, there are two pieces of legislation
which restrict our activity in Indonesia. One was sponsored by
Senator Leahy, which keeps back any sort of training,
education, foreign military sales, until accountability is
taken for the August 1999 activities in East Timor, which were
bad, and the refugees are resettled.
Second, there has been a longstanding prohibition on
international military education and training coming from the
House of Representatives. Those two are the legislative
restrictions on them. I absolutely agree with the goals of that
legislation, which is to make the Indonesian armed forces
responsible and correctly acting. I disagree with the means. I
think military education is a way to reach those goals, rather
than a reward once you get there. Restrictions on arms sales
and restrictions on exercising, on military activity, I think
are entirely appropriate and we should not do that for a long
time with the Indonesians. But the things that help the
reformers reach the positive goals I think we should do, and
those two legislative restrictions prevent us, at least in the
officer education area.
Senator Bond. Thank you. Thank you, Admiral. I hope to work
with the leaders of this committee to see if we cannot move in
that direction.
Thank you, Mr. Chairman.
Senator Stevens. Thank you.
Admiral, I second what Senator Inouye had said about the
way you have handled these terrible disasters in your area, and
commend you and your forces for the way you have reacted in
such a humanitarian way.
I am a little disturbed about the comments you made, about
shortfalls in flying hours, ship depot maintenance, real
property maintenance, and joint training for this fiscal year.
Those comments did pertain to this fiscal year, did they not?
Admiral Blair. Yes, sir, they did.
Senator Stevens. Do you have any way to tell us how that
happened, what accounts for that shortfall? We thought we had
appropriated a sufficient increase in funds last year. Why are
we behind this year, for 2001?

FISCAL YEAR 2001 FUNDING SHORTFALLS

Admiral Blair. Senator, I do not have a third decimal point
answer. But the----
Senator Stevens. Did you get the allocation you asked for,
Admiral?
Admiral Blair. No, sir. We did not have a full year's
allocation at the beginning of the year for flying out the
flying hour program or for completing the depot maintenance or
for completing the service incremental funding of the joint
exercise program. The budgeting strategy had been, as it had
been the year before, to take supplemental funding and fill up
the third and fourth quarter funding to the required limit. As
that has not happened yet with the current strategy review
going on, the shortages would make themselves felt starting in
about August of this year in those three areas.
Senator Stevens. Well, we do have a dilemma and that is how
to sort of return to the normal process. In the last about 6
years, the administration took money from particularly the
Operations and Maintenance (O&M) accounts for overseas
activities, maintaining peacekeeping, other activities that the
President had the right to do under the law, and then came in
to us for a supplemental each year.
This is the first time I have heard that the strategy for
the budget itself for 2001 involved not contemplating a proper
allocation to regions such as yours for O&M. We are not going
to have supplementals like that again, I hope. We did not like
them and I do not think many people liked them. This year it
was my understanding that President Clinton did not take money
from O&M last year for these overseas accounts because we did
in fact budget for it. We gave money for Bosnia, we gave money
for Kosovo, we gave money for Kuwait, we gave money for the
operations for the cap over the Persian Gulf.
We fully funded, we thought, all those things. Now we find
this sort of embarrassing gap, because the two of us thought we
had funded properly the region we represent, and I am sure that
the other members of the Senate understood that.
How much money are you short?
Admiral Blair. I think one of the best examples, Mr.
Chairman, is in the Navy-Marine flight hour program. The
traditional amount of O&M that you spend per flight hour was in
fact requested and budgeted. However, the reality is as the age
of the airplanes is going up those costs are not realistic in
terms of being able to fly old airplanes like the P-3's, like
the EA-6's. In fact, the O&M costs are going up on the order of
15 percent per year, and that leaves a gap.
When you drive down into the analysis of it, it is not just
that fuel is costing more, which it is. It is primarily in the
depot-level repairables, where these airplanes are getting so
old that parts are breaking that were not budgeted for and in
many cases the companies that actually make that assembly are
no longer in business, so these things have to be hand-tooled
in depots.
Senator Stevens. I know you do not like to say, but how
much have you asked for? What do we look forward to for your
region to make up for this shortfall in this fiscal year?
Admiral Blair. In the flight hour program it will be on the
order of about $250 million to finish flying the flight plan
that the Pacific Fleet and Marine Forces Pacific need to fly
the budgeted hours.
Senator Stevens. Depot maintenance, how much?
Admiral Blair. I will have to get you that figure, sir. I
do not have that one.
Senator Stevens. Will you give us those figures for the
record. I know that the Department does not like to have us ask
such questions, but I think we ought to get prepared for what
is coming for this fiscal year. I would like to know for flying
hours, ship depot maintenance, real property maintenance, joint
training, and other funds that will be exhausted before the
completion of the fiscal year, how much do you need to carry
out your responsibilities.
[The information follows:]

Senator, our Fiscal Year 2001 Component Command Readiness
Supplemental Funding Requirements for the United States Pacific
Command theater total $974.9 million. The figures match those
recently provided by each of our components to their respective
Service headquarters and should match individual Service
numbers concerning our theater shortfalls. We are working with
the Office of Secretary of Defense, the Joint Staff, and the
Services to ensure that all of our critical requirements are
met.
A detailed breakout of our requirements follows:

Fiscal year 2001 Commander in Chief, United States Pacific Command
component command readiness supplemental funding requirements

Pacific Fleet (PACFLT):
Flying Hour Program (FHP) (Includes $76 million for Marine
Corps Forces Pacific (MARFORPAC))...........................$252.0
Ship Maintenance Program...................................... 244.8
Base Operations Support Program & Sustainment, Restoration and
Modernization (SRM)......................................... 130.0
Force Protection ($44.4 million in Operations & Maintenance,
Navy (OM,N) and $19.4 million in Other Procurement, Navy
(OPN))...................................................... 63.8
Ship Operations............................................... 20.0
Contingency Operations Support................................ 1.3
______
Total....................................................... 711.9
=================================================================
________________________________________________
Pacific Air Forces (PACAF):
Sustainment, Restoration and Modernization (SRM).............. 20.2
Base Operations Support (BOS)................................. 20.1
Readiness..................................................... 20.1
Real Property Services (RPS)/Utilities........................ 18.9
Contractor Logistics Support (CLS)............................ 15.4
Communications (C\3\I)........................................ 13.1
Quality of Life (QOL)......................................... 9.7
Anti-Terrorism/Force Protection (AT/FP)....................... 7.6
Training...................................................... 2.7
War Reserve Material (WRM).................................... 2.4
______
Total....................................................... 130.2
=================================================================
________________________________________________
Marine Forces Pacific (MARFORPAC):
Support of Operations in East Timor........................... 2.7
Strategic Lift................................................ 4.6
JCS Exercises................................................. 1.0
Utilities ($28 million for Base Operations & $13 million for
Family Housing)............................................. 42.0
Base Operations Support....................................... 10.0
Maintenance of Real Property (MRP)............................ 11.0
______
Total....................................................... 71.3
=================================================================
________________________________________________
U.S. Army Pacific (USARPAC):
Command, Control, Communications, Computers, Intelligence,
Surveillance and Reconnaissance (C\4\ISR) Joint Mission
Force ($5.9 million Other Procurement, Army (OPA) & $2.0
million Operations & Maintenance, Army (OMA))............... 7.9
Support of Operations in East Timor........................... 2.4
Joint Readiness Training Center (JRTC) Transportation......... 2.7
Utilities Price Adjustment & Government of Japan Burden Share. 4.9
A-76 Transition............................................... 3.8
Force Protection, Increment One............................... 1.0
Dunker Training............................................... .4
Training Ranges & ITAM (Integrated Training Area Management).. 7.3
Well Being (Morale, Welfare and Recreation/Family Support Pro-

grams)...................................................... 2.1
Facilities Sustainment........................................ 29.0
______
Total....................................................... 61.5
=================================================================
________________________________________________
Total for Pacific Theater................................... 974.9

(Note: All figures are operations and maintenance (O&M) unless specified
otherwise.)

Admiral Blair. Yes, sir, I will get you those figures.
Those are the same figures we are providing internally up the
tape.
Senator Stevens. I assume so, but they are not giving them
to us, Admiral.
Admiral Blair. Yes, sir.
Senator Stevens. We would like to know what is coming. The
immediacy of it is a problem. When will you run out of money?
Admiral Blair. July-August, depending on the account.
Senator Stevens. So you would need funds available by July
1?
Admiral Blair. Yes, sir.
Senator Stevens. You also stated that family housing in
Alaska--we both get a little provincial here and we are proud
of it, so I am not disturbed about that--is inadequate because
MILCON has not been properly assigned to our region for family
housing. That worries me in view of the potential that we may
face some reallocation or realignment of force deployment in
the Pacific in the future.
What is your idea, what is your time frame and plan for
that, to meet that need?

MILCON-FAMILY HOUSING

Admiral Blair. Senator, as you know, this is a marathon,
not a sprint, to update the housing. In Alaska in particular--
and also, there is more than one way to provide adequate
housing for our families. The traditional MILCON way is one
route, but some great imagination has been shown by General
Gamble and the Pacific Air Force in terms of public-private
ventures, and Alaska is one of the areas in which we are on the
verge of success there.
Fort Wainwright, on the other hand, has these 75-some odd
units of what is basically postwar housing that is inadequate.
Whether we can use the Air Force model and do it that way or
whether it needs a MILCON project, I am not sure. But we do
need to replace that over time.
In Senator Inouye's area, now you can drive into Pearl
Harbor with pride and see good new housing on either side of
the gate there. You can go up in the back reaches of Schofield,
though, and we could film ``From Here to Eternity'' again and
never have to do any changes to the sets. So it is a case of
working through it.
The Department as a whole is committed to having all of our
housing meet suitable criteria by 2010, and if we can sustain
the levels of funding we have had in the recent years and we
can bring home the public-private ventures that are
contemplated and we can overseas continue the level of support
by Japan and Korea that we have currently, then, with the
exception of some units in the Army Pacific, we can meet that
goal.
I believe, Mr. Chairman, that it is the progress towards
that goal that is really as important as saying that tomorrow
every single set of quarters will be adequate, because people
move and people are going. As long as we are heading the right
direction, I think that we are in good shape. We need to
support that right direction, sir.
Senator Stevens. Your figures are that they are 75 family
housing units short in Fort Wainwright at the present time?
Admiral Blair. I know those particular 75. Let me amplify
that answer. Those are the ones that I have driven around--I am
sure you have as well--that we should not have people living in
2001.
Senator Stevens. Thank you.

NORTHERN EDGE FUNDING

We welcome the Northern Edge exercise that is ongoing now
in Alaska, I was a little disturbed to hear, however, that
funding for the exercise was released by the Pentagon 10 days
after it started. How did that happen, Admiral?
Admiral Blair. Mr. Chairman, we are in a transition year.
As you know, in the past that was a year by year exercise based
on appropriations. We now have put it into our authorization
and plan program. This was the year in between and so the money
was not in the right place at the start of the exercise.
Working with the components, we moved the money from other
accounts so that we were able to start the full exercise on
time, and then we paid ourselves back, as you said, within 10
days of the exercise. I do not anticipate repeating that rope
dance next year.
Senator Stevens. That did not create any part of the
shortfall, did it?
Admiral Blair. No, sir. We planned and executed it as if we
were going to have it and then it did come in, and so we paid
ourselves back. It took a lot of hard work by people like
General Tom Case, who, as you know, is now my deputy, was the
former commander in Alaska, and working with General Schwartz
they made it happen.
Senator Stevens. Incidentally, I want to commend General
Schwartz for his public statement concerning the paint-bombing
incidents in our State.
Admiral Blair. Yes, sir.
Senator Stevens. It offended us all. I have seen the tape,
as a matter of fact, a strange tape, strange that people would
take a tape of themselves doing what they did.
But I do commend him. He was forthright and came right out
and put the position of the military right on the table. There
was a rumor that one or more of the people involved had been
dependents of military people. We still do not know whether
that is so or not. But he stepped up to the plate and stood
very straight on that issue, and we are very pleased to have a
General like that in our command.
Admiral, you are just back from China. We had to cancel our
trip to China. I am very interested in your observations about
the China situation as far as the future here is concerned. My
colleagues sort of, if you will pardon the phrase, danced
around the basic problem of Aegis acquisition. Have you come to
a conclusion about that?

CHINA

Admiral Blair. Yes, sir. I have shared my recommendation
with the administration. I would just as soon let them make the
call, but I have told them what they need to maintain military
sufficiency.
Senator Stevens. We have had great interest in China. I
want to state that I admire the answers that you gave to
Senator Bond. But there is a lot that goes into that statement
that assumes that the Chinese are ready to work with us. Can
you give us your opinion about that? Is there any indication
that the Chinese in terms of their modernization plans and
their own deployment will desist from establishing a
provocation that would lead to a demand for ever-increasing
upgrading of the capabilities of the forces on Taiwan?
Admiral Blair. So far, Mr. Chairman, they have gradually
increased their ability to threaten Taiwan. But with Taiwan's
own improvements, including the equipment that we have sold
Taiwan, including what they produce themselves, and including
what they buy from other countries, Taiwan has been able to
maintain the qualitative edge to offset the geographic position
and the quantitative edge that a country of 800 million people
will have. So the sufficient defense that we are pledged to has
been maintained.
The PLA is continuing to modernize its armed forces.
Talking with PLA leaders, they have been told that China does
not give up the right to take military action against Taiwan
and they are carrying out orders to be able to increase their
capability to do that.
I would say that they have not--that they could have gone
faster than they did. The improvements that you see are not
their absolute top priority. The PLA has many other missions--
defense of a wide, a huge long border; internal security,
particularly in the far west and in Tibet and areas like that.
So Taiwan is not the only focus of the PLA and that is not
all they are spending their money on. In addition, military
modernization, although it has received more attention in
recent years, it is the fourth of the four modernizations that
China is pursuing. As you know from your previous visit to
China, when you go to China they are mainly working on economic
development, getting rid of those state-owned enterprises,
increasing the wealth and the efficiency and trying to plug
into the world.
When President Jiang and Prime Minister Zhu wake up every
morning, the first four or five things they think about have to
do with economic development and social improvement. You get
down the list before they are worrying about improving their
ability to take on Taiwan militarily. So I think that there is
an area there where there could be further restraint on their
side that would keep the military option off the headlines and
out of the debate, and I think that is the right thing to do.
I have thought through the consequences of a conflict
across the Taiwan Strait very carefully and all I see are
losers. There is damage to military forces on both sides. There
is damage to civilians on both sides. There is tremendous
economic damage in China, losing the foreign investment and a
lot of the trade. There is tremendous commercial damage to
Taiwan. At the end of the day, it is not successful from
China's point of view; Taiwan is still, is not taken over.
That is a loser for both those countries. The win for both
countries is over the long term to emphasis the things that
bring them together and to reach some sort of a political
arrangement. That is what is in the long-term interests of
China and of Taiwan. The way we get there is by de-emphasizing
military escalation, by de-emphasizing military rhetoric, and
by showing restraint on both sides.
But it does take two to show restraint. In particular, the
missile buildup on the Chinese side I think is the part that is
the most threatening right now. I talked about that with the
Chinese and I think that is the important area in which we
should look to them for restraint.
Senator Stevens. I think we agree with you. As you know, I
served in China in World War II and have gone back as often as
possible. Senator Inouye and I make trips there whenever we
can. I am sad that we cannot go this year.
But when we look at the situation there, we have been
convinced that there is a generational problem there. As the
new generations come along, we think that the strain between
the mainland and Taiwan will decrease. There is every reason in
the world for China as a republic to upgrade its military and
to modernize in view of its position in the world, particularly
in that it has the resources that it has and the population
base that it has.
But it worries me considerably that we are about ready--it
looks like we are being pushed towards a collision course here
as far as the Aegis is concerned with regard to a request to
purchase that equipment because of the increased activity along
the coastline opposite to Taiwan. We would welcome any
suggestions you might have as to what we might do to help you
with regard to your comments that you have made on China.
Clearly, from my point of view China remains the potential
partner in the world as far as this country is concerned,
economically and even eventually politically, I think.
But right now we are still trying to overcome some of the
strains of the past. I would hope that we can find some way to
deal with this issue without trying to resolve it in the
Congress, is what I am saying. I do not know what the results
of your recommendations will be, but we are under a new
administration. The President said he wants to treat China as a
strategic competitor and not as a partner yet. But I think the
time will come when we should look at them as a partner in
terms of goals throughout the world.
I would welcome, we would both welcome, your suggestions as
time goes along.
Do you have any other questions, Senator?
Senator Inouye. Mr. Chairman, if I may follow up.
Obviously, one of the major areas of contention in Congress
will be the so-called arms sale to Taiwan. It has been the
policy of the United States to provide defensive arms, although
there are some who would contend that any sort of arms would be
offensive.
Would you consider a Patriot battery as being offensive?

TAIWAN ARMS SALES

Admiral Blair. No, sir, I consider that as being defensive.
Senator Inouye. In the array of ships in the fleet, would
you consider a destroyer to be offensive? For example, I would
consider a submarine and an aircraft carrier, to be power
projectors and therefore offensive.
Admiral Blair. Senator, the way I would define defensive
systems are those that would enable Taiwan to deal with an air,
naval, or ground attack on them. The systems which would be
used to intercept those sorts of operations I would consider to
be defensive systems.
The Aegis platform and Kidd class destroyers, have also
been talked about as being available, are considered fleet air
defense systems as they are currently configured. That is, they
intercept anti-ship missiles which are fired at the fleet. They
also have anti-submarine capability. In the context that we are
talking about, I think those are defensive, that class of ship
is a defensive system.
Senator Inouye. So you would suggest that we are still
within the present policy of not providing offensive weapons?
Admiral Blair. With either of those two platforms, yes,
sir.
Senator Inouye. Thank you very much, sir.
Senator Stevens. The last question. Admiral, about the
situation in North Korea, it has been some time since we were
there. How long since you were there? Have you been up there?

NORTH KOREA

Admiral Blair. I have never been to North Korea. I looked
at it last week, but did not set foot on it.
Senator Stevens. I think I am interested to know what the
level of their modernization is to your knowledge, if we can
talk about that here.
Admiral Blair. Yes, sir, I can talk in general terms about
it. It is just incredible. The economy is still flat on its
back. North Korea cannot feed its people, and yet it continues
to keep this million man army supplied. It has a program to
modernize the equipment. [Deleted]. They are spending, at a
time when you have to keep your coat on in North Korean
buildings all the time, indoors or outdoors, it is allocating
fuel to training.
[Deleted].
So it is quite clear that North Korea is maintaining a
strong military capability, which is 70 percent down on the
demilitarized zone (DMZ) threatening Seoul and others, as it
relies on external assistance to feed its citizens. When you
look at a picture of North Korea at night, you only see a
couple of lights in the Pyongyang area and the rest of it is
dark because there are no lights available.
I mean, we have kind of gotten used to it over the years,
but it is just a bizarre imposition of resources on the North
Korean people in order to maintain a military capability.
General Schwartz and I keep a very close eye on that, and if
conflict breaks out we are going to win, but you do not see a
lowering of military tension on the North Korean side to match
the offers that they are making in other areas in terms of
economic development and diplomatic consultation. There is very
much a ``military first,'' to use North Korea's own words,
policy there.
Senator Stevens. Their readiness has not declined during
this period of severe strain on their economy?
Admiral Blair. They have maintained their readiness during
this period, yes, sir, and in some ways increased the
capability of weapons.
Senator Stevens. Well, I do thank you again for coming. We
are going to submit some of the questions we have.
Particularly, I would like to know about the funding of your
areas of operations down around East Timor. I have not asked
you too much about what is going on on the strategic review
because I assume it is not at the point where we can discuss
it.
But I do hope that you can. I would like to have us take
our subcommittee out and visit with you and your command again
this year and hopefully get a more in depth briefing on the
status of our forces and the potential. Any thoughts you might
have about potential redeployment of forces, so that we do not
get behind in that and we have the capabilities if you might
consider redeployments?
I must say, many of us hoped that we would face the problem
of deciding what to do with forces in South Korea. We thought
for a while things were going to calm down and cool off. But I
do not see that happening now, and from what you have said I
gather you do not, either.
Admiral Blair. Sir, I think we have a ways to go before we
see real military capability go down to the point that we
should change our force posture. As you know, President Kim,
who from my mind has the clearest eye view of what is going on
there, very much wants a U.S. military presence in his country,
to which he is willing to contribute, even following
reunification. It would not be the same posture that we have
now. It would have different characteristics. But he believes
that is in his country's interests, and I believe it is in our
country's interests.
Senator Stevens. As my friend from Hawaii said, the future
expansion and capability of our economy is in your area, and I
think that there is no question that we have to maintain a
robust presence in the Pacific. We would like to be able to
work with you. We will not be marking up this bill as early as
we thought this year, so hopefully we will have a chance to
confer with you before we get around to the markup of the
Defense Subcommittee bill.
Any further questions, Senator?
Senator Inouye. No.

ADDITIONAL COMMITTEE QUESTIONS

Senator Stevens. Again, thank you very much for coming.
This is a very strange period of time here right now, Admiral.
I hope you will pardon the conversations that went on and the
notes that had to be passed back and forth to keep going with
our friends who are on the floor at the same time we are here
with you.
Thank you very much.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted by Senator Ted Stevens

STRATEGIC REVIEW

Question. In your capacity as Commander-in-Chief of U.S. Pacific
Command, what engagement and role have you played in Secretary
Rumsfeld's strategic review?
Answer. Secretary Rumsfeld has provided me a draft copy of his
defense strategy review for comment, and I have provided a response.
Question. There are reports in the press that the strategic review
will recommend a shift in focus toward the Pacific, a strategy that
Senator Inouye and I have long advocated. Can you comment on why the
Pacific Ocean is the most likely theater of future major U.S. military
operations?
Answer. The Asia Pacific region contains about 55 percent of the
world's population including the world's two largest countries: China
and India. About one-third of U.S. trade is with countries in my
theater, which produce 26 percent of the Gross World Product. The
region has the world's six largest armed forces: China, United States,
Russia, India, South Korea and North Korea, four of which have nuclear
arsenals: United States, Russia, China and India. China, Russia, India
and Indonesia all seek to extend their influence in the region over
time. Japan is reevaluating its defense posture. Communal violence
caused by civil wars, religious and ethnic differences flares
throughout the region. This combination of population, military forces,
competing developing nations and economic potential is unique this part
of the world. Unless the United States is engaged and steady in its
relations with the Asia-Pacific region, it risks a region of rivalry
and conflict.

OPERATING CHALLENGES

Question. What are your major operating challenges that are unique
to the Asia-Pacific region?
Answer. Operating in the Asia-Pacific region presents a myriad of
unique challenges. The United States Pacific Command (USPACOM) area of
responsibility contains 43 countries, and over 105 million square miles
totaling 52 percent of the earth's surface. The region spans 14 time
zones. Countries in this region field the world's six largest armed
forces. Four of them also have nuclear arsenals. Conflict in the region
would potentially involve large-scale combat. The rich resources
throughout this region also present potential flash points for crisis
and conflict. Additionally, the governments and societies of major
countries in the region are in transition. The strategic landscape also
includes significant transnational threats. First is proliferation.
There are four countries in the region with nuclear weapons capability,
and many more with chemical and biological capability. This widespread
capability increases the threat of weapons of mass destruction use
against United States forces and citizens. Next is terrorism. While
significant terrorist incidents in the Asia-Pacific region trail those
in other parts of the world, terrorist related events show an
increasing trend. Finally, drug trafficking throughout the Asia-Pacific
region continues to threaten the United States and other countries in
the region. Rich in resources and full of potential flash points, the
Asia-Pacific region poses unique challenges to our nation.
As the military element of U.S. national power in the Asia-Pacific
region, USPACOM has the following mission: Ready today and preparing
for tomorrow, the USPACOM challenge is to enhance security and promote
peaceful development in the Asia Pacific region by deterring
aggression, responding to crisis and fighting to win. Ready Forces are
the first component of our strategy. Our Pacific forces consist of
forward deployed, forward based, and forces based in the continental
United States. Our overseas deployed forces consist of forward-
stationed forces, located primarily in the Republic of Korea and Japan,
along with maritime forces afloat in the western Pacific. Our command
has forces forward based and home ported in Hawaii and Alaska. The
total overseas deployed force is about 100,000 military personnel.
Finally, USPACOM also has forces on the West Coast of the United
States. The total of all is about 300,000 military personnel. This is
the largest number of U.S. military personnel dedicated to any regional
theater.
Preparing for tomorrow is the second component of our strategy.
Joint Vision 2020 is the conceptual template for the development of
future joint warfighting. Based on high quality people, equipped with
the technology of the information revolution, the armed forces of the
United States will be faster, more lethal, and more precise than today.
We will achieve this vision by joint experimentation (JE). Through JE
we seek to leverage joint and combined operational concepts and
technologies. We seek breakthroughs in joint and coalition warfighting
as we transform our operational schemes to the circumstances of the
21st century. As USPACOM and our allies and partners exploit the
opportunities of the revolution in military affairs, our challenge will
be to ensure our objectives are met across the spectrum of major
theater war, crisis response, and regional engagement.
The heart of our mission is to fight and win. Nowhere in the Asia-
Pacific region is this part of the mission more clear than on the
Korean peninsula. For the past 50 years the Republic of Korea and the
United States have successfully checkmated a North Korean regime openly
committed to reunification of the peninsula by force. The U.S.
contribution to deterrence includes a mechanized division and air
forces maintained at peak readiness. Ready to fall in on these troops
are powerful naval, air, and ground forces, some already in the
Pacific, both ashore and afloat, and others in the United States.
A critical challenge to our mission is our day-to-day engagement in
the theater to enhance security and promote peaceful development. By
remaining a regional military leader our intent is that no nation will
believe it stands to gain by military aggression. A secure peace
provides the foundation for prosperity and personal freedom to grow.
Our goal is to help nations in the region to learn to be multilateral
partners rather than regional adversaries. We want to expand the
foundations for multinational security arrangements, to include all
nations who desire to participate. Our ultimate intent is to create
conditions where states do not perceive each other as enemies based
upon historic animosities, but come together to deter any power that
would threaten regional peace. Regional engagement involves encouraging
and reassuring allies and security partners, and promoting professional
relations among all militaries in the Asia-Pacific region.
An integral component of our engagement activities involves our
Joint Exercise Program. Bilateral and multilateral exercises are a
primary means for developing and evaluating operational readiness. Over
80 percent of USPACOM's exercise activity involves training forces and
staffs in the tasks they need to successfully perform assigned
missions. The remainder is for basic skills. Last year, USPACOM
conducted over 300 exercises with 37 countries, many joint/combined
exercises with allies throughout the theater. Our exercise program
faces unique challenges with the tyranny of distance created by the
vastness of this area of responsibility coupled with cost escalation
and reduced funding.
USPACOM is here to stay in the Asia-Pacific region with ready,
powerful, forward-deployed forces. Operating with allies and partners
in the region, we deter aggression, we respond to crisis, and we engage
in a wide range of day-to-day activities throughout the region. For the
future, we are developing new dominant warfighting capabilities through
joint experimentation. We are working to build on our many strong
bilateral relationships to form multilateral security structures in the
region, building a foundation for peaceful development to the entire
region's benefit. The aforementioned efforts address our unique major
operating challenges in the Asia-Pacific region. Our current readiness
deficiencies, reduced funding, large geographic coverage, major
emerging requirements with declining resources, create additional
burdens and strain our ability to meet these challenges.

FORCE STRUCTURE

Question. We've maintained the ``base force'' in the Pacific since
the mid-1980s. A lot has happened in the region in the intervening
years. How should we look at changing, reducing, or repositioning those
forces in the years ahead and is that effort underway?
Answer. I have provided recommendations to the Chairman and to
Secretary Rumsfeld. The Secretary is conducting his review precisely to
answer these types of questions. I will say this however; we have seen
substantial diplomatic movement in the last year on the Korean
peninsula. But I do not envision any change to or reduction of our
forces there until the North Koreans are ready to reduce their military
posture as part of some verifiable confidence building measures; so
far, they've been unwilling to do that. As for the rest of Asia, this
is one area of the world where daily activities of the United States
military are crucial to our influence. We are an Asia-Pacific nation,
but we have no Asian territory. We must be out there actively working
with our allies and friends to reassure the region and promote peaceful
change. In the future, I would like to see our forces be more balanced
throughout the Asia-Pacific, in multiple locations, away from densely
populated areas, and near adequate training facilities. I'd also like
to see them postured to be more expeditionary, because of the vast
distances. Even operating from our Asian bases, we could be thousands
of miles from where we're needed.
Question. With the perception of the threat shifting from the
Korean peninsula to the Taiwan Strait, do you envision that will impact
force levels within the theater?
Answer. The perception of the threat shifting from the Korean
Peninsula is just that--a perception. Although we are encouraged by the
political changes on the Korean peninsula, as General Schwartz stated
in his testimony, we have seen no reduction in the military threat from
North Korea. If anything, the North Korean military is receiving an
even greater share of the Democratic People's Republic of Korea's
limited resources. Any changes in our posture there must be measured
and only taken if the threat is lessened. These changes would need to
be of a scope and pace designed to maintain deterrence. Moreover,
countries in the region want us to stay in Korea, even after any
reconciliation, and I believe this is in our best national interest.
Question. Have rapid advances in military technology and
capabilities changed the way we think about force structure and how we
project power throughout the theater?
Answer. Advances in communications technology are revolutionizing
our command and control concepts. Precision guided weapons have
increased our lethality while increasing stand-off distances as threat
environments become denser. Unmanned Airborne Vehicles (UAVs), stealth
and supercruise will bring needed enhancements to combat capability.
However, the physical characteristics of my theater, not technology,
most influence what we are able to do here. Our access to the region is
fairly good, but it's limited by the long distances and large areas
covered by water. After 50 years of jets, transports still fly at about
600 miles per hour, and the Strait of Malacca is still about 3 weeks
steaming time from San Diego. Logistics, not technology, tend to drive
the operational tempo, and dictate that we conduct most operations from
forward bases. Together with our components, we are working on
initiatives to leverage technology to reduce forces forward in a
conflict. This will eliminate costly delays in deployment time (build
up/tear down) as well as increased force protection capabilities.
Pacific Air Force's program to upgrade its technology to create its
main Combined Air Operations Center back in Hawaii rather than forward
deployed is one such example. Yet there are significant startup costs
for these investments.
Ballistic and cruise missile inventories of regional powers are
steadily increasing and posing challenges. To protect our access to
bases and ports, we must develop and field effective tactical and
theater defenses against cruise and ballistic missiles as soon as
possible. Finally, we must remember we are confronted by a thinking and
changing enemy who will adapt to and counter any new technology we
field. Therefore it is imperative that we likewise train our people and
procure systems that can more rapidly and effectively counter this
resourceful entity.

MILITARY ENGAGEMENT WITH CHINA

Question. With respect to United States-China military-to-military
exchange program, is the Chinese government allowing the United States
access to visit the same kind of facilities in China as we show the
Chinese in the United states?
Answer. In the last two years, I think the Chinese have allowed us
access to visit roughly the same kinds of facilities as we show them in
the United States, essentially, headquarters buildings, educational
facilities such as the Asia-Pacific Center for Security Studies (APCSS)
and the Center of Excellence (COE), and organizations and training
facilities dedicated to Search and Rescue, Humanitarian Assistance and
Disaster Relief and Peacekeeping Operations. Access could be better,
and the People's Liberation Army (PLA) is inclined to take our
delegations to sites that have been visited by earlier U.S.
delegations. However, the PLA's organization and capabilities are
overall at a lower level than ours are. It is important to note that
our military-to-military exchanges were stopped from May until December
1999, as a result of the accidental bombing of the Chinese embassy in
Belgrade. Also, when the military-to-military exchange program was
restarted in 2000, we implemented significant new restrictions that
were stipulated in the National Defense Authorization Act. Neither we
nor China allow the other access to visit what are considered sensitive
military capabilities or facilities. The bottom line is, exchanges are
limited and roughly reciprocal.
The recent EP-3 accident and aftermath have caused the Secretary of
Defense to undertake a comprehensive review of our military to military
activities with China. USPACOM is an active participant in this review.

EAST TIMOR

Question. What kinds of support and personnel is PACOM currently
providing the United Nations' operations in East Timor?
Answer. There are no United States Pacific Command (USPACOM)
military personnel assigned to the United Nations Peacekeeping Force
(UNPKF) in East Timor or to the United Nations Transitional Authority
East Timor (UNTAET).
The United States Support Group East Timor (USGET) has twelve core
staff members who coordinate USPACOM rotational presence operations in
East Timor. Our activities in East Timor include monthly ship visits,
medical and dental civic action projects and engineering support
through December 2001 and will include a maximum of forty-five
personnel deployed to East Timor during peak periods. In addition,
twice a year an amphibious ready group, including its reinforced medium
lift helicopter squadron and navy landing craft, will conduct community
relations, and humanitarian and civic assistance projects in support of
the people of East Timor's transition to independence.
As Commander-in-Chief, United States Pacific Command (USCINCPAC), I
do not provide capabilities to the peacekeeping force other than staff
advice and technical assistance on a case by case basis within the
capabilities of the personnel assigned to USGET. For example, the USGET
civil military affairs officer acts as the USGET liaison with the UNPKF
headquarters. He keeps the UNPKF informed of day-to-day USGET
activities, and provides situational awareness to the Commander, USGET
(COMUSGET). Additionally, the civil military affairs officer
coordinates United States rotational presence activities with UNTAET
and with non-government organizations and private organizations
operating in East Timor. This coordination maintains a professional
relationship between UNTAET and USGET, but not a supporting or command
relationship.
Likewise, the USGET engineer planner periodically provides subject
matter expertise and technical assistance to UNTAET engineers and
coordinates USGET engineering projects with the East Timor Transitional
Authority. This deconflicts community relations and humanitarian
activities between United Nations sponsored nation building projects
and USGET community relations and humanitarian assistance projects in
East Timor.
Force protection is an area of concern for all personnel in East
Timor. The collocation of the USGET intelligence officer with the UNPKF
allows for the USGET intelligence officer to gain a greater
understanding of security issues both within Dili and throughout East
Timor. USGET does not provide any intelligence products to the United
Nations (U.N.); however, the USGET intelligence officer integrates with
the UNPKF staff where possible to allow for better coordination between
the UNPKF and USGET on Force Protection matters.
Technical advice and staff assistance is provided only within the
current capabilities of the USGET staff, and does not require
additional staff or other resources. This support is consistent with
the terms set out in the President's February 2000 congressional
notification regarding U.S. military activities in East Timor, as
required by the U.N. Participation Act, and the recent Helms-Biden
amendments to that Act.
Question. I understand that PACOM is funding operations in East
Timor as an exercise rather than as a contingency operation, making it
ineligible for DOD contingency funding. How has your command absorbed
these costs, and what programs have been reduced to fund these costs?
Answer. The Office of the Secretary of Defense classifies current
deployments to East Timor as training, and requires funding to be
provided by the Service component commands. As such, operations in East
Timor are not eligible for reimbursement from the Overseas Operations
Contingency Transfer Fund (OCOTF). The four component commands in the
United States Pacific Command are each absorbing East Timor costs with
different programs. The programs affected include flying hour, ship
operations, combat support forces, operating forces' equipment,
engagement, and sustainment, restoration and modernization. The total
costs for the fiscal year 2001 program are estimated at $7.6 million.
While small in comparison to other operations worldwide, the
unbudgeted, un-reimbursed costs can eat up significant operational
funding for our components. Marine Forces Pacific bore a significant
portion of the East Timor costs and has a relatively small budget. Any
unprogrammed requirements directly impact other areas.
Question. As East Timor prepares for independence in late 2001,
what is the current and long-term threat to East Timor's security?
Answer. Three issues threaten the current security situation in
East Timor: rising street crime, the external pro-integrationist
militia threat, and emerging politically motivated violence. Two issues
potentially threaten East Timor's long-term security situation. First,
the present militia threat, based on a refugee population in West
Timor, could form the nucleus of a long-term insurgency to destabilize
an independent East Timor. The second long-term threat is a potential
deterioration of East Timor's strategic relationship with Indonesia,
although bilateral relations are presently very good.

NORTH KOREA

Question. Describe the North Korean military situation and overall
readiness?
Answer. North Korea possesses the fifth largest military is the
world, composed of approximately 1.6 million personnel [deleted]. Their
most formidable conventional component is ground forces, composed of 15
Corps equipped with a wide variety of weapons systems [deleted]. They
also maintain the world's largest number of special operations forces
[deleted]. However, the ground forces are beset with problems and
overall military capability is declining. The functional collapse of
North Korea's economy has resulted in increasing military shortfalls,
to include obsolete military equipment, inadequate training, and the
effects of widespread chronic malnutrition on its soldiers.
To mitigate the declining ground forces capability, [deleted].
North Korea's primary counterbalance to declining military
capability is the threat posed by deployed SCUD and NO DONG missile
units. [Deleted].
Problems of obsolescence also effect the North Korean Air Force and
Navy. However, the Air Force retains a large aircraft inventory,
[deleted], many of which train for limited ground controlled air
intercept and ground attack. While North Korea Naval capability is
limited to littoral waters, every vessel in North Korea is capable of
mine-laying, and if such mines were set adrift, it would pose a
substantial threat to international shipping in the area. [Deleted].

KOREAN PENINSULA

Question. With the ongoing dialogue between North and South Korea
and their economic cooperation initiatives, what are the prospects for
near-term conventional force reduction negotiations on the peninsula?
Answer. The prospects for near-term conventional force reduction
negotiations do not look good. Military measures are making virtually
no progress in the ongoing North-South dialogue. The Defense Ministers
only met once and at this meeting North Korea refused to discuss any
matters other than the transportation corridor through the
Demilitarized Zone (DMZ). The North Korean side rebuffed all attempts
by the Republic of Korea (ROK) Defense Minister to raise confidence-
building measures at the meeting. The North canceled the scheduled
second meeting. While the ROK continues to make considerable progress
in demining south of the DMZ along the path of the Seoul-Sinuiju
railway, North Korea has done little on its side of the DMZ. North
Korea has not yet signed the bilateral agreement that will govern
security inside the DMZ transportation corridor either. In general, the
North Korean actions to date focus on their demands for maximum
economic benefit, especially the provision of electrical power, but
offer little in return in the way of military confidence building
measures or creating an environment conducive to foreign investment.

EXERCISE NORTHERN EDGE

Question. It is my understanding that the exercise funding for
NORTHERN EDGE was just released by the Pentagon--ten days after the
exercise started. How can we avoid this from happening in the future?
Answer. In past exercises, the funding for joint exercise NORTHERN
EDGE (NE) was passed by the Joint Staff directly to the Commander,
Alaska Command (COMALCOM). COMALCOM in turn passed the funding directly
to the units participating in the exercise. For NE01 the funding flow
changed by Congressional direction. The conference report for the
Fiscal Year 2001 Defense Appropriations Act directed ``the Secretary of
Defense to transfer funds from the Chairman, Joint Chiefs of Staff
exercise fund to the service operation and maintenance accounts to
cover the incremental cost of this exercise.'' This direction
necessitated a reprogramming of Department of Defense appropriations
and created several more organizational layers between the source of
funds (the Joint Staff) and participating units in the field. Once the
reprogramming was accomplished (in the middle of the transition between
administrations), funds had to be passed from the Joint Staff to the
Services, from the Services to major commands, from major commands to
local/regional commands, and finally to the participating units. To
mitigate the impact upon NE01 participating units, all Services
``fronted'' the funding for exercise participants in anticipation of
reimbursement (received ten days after the exercise started). We do not
anticipate any similar problems in the future. United States Pacific
Command and the Joint Staff have worked closely with the Office of the
Secretary of Defense to properly align the required funding for future
exercises.
Question. Is funding for NORTHERN EDGE included in DOD's long range
funding plan?
Answer. We do not yet have details of the fiscal year 2002 defense
budget request or the associated Five-Year Defense Plan. The President
will provide those details after Secretary of Defense Rumsfeld
completes his ongoing strategy review.
______

Questions Submitted by Senator Daniel K. Inouye

INTELLIGENCE ASSETS IN THE PACIFIC

Question. Admiral Blair, could you comment on the requirements
versus available ISR assets under your command?
Answer. The numbers of airborne reconnaissance assets assigned to
United States Pacific Command [deleted]. We continue to advocate
requirements for additional aircraft with the Joint Staff and Services.
Our airborne collection requirements continue to [deleted]. At a
minimum, as Commander-in-Chief, United States Pacific Command, I
require an [deleted].
Question. Admiral Blair, what is your view of Global Hawk and would
that have a positive impact if it were deployed in your AOR?
Answer. We are very excited about the potential Global Hawk
presents to the United States Pacific Command (USPACOM) Area of
Responsibility (AOR). With its long range and duration, Global Hawk can
help us conquer the ``tyranny of distance'' in the Department of
Defense's largest geographic AOR. Though its initial operating
capability (IOC) is still 3 or more years off, we at USPACOM intend to
take the lead in both deployment and employment of Global Hawk,
enhancing our indications and warning (I&W) capabilities both on the
Korean Peninsula and in other key areas of interest in the Pacific.
Global Hawk's potential to surveil the broad ocean area is already
gaining the interest of key regional allies, such as Australia, to whom
Global Hawk is being demonstrated during Exercise TANDEM THRUST 01.
Global Hawk will have a positive impact by helping address our
shortage of intelligence, surveillance and reconnaissance assets, a key
challenge for USPACOM. However, it is critical to note that Global
Hawk's current and near-term programmed capabilities will make it a
good complement to the U-2 aircraft we currently employ; Global Hawk
will not be able to replace the U-2 until possibly late in the decade
(depending on payload development decisions).

SUBCOMMITTEE RECESS

Senator Stevens. If there is nothing further, the
subcommittee will stand in recess.
[Whereupon, at 11:35 a.m., Wednesday, March 28, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, APRIL 25, 2001

DEPARTMENT OF DEFENSE

Chemical Demilitarization Program

STATEMENT OF HON. JOSEPH WESTPHAL, ACTING SECRETARY OF
THE ARMY
ACCOMPANIED BY:
JAMES L. BACON, PROGRAM MANAGER FOR CHEMICAL DEMILITARIZATION
PROGRAM
MICHAEL PARKER, PROGRAM MANAGER FOR ASSEMBLED CHEMICAL WEAPONS

OPENING STATEMENT OF Senator TED STEVENS

Senator Stevens. Good morning. Today's hearing concerns the
Department of Defense's (DOD) chemical demilitarization
program. It consists of two panels. The first panel will
discuss the overall program and consists of Acting Secretary of
the Army Joe Westphal and program managers Jim Bacon and Mike
Parker. The second panel will focus on the concerns of some of
the communities located next to chemical weapons storage
disposal sites.
Let me first welcome you, Mr. Secretary, and thank you for
your role as Acting Secretary of the Army. We are delighted to
have you with us and know of your work in the past. I can
testify that you are a good fisherman.
Dr. Westphal. Thank you, Mr. Chairman.
Senator Stevens. I look forward to spending time with you
again.
The disposal of chemical weapons poses one of the more
difficult challenges to our Nation and the Department of
Defense in selecting the best technology for Kentucky and
Colorado, controlling costs and assuring safety in terms of all
actions of the Department.
I want to recognize my colleagues here. Senator Shelby, do
you have a comment?

STATEMENT OF Senator RICHARD C. SHELBY

Senator Shelby. I have a brief opening statement, if you
will permit me, Mr. Chairman.
Senator Stevens. Please.
Senator Shelby. Mr. Chairman, first of all let me thank you
and also Senator Inouye for agreeing to hold this hearing so
that we may take a closer look at the chemical demilitarization
program and the assembled chemical weapons assessment programs.
For those of us in the Senate who have stockpiled chemical
weapons in our State, I believe this is a very difficult and at
times a divisive issue. Different States have different issues
and concerns. I compliment the chairman and the ranking member
for their patience and understanding during the preparation of
this hearing. I would also like to recognize Mr. Tom Hawkins of
the subcommittee staff for his diligence and responsiveness
during the planning of this hearing.

WELCOMING OF PANELISTS

I would like to welcome all the panelists here today and
look forward to their testimony regarding the two programs. I
would especially like to welcome Ms. Lindell, Mr. Kenney, and
Mr. Henderson, who are from Anniston, Alabama, my home State.
Thank you for your concern for your community and thank you for
being here today.
Mr. Chairman, the destruction of stockpiled chemical
munitions has been successfully completed on Johnston Atoll and
operations continue in Utah. Incineration is scheduled to
commence next year in Anniston, Alabama, and also in Oregon.
However, the fact that the incinerator will go on line next
spring has heightened, I believe, a sense of fear in a lot of
people in the Anniston, Alabama, community.
Today I would like to ask the Army and the Federal
Emergency Management Agency (FEMA) why such a state of fear
exists in Anniston. I am hopeful that they will have
explanations and solutions. I would also like to give some of
my constituents that I mentioned an opportunity to voice their
concerns here today. We must remember that they are the
ultimate stakeholders in this matter. They live in these
communities and I think most of us are aware of that.
Mr. Chairman, thank you for holding this hearing.
Senator Stevens. Thank you.
Senator McConnell.

STATEMENT OF Senator MITCH Mc CONNELL

Senator McConnell. Thank you, Chairman Stevens.
You know, if General Washington had run the continental
army the way our chemical weapons destruction efforts have been
managed, it is an absolute certainty that we would still be
sipping tea and dining on crumpets. I am not exaggerating when
I say that in all my years as a Senator I have never seen a
Federal program that has been more poorly managed than this
one.
What exacerbates the problem is the reality that poor
oversight can lead to much more than increased cost and
schedule delays. It can lead to disastrous accidents that
seriously threaten men, women and children in communities
around the country.
Quite frankly, with the exception of the loyal support from
the chairman of this subcommittee, there are very few members
of Congress who are interested in wrestling with this issue. I
can well understand why. Destroying our Nation's chemical
weapons consistent with our commitments under the Chemical
Weapons Convention may be important, but it is not what I would
call a glamorous undertaking.
That said, the evidence is undeniable. This is a program in
desperate need of new management. I am proud to have been
involved in forcing--and I use that word intentionally,
forcing--the Army to conduct an evaluation of alternatives to
incineration as a means to destroy these weapons. Despite the
General Accounting Office's (GAO's) 1992 recommendation that
the Army determine whether faster and less costly technologies
exist for destroying the stockpile, my effort was met with
strident, strident opposition by everyone within Program
Manager for Chemical Demilitarization (PMCD).
Despite this fact, I am pleased that under the leadership
of Mike Parker and his team today a total of four alternatives
have been successfully demonstrated and it is entirely likely
that one of these could be deployed in Kentucky in the near
future. In addition, this effort relied on considerable input
from the public and other non-DOD sources. I think all who
participated would agree that this aspect was the most
successful part of the program, as people from all sides of the
debate became invested in a positive outcome.
Unfortunately, the larger destruction program continues
under a shroud of deception, producing embarrassing results. I
submit that the time to institute reform is now. Secretary
Rumsfeld should include in his comprehensive review an honest
evaluation of the chemical weapons program. If this occurs,
there is no question in my mind that the need for improved
management and accountability will become crystal clear.

DEMILITARIZATION COSTS

One need only look at the mountain of Army, DOD, and
private reports which have been issued on the chemical weapons
demilitarization program over the last decade to see that the
need for reform is real. In 1985, the year I came to the
Senate, the initial estimate for the cost of destroying
America's stockpile was $1.7 billion. The latest publicly
stated cost projection is $14.1 billion. That is a staggering
increase of 829 percent.
What have we gained with the extra cost? According to a
1998 independent review, ``Even inside the DOD and the Army,
the program lacks credibility.'' No one appears to want to take
charge because it is seen as a disaster with no solution, and
even Dr. Jacques Gansler the recently departed Under Secretary
of Defense for Acquisition and Technology, stated that the
program ``requires a number of management improvements and
needs to improve stakeholder involvement and program
transparency through the use of the Assembled Chemical Weapons
Assessment (ACWA)-type public outreach as a model across the
chemical weapons program.''
To that, Mr. Chairman, I can only add, amen. The issue of
accountability must be dealt with and I intend to pursue
solutions with the Department. But until DOD decides to take
ownership of this program, we will be here every year lamenting
the ever-spiraling budget and more missed deadlines. We owe it
to our constituents in Alabama and Kentucky and other places
whose homes, workplaces, and schools border these destruction
facilities to stop this embarrassing trend in its tracks.
Thank you very much, Mr. Chairman, for holding this
important hearing.
Senator Stevens. Thank you.
Mr. Secretary, the news accurately reports a comment I made
at the White House yesterday about needing more money in this
year's budget for this committee. One of the reasons I pointed
that out to them was we have a series of programs that have
escalating costs and yet we have some fixed costs for
acquisition. We must cut one or the other. We must either
postpone airplanes or acquisition of new ships or acquisition
of tanks, or we must find some way to get these programs like
this one back under control.
I do not see how we can do it in 1 year. I really think we
have an absolute crunch in terms of the defense appropriations
bill this year.
Senator Inouye, I have proceeded in your absence. I
apologize.

STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. That is all right. I am late.
Senator Stevens. Do you want an opening statement? Are you
sure? We have got plenty of time.
Senator Inouye. Make it part of the record.
Senator Stevens. Well, let us hear it.
Senator Inouye. You want to hear about it?
Senator Stevens. Yes.
Did you not come to hear his statement? I did.
Senator Inouye. Well, Mr. Secretary, good morning, sir.
Dr. Westphal. Good morning, sir.
Senator Inouye. We appreciate that you and your colleagues
are here to give us some wisdom. We need that here. I know that
the committee also will hear from a second panel, including Mr.
Salter from the FEMA, and several representatives from local
citizens groups, and to them I also extend my greetings and
welcome. I join my chairman in doing that.
Today the committee will review DOD's chemical
demilitarization program. It is certainly true that issues of
great national and international importance too often have
unavoidable and sometimes dire consequences for local
communities. This of course is the case in war as well as in
actions such as trade embargoes, for example. Disposing of our
chemical weapons is no less an issue of great national and
international importance, but one with clear local
consequences.

CHEMICAL WEAPONS CONVENTION COMMITMENT

The United States is bound by the Chemical Weapons
Convention, ratified by the Senate, to eliminate these horrific
tools of war by the year 2007. Yet, of equal consequence to
this committee is ensuring that DOD's chemical demilitarization
program meets its commitment to safely and quickly dispose of
these weapons.
As all of us in this room understand, protecting the public
health is job number one for this program, and that is why the
Congress has required the Department to seek the safest and the
most effective technologies for eliminating our chemical
weapons. I know that this is a risky and costly task, but I am
certain you will agree that must be done.
Mr. Secretary, your challenge today is clear, to present to
the committee a statement about the risks and the successes of
DOD's chemical demilitarization program and to give us a view
of the path ahead, one that will ensure the safety of our
communities and meet our commitments to our Nation. We welcome
your testimony, sir. As you know, although we do not have a
chemical facility in our back yard, there is a little island
down the way that we are concerned about in Hawaii.
Senator Stevens. Thank you very much, Senator.
Mr. Secretary and for all witnesses, we will print your
statements that you presented to the committee in the record in
full. We would like to have your comments for the committee
now.

OPENING STATEMENT BY ACTING SECRETARY WESTPHAL

Dr. Westphal. Thank you, Mr. Chairman and ranking Senator
Inouye, Senator Shelby, Senator McConnell. I am delighted to be
here. I am particularly delighted to have the opportunity to
get more immersed into this program. As you know, I am fairly
new to this job. I do pledge to all of you that I will take the
time to educate myself and to understand better the issues you
have raised today. We will have people in the audience here
that will also be checking in on the comments of the second
panel to ensure that we were well coordinated on that.
Mr. Chairman, I brought Jim Bacon, who is our program
manager for the chemical demilitarization program, and Michael
Parker, who is our program manager for the Assembled Chemical
Weapons Assessment (ACWA) Program. They are the experts. We are
going to be addressing some fairly technical or highly
technical and complex issues today, so I hope you will indulge
me. I will probably ask them to address many of the technical
questions you may raise during the questions and answers.
As you know, the Department of Defense in 1985 took over
this program when you mandated the Department to carry out the
destruction of the U.S. stockpile of chemical agents and
munitions. Through that you also required the Department of the
Army to be the essentially executive agent or to manage the
disposal program.
The program is composed essentially of four projects: the
Chemical Stockpile Disposal Project. In 1985, we were required
to destroy the stockpile of unitary chemical weapons at nine
sites, including Johnston Island.
The second project is the Chemical Stockpile Emergency
Preparedness Project (CSEPP), which was established in 1988, to
help communities in ten states to enhance existing emergency
management and response capabilities.
The Non-Stockpile Chemical Materiel Product was established
in 1993 to identify, locate, and destroy binary chemical
weapons warfare materiel, former production facilities, and
recovered chemical warfare materiel.
Then the fourth project, the Alternative Technologies and
Approaches Project, was established in 1994 to develop and
support testing of two technologies for neutralizing chemical
agents at two sites that store only large containers holding
one type of agent.
Also, in 1997 the Assembled Chemical Weapons Assessment
Program was established. This program was designed to test
technologies other than incineration for destroying assembled
chemical weapons. Established by Congress in 1997 to test these
technologies, this program is, as I mentioned earlier, managed
by Mike Parker here.

MAJOR ACCOMPLISHMENTS

Now, if I may, I would like to just briefly address some of
the major accomplishments and activities in those particular
projects. The United States originally maintained about 31,496
tons of chemical agent at these nine storage sites. To date we
have destroyed over 22 percent of the original tonnage, while
90 percent of the total original stockpile is under contract
for destruction.
By April of 2000, April 29 of this year, we were required
to have destroyed 1 percent--excuse me, last year--1 percent of
the chemical weapons that were declared at the time of the
treaty's entry into force. By that time we had well exceeded
that milestone, having destroyed over 15 percent of those
weapons. We will pass the next significant treaty milestone
ahead of schedule, which will require that we have 20 percent
of category one chemical weapons destroyed by April 29th of
2002.
The greatest accomplishment of the program by far is the
reduction of risk to the public, the workforce, and the
environment by destroying chemical agents. It continues to be a
reality that the ongoing storage of chemical weapons remains
the greatest risk to local communities residing near
stockpiles. Every day we operate a disposal facility, we are
safely, effectively, and significantly reducing the risk.
Our priorities for fiscal years 2001 and 2002 include
maintaining the momentum we have achieved and continuing to
make progress at each of the chemical stockpile sites under
construction or in operation. Of critical importance are the
selection of disposal technologies at Pueblo and Blue Grass
locations and the acquiring of funding necessary to begin
demilitarization activities at those sites.
We are supporting a Defense Acquisition Executive review of
several aspects of the Chemical Demilitarization Program,
including our compliance with the Chemical Weapons Convention,
life cycle costs and schedule estimates, program plans for the
closure of chemical agent disposal facilities, and the path
forward to implement disposal technologies at Pueblo and Blue
Grass. The review is scheduled to be completed during the first
quarter of fiscal year 2002.
In addition to the Defense Acquisition Executive review, we
are supporting the completion of the Congressionally directed
studies of the Chemical Demilitarization Program, including an
assessment of the feasibility and advisability of using
stockpile facilities for disposal of non-stockpile material.
Each of these assessments has the potential to drastically
change the scope of the program and the funding requirements
necessary to execute the chemical demilitarization mission.
Now, as stated earlier, maintaining momentum in our program
is vital to the safety of our communities and to meeting our
international treaty obligations. We have made tremendous
progress in the safe destruction of chemical agents and
munitions in an environmentally sound manner while continuing
to address the challenges that such endeavors bring.
So, given those broad statements of what we perceive to be
a program that has our utmost concerns for safety, health, and
environmental protection, I am personally anxious to understand
also what the Congress's concern and what your communities'
concerns are regarding the management of that program and what
we need to do to improve and to assure you and your
constituents that safety and environmental protection are of
utmost significance.
Senator Inouye, you mentioned Johnston Island. As you know,
the Johnston Atoll Chemical Agent Disposal System was
constructed back in 1985. We have destroyed 2,031 tons of
chemical agents and in November of 2000 we successfully and
safely destroyed the last chemical munitions in the Johnston
Island stockpile, a major milestone in the history of chemical
demilitarization.
Closure activities have begun at Johnston Atoll and are
planned to be completed by the fourth quarter of fiscal year
2003. Closure is a first-time activity for the program and may
result, I think, in a lot of new requirements. But the lessons
we have learned at Johnston Island, both through the operation
and the closure will be invaluable to the transfer of those
ideas and methods to the continental United States disposal
sites.
Mr. Chairman, I could go on with the statement. You have
most of it. I would rather save the committee's time and not go
through most of this information, which you have, and allow the
members to ask the questions. I can tell you that I have spoken
with the Secretary and with the current folks that are in the
Under Secretary of Defense's position. The Senate will be
looking at confirmation of a new Under Secretary of Defense for
Acquisition, Technology and Logistics in the next few days.
Pending that nomination, I intend to work with whoever the
Senate confirms to that position and make sure that we address
your questions and your issues adequately.

PREPARED STATEMENT

But I will end there. I would rather not take your time
with repeating what is in the statement.
[The statement follows:]

Prepared Statement of Dr. Joseph Westphal

Mr. Chairman and Members of the Committee: It is an honor and a
pleasure to testify before you here today on the state of our Chemical
Demilitarization Program. Our panel is comprised of Mr. James Bacon,
the Program Manager for Chemical Demilitarization, and Mr. Michael
Parker, the Program Manager for Assembled Chemical Weapons Assessment,
and myself. We will tell you where the program is today, and where we
will be going in the future.
I would like to begin by highlighting some of the successes that we
have made to date. The Chemical Demilitarization Program, as you know,
is a top priority, not only for our nation and its military, but for
the global community of which the United States is a part. The
principal functions that this program was founded to perform have the
historic end goal of not only reducing, but eliminating the United
States' chemical weapons inventory consistent with an international
treaty obligation--the Chemical Weapons Convention. Of course, that is
no small task. However, we believe that this is an important,
beneficial and absolutely necessary program which will help destroy
weapons of mass destruction as well as helping to ensure a clean and
safe environment for Americans and their allies.
One of our proudest recent milestones is the completion of our
mission at the Johnston Atoll Chemical Agent Disposal System (JACADS).
The JACADS site has been disposing of stockpiled chemical weapons
safely for over a decade, and on November 29, 2000, the facility
completed its final mission, the elimination of its stockpile of VX
nerve agent. The JACADS mission has, to date, accomplished the
destruction of 2,031 tons of agents. That's more than six percent of
the entire United States chemical stockpile and includes the chemical
munitions relocated from Germany to Johnston Atoll in 1990. For the
first time in the history of the Chemical Demilitarization Program, an
entire U.S. chemical stockpile storage location will be free of
chemical weapons. Since the disposal operations at Johnston Atoll are
complete, closure activities for that facility are currently underway
that we expect to complete in September 2003.
The closure of our first full-scale prototype facility at Johnston
Atoll marks a profound turning point in our program. At the same time,
I am pleased to report to you that construction of new facilities at
Anniston, Alabama, and Umatilla, Oregon, is nearly complete. Work on
the facilities is continuing steadily, and we do not anticipate any
significant delays or problems. We are on schedule to begin operations
at these sites during fiscal year 2002. We are also making progress in
our work on our facilities at Pine Bluff, Arkansas, Aberdeen Proving
Ground, Maryland, and Newport, Indiana. In addition, we have begun the
National Environmental Policy Act (NEPA) documentation process to
support technology decisions for the Pueblo, Colorado, and Blue Grass,
Kentucky, sites. These decisions will be made by the Defense
Acquisition Executive in the first quarter of fiscal year 2002 for
Pueblo and the third quarter of fiscal year of 2002 for Blue Grass. Our
new facilities will continue the process of Chemical Demilitarization
in the new millennium with the same concern for safety and
environmental preservation that made our mission at Johnston Atoll so
successful.
Further, safe and effective destruction operations continue at our
Tooele, Utah, facility--our largest stockpile site. Since August 1996,
over 10 million pounds of agent have been destroyed at the Tooele
facility, and these operations are scheduled to be completed in 2004.
We look forward to answering any questions that you may have about
this vital program.

DESCRIPTION OF THE CHEMICAL DEMILITARIZATION PROGRAM

Public Law 99-145, as amended, designated the Army as the
Department of Defense's Executive Agent in charge of destroying our
nation's chemical weapons. As such, the Army's Program Manager for
Chemical Demilitarization (PMCD) is the primary entity with the
obligation of designing and operating state-of-the-art chemical weapons
disposal facilities that will allow our nation to meet international
treaty obligations by April 2007. Along with reducing the risk of
proliferation of weapons of mass destruction, the Army continually
seeks ways to reduce the risk to military and civilian families living
near the storage sites by ensuring these aging weapons are safely
destroyed in an environmentally sound manner as efficiently as
possible. This is a top priority. The Army also is spending
approximately $120 million per year to safeguard the storage of
chemical weapons.
As Program Manager, Mr. Bacon is directly responsible for the
Chemical Stockpile Disposal Project, the Alternative Technologies and
Approaches Project, and the Non-Stockpile Chemical Materiel Product.
The United States' stockpile of chemical agents and munitions is stored
at eight sites within the continental United States. To date, we have
safely destroyed a combined total of over 7,000 tons of chemical agent
at the Johnston Island and Tooele facilities.
The Alternative Technologies and Approaches Project is an
aggressive research, development, test and evaluation program that
began in 1994 to pilot test chemically neutralizing the bulk mustard
agent, stored at Aberdeen Proving Ground and the bulk nerve agent VX
stored at Newport Chemical Depot. This program is focused on these two
sites because each site has only one type of chemical agent stored in
large steel containers (hence the term ``bulk''), and because there are
no assembled chemical weapons in these stockpiles.
The Non-Stockpile program's mission is to safely dispose of all
former chemical warfare production facilities and recovered and
miscellaneous chemical warfare materiel that is not part of the
stockpile.

TECHNOLOGY APPROACH

Baseline incineration is the only tried and successfully proven
chemical weapons disposal technology to date, and the PMCD has employed
that technology at two operational sites and is constructing additional
facilities at three other locations. At our Johnston Island facility,
the incineration technology successfully and safely destroyed over
2,000 tons of chemical agent, including over 400,000 munitions and bulk
agent containers, while meeting stringent Resource Conservation and
Recovery Act requirements and permitting conditions. Johnston Island is
the first facility to complete its mission, destroying its entire
stockpile of agent. To date, our facility in Tooele has destroyed
approximately 5,000 tons of chemical agent, including 795,285 munitions
and bulk agent containers.
Alternative, non-incineration technologies are actively being
researched and developed for pilot testing at Aberdeen Proving Ground
and Newport to support the disposal of the bulk only stockpiles. Under
a separate Department of Defense program, the Assembled Chemical
Weapons Assessment (ACWA) program, additional alternative technologies
are also being examined for potential pilot testing. Mr. Parker, the
ACWA Program Manager, will provide you with information regarding this
program and testify here as well.

ACCOMPLISHMENTS AND PRIORITIES

The United States originally maintained 31,496 tons of chemical
agent at nine storage sites. To date, we have destroyed over 22 percent
of the original tonnage while 90 percent of the total original
stockpile is under contract for destruction. The program continues to
meet or exceed requirements of the Chemical Weapons Convention (CWC).
By April 29, 2000, we were required to have destroyed one percent of
our Category 1 chemical weapons that were declared at the time of the
treaty's entry into force. By that time, we had well exceeded that
milestone, having destroyed over 15 percent of those weapons. We will
pass the next significant CWC milestone ahead of schedule, which
requires that we have 20 percent of Category 1 chemical weapons
destroyed by April 29, 2002.
The greatest accomplishment of the program, by far, is the
reduction of risk to the public, the workforce, and the environment by
destroying the chemical agents. It continues to be a reality that the
ongoing storage of chemical weapons remains the greatest risk to local
communities residing near stockpiles. Every day we operate a disposal
facility we are safely, effectively, and significantly reducing this
risk.
Our priorities for fiscal years 2001 and 2002 include maintaining
the momentum we have achieved and continuing to make progress at each
of the chemical stockpile sites under construction or in operation. Of
critical importance are the selection of disposal technologies for the
Pueblo and Blue Grass locations and the acquiring of funding necessary
to begin demilitarization activities at those sites.
We are supporting a Defense Acquisition Executive review of several
aspects of the Chemical Demilitarization Program, including our
compliance with the CWC; life cycle cost and schedule estimates;
program plans for the closure of chemical agent disposal facilities;
and the path forward to implement disposal technologies at Pueblo and
Blue Grass. The review is scheduled to be completed during the first
quarter of fiscal year 2002. In addition to the Defense Acquisition
Executive review, we are also supporting the completion of
Congressionally directed studies of the Chemical Demilitarization
Program, including an assessment of the feasibility and advisability of
using stockpile facilities for disposal of non-stockpile materiel. Each
of these assessments has the potential to drastically change the scope
of the program and the funding requirements necessary to execute the
chemical demilitarization mission.

PROGRAM STATUS

As stated above, maintaining momentum in our program is vital to
the safety of our communities and to meeting our international treaty
obligations. We have made tremendous progress in the safe destruction
of chemical agents and munitions in an environmentally sound manner
while continually addressing the challenges that such an endeavor
brings. Our results are significant, and so are our obstacles. The
following is a brief description of the status of our programs as we
follow the critical path necessary to make our communities safe and to
meet our international treaty obligations:

Status of the Chemical Stockpile Disposal Project
Johnston Island
Johnston Island, located 825 miles southwest of Hawaii, is the home
of the world's first full-scale facility, operated by the Washington
Demilitarization Company (formerly Raytheon Demilitarization Company),
and designed specifically for the disposal of chemical agents and
weapons. The Johnston Atoll Chemical Agent Disposal System (JACADS) was
constructed by the Pacific Dredging Company in 1985. During its
operational phase JACADS, destroyed 2,031 tons of chemical agents. In
November 2000, JACADS successfully and safely destroyed the last
chemical munition in the Johnston Island stockpile, a major milestone
in the history of chemical demilitarization. Closure activities began
in January 2001 and are planned to be completed by the fourth quarter
of fiscal year 2003. Closure is a first time activity for the program
and may result in new requirements. The lessons we learn at Johnston
Island, both through operations and closure, have been and will
continue to be transferred to our continental United States disposal
sites.

Tooele, Utah
The Deseret Chemical Depot, located 22 miles south of Tooele, Utah,
stores the nation's largest stockpile of chemical weapons (13,616 tons
of chemical agent. EG&G began construction of the Tooele Chemical Agent
Disposal Facility in September 1989 and disposal operations began in
August 1996. To date, Tooele has safely and effectively destroyed
approximately 5,000 tons of the chemical agent GB. To put this
significant achievement into perspective, the amount of agent destroyed
at Tooele is greater than the amount of agent that is stored at any one
of the remaining stockpile sites around the country. Closure operations
at the facility are scheduled to begin in the fourth quarter of fiscal
year 2004. It is important to note that all GB agent munitions will be
destroyed during this calendar year.

Umatilla, Oregon
The Umatilla Chemical Agent Disposal Facility, located at the
Umatilla Chemical Depot, is approximately seven miles west of
Hermiston, Oregon, just south of the Washington/Oregon state line. This
facility will dispose of 3,717 tons of our nation's original stockpile
of chemical agent. Washington Demilitarization Company (formerly
Raytheon Demilitarization Company) began construction of the facility
in June 1997. Construction is 92 percent complete and is expected to be
completed during the third quarter of fiscal year 2001. Disposal
operations are scheduled to begin in the fourth quarter of fiscal year
2002 and be completed in the first quarter of fiscal year 2006.

Anniston, Alabama
The Anniston Army Depot, located 50 miles east of Birmingham,
Alabama, and eight miles west of Anniston, stores 2,254 tons of our
nation's original stockpile of chemical agents. Washington
Demilitarization Company (formerly Westinghouse Company/CBS) began
construction of the Anniston Chemical Agent Disposal Facility in June
1997. Construction is 98 percent complete and will be completed in
third quarter of fiscal year 2001. Disposal operations are scheduled to
begin in the third quarter of fiscal year 2002 and be completed in the
second quarter of fiscal year 2006.

Pine Bluff, Arkansas
The Pine Bluff Chemical Agent Disposal Facility, located at the
Pine Bluff Arsenal, is 35 miles southeast of Little Rock, Arkansas. The
facility will dispose of 3,850 tons of our nation's original stockpile
of chemical agent. Groundbreaking at the facility was held in February
1999, and construction by the Washington Demilitarization Company
(formerly Raytheon Demilitarization Company) is now 45 percent
complete. Disposal operations are scheduled to begin in the fourth
quarter of fiscal year 2003 and end in the first quarter of fiscal year
2007.

Status of the Alternative Technologies and Approaches Project
Newport, Indiana
The Newport Chemical Depot, located two miles south of Newport and
32 miles north of Terre Haute in western Indiana, stores 1,269 tons of
the nerve agent VX in 1,690 steel containers, commonly called ton
containers. Groundbreaking at the Newport Chemical Agent Disposal
Facility was held in April 2000 and Parsons Infrastructure is scheduled
to begin pilot testing in the third quarter of fiscal year 2004 to
pilot test VX neutralization followed by super critical water oxidation
as the disposal technology. Upon verification of this technology being
successful in the pilot stage, full-scale operations should begin in
the first quarter of fiscal year 2005 and be completed in the fourth
quarter of fiscal year 2005.

Aberdeen Proving Ground, Maryland
The Edgewood Chemical Activity of the Aberdeen Proving Ground,
located approximately 20 miles north east of Baltimore stores 1,623
tons of mustard agent, also known as HD, in 1,817 ton containers.
Bechtel National, Incorporated, began construction of the Aberdeen
Chemical Agent Disposal Facility in July 2000. The pilot testing of a
neutralization process followed by biodegradation to destroy the
mustard agent is scheduled to begin in the third quarter of fiscal year
2004. Upon successful completion of the pilot testing to verify that
the neutralization process is capable of full-scale disposal of the
chemical agent, full-scale operations should begin in the second
quarter of fiscal year 2005, and end in the second quarter of fiscal
year 2006.

Status of the Pueblo, Colorado, and Blue Grass, Kentucky, Sites
Pueblo, Colorado
The Pueblo Chemical Depot has 780,078 munitions with about 2,611
tons of chemical agent. Significant demilitarization activities at the
depot had been on-hold pending the results of the congressionally
mandated ACWA program. This assessment required the evaluation of at
least two alternate technologies to incineration for the disposal of
assembled chemical munitions. This assessment is now complete.
Both PMCD and ACWA are supporting the environmental evaluation and
review process. In November 1999, an environmental Working Integrated
Product Team (WIPT) was formed for the Pueblo project to work with the
state of Colorado to expedite planning, development and implementation
of all aspects of the environmental permitting process for a chemical
agent disposal facility in Pueblo. The WIPT continues to meet regularly
with the state. The PMCD and ACWA have also begun the NEPA process to
support a technology decision. Completion of the NEPA process and the
technology decision are scheduled to be made in the first quarter of
fiscal year 2002 with a systems contract award expected in the second
quarter of fiscal year 2002. Infrastructure projects for upgrade of
roads, utilities and communications systems are scheduled for award
this summer.

Blue Grass, Kentucky
The Blue Grass Army Depot, located in central Kentucky, stores 523
tons of our nation's original stockpile of chemical agents. As with
Pueblo, significant demilitarization activities have been on hold
pending the results of the ACWA program.
An Environmental WIPT was formed in January 2001 for the Blue Grass
project. The purpose of the WIPT is to facilitate and expedite the
permitting process for the safe elimination of chemical weapons stored
at Blue Grass Army Depot. As required by NEPA, preparation of an
environmental impact statement (EIS) has begun. Two technologies will
be addressed in the EIS. These technologies are baseline incineration,
and the ACWA technology of neutralization followed by super critical
water oxidation. Additional ACWA technologies will be considered in the
EIS if they are ultimately deemed reasonable alternatives. Completion
of the NEPA process and the technology decision are scheduled to be
made in the third quarter of fiscal year 2002.

Status of the Non-Stockpile Chemical Materiel Destruction
Destruction of the non-stockpile chemical materiel covered by the
CWC must also adhere to the terms of the Convention. The Product
Manager is responsible for the safe disposal of binary chemical
weapons, former chemical weapons production facilities, buried and
recovered chemical warfare materiel, and miscellaneous hardware and
chemical warfare components. The Army continues to research, develop
and deploy several neutralization-based technology mobile treatment
systems for the disposal of non-stockpile materiel, including the
Mobile Munitions Assessment System, the Rapid Response System, and the
Explosive Destruction System.
In December 2000, the program's Explosive Destruction System
arrived at Rocky Mountain Arsenal, Colorado, and safely destroyed
recovered bomblets containing GB. Due to the success of the Explosive
Destruction System, the Program Manager decided to end the development
of the Munitions Management Device-1. Termination of the Munitions
Management Device-1 test will result in fiscal year 2001 cost savings
to the program of approximately $5 million. Funds in this amount are
being transferred to the Alternative Technologies and Approaches
Project to cover emerging program requirements.

SAFETY

Disposing of lethal chemical agent and munitions is one of the most
complex missions undertaken in either the public or private sector.
Multiple configurations of munitions and energetics, along with varying
types of chemical agent demand that we take the utmost safety
precautions in the storage and destruction of these weapons. Throughout
this process, we are totally committed to worker safety, protecting the
health of the citizens in the communities in which we operate, and an
overall respect for the environment. The PMCD actively works with the
EPA, relevant state environmental and health regulatory agencies, as
well as the Centers for Disease Control and Prevention to ensure worker
and community health and safety and full protection of the environment.
As the program continues its mission, a priority is maintaining a
culture of safety and sharing lessons learned from operating facilities
to those facilities about to enter into operation.

MEETING AND EXCEEDING ENVIRONMENTAL AND REGULATORY REQUIREMENTS

Planning, constructing, operating, and ultimately closing disposal
facilities at nine different sites requires that the PMCD meet or
exceed local, state, and national regulatory requirements for
protecting human health and the environment. This requirement is both
costly and time consuming; however, meeting or exceeding standards is
critical for building partnerships in the communities where our
facilities are located. As science and public policy concerns evolve,
we are faced with increasing oversight requirements, which we fully
accept for the protection of the public, our workers, and the
environment. Because we have strong working relationships with state
and local regulatory agencies, we cooperatively ensure that all
obligations are met. For example, Oregon recently reclassified all
munitions in storage as hazardous waste, and such a change will require
the Army to change the way we work with state agencies. This
reclassification will result in increased regulatory compliance costs
for the Army.
On the federal and state levels, the program continues to meet
environmental regulatory and permitting requirements. Also, since the
1960's, the Army has worked with the National Research Council, whose
members are some of our nation's most distinguished scientists and
engineers, to review and ensure our practices and procedures are sound.

MANAGING UNIDENTIFIED FACILITY CLOSURE ISSUES AND ENVIRONMENTAL COSTS

The legacy of chemical weapons production, testing, storage, and
disposal will not be eliminated overnight. As the chemical weapons
disposal process ends at our facilities like JACADS, we are entering
uncharted territory relating to requirements and closure costs. As we
work through the process at JACADS, we will learn a great deal about
ultimate closure costs, schedules and processes that will be shared
with our other facilities.

PARTNERING WITH OUR COMMUNITIES

Public confidence and acceptance of the program is vital to the
successful planning, construction, operation and closure of our
facilities. The PMCD partners with citizens' advisory commissions in
each stockpile state, with the Federal Emergency Management Agency
(FEMA), and state and local emergency response agencies to ensure the
public is adequately informed about the risks associated with the
stockpile and our disposal operations. We take every opportunity to
work with our state and local partners and communities to engage and
inform local citizens by maintaining public outreach offices in all of
the stockpile communities.
The Chemical Stockpile Emergency Preparedness Program protects
public health and safety in ten states from the risks of chemical
stockpile storage and disposal operations. This program ensures that
Army installations and state and local governments are prepared to
respond to an accident involving the chemical stockpile. All eight Army
installations that store chemical agents and munitions are prepared to
respond to such an accident.
The Army shares responsibility for managing this program with FEMA.
FEMA is responsible for assisting state and local governments in
developing their emergency response capabilities. The Army supports
this effort by providing funding and technical assistance. The Chemical
Stockpile Emergency Preparedness Program has enhanced emergency
response capabilities in each of the ten states affected by the
Chemical Demilitarization Program.

MAINTAINING FUNDING NECESSARY TO FULFILL MISSION

The PMCD has achieved a number of milestones and is clearly a world
leader in chemical weapons disposal technology and processes. Meeting
the CWC obligations and building upon our successes is a top priority,
one which will require full financial support. The program has begun
closure activities at the Johnston Island facility and will begin
operations in the near term, at new facilities in Anniston and
Umatilla. In addition, we expect the Department of Defense to
determine, in the near term, the technology path forward for the Pueblo
and Blue Grass sites.

CHALLENGES

The chemical demilitarization mission is a large and complex
undertaking, constantly breaking new ground and meeting new
technological, economic and political challenges. The Army's continuing
destruction of our chemical weapons stockpile already has reduced risks
to the public, the workforce and the environment. Risks from these
lethal weapons will continue to decrease as new destruction operations
(most of which are already under construction) come on line. Despite
these achievements, the Army faces a number of significant challenges
as we move forward with existing and planned operations to meet
requirements of public law and the CWC. It is imperative that we
maintain momentum and the full funding necessary to see the projects
mature through the systemization, operations and closure phases. We
must determine a technology path forward for Pueblo and Blue Grass,
using sound science and frank dialogue, so we can proceed with the
destruction of those stockpiles. Personnel retention issues, including
the maintenance of the right skills mixture for government and
contractor employees, must be successfully addressed for these
relatively short duration projects. We must successfully manage the
degradation of the stockpiles, which is an ongoing issue as the weapons
deteriorate with age, so we can continue to minimize risk to the
workers and the public. Finally, developing and achieving approved
closure standards, working with the various stakeholders at all of our
sites, to include state and local governments, continues to be a key
program objective.

CONCLUSION

For over 20 years, the safety record of the thousands of men and
women involved in the destruction of chemical weapons is remarkable. No
member of the public has ever been exposed to a chemical agent during
operations of our disposal facilities. We are meeting our CWC
obligations while fulfilling our commitment to safety--to our workers,
our communities and our environment. Indeed, we are truly making
chemical weapons history.
As we proceed toward our goal, we are constantly aware of the
public's intense interest in this program and encourage their
participation. We have and will continue to work closely with the
established citizens' advisory commissions and our local communities.
We are committed to forthright, open and responsive communications with
all of our stakeholders. In our endeavors, we will never forget that
safety and protection of the environment are our first priorities. Our
obligation to our workers, our families, the communities and our nation
is too great not to fully commit to safety as the program's paramount
consideration. To accomplish our mutual goal, the focus must now be
placed on staying the course and completing the mission of disposing of
chemical warfare materiel using proven disposal technologies which are
protective of human health and the environment and supportive of our
international treaty obligations.
In closing, Mr. Chairman, we ask for your support and this
committee's support, which will demonstrate our commitment to both the
communities surrounding our storage sites and our international
partners. Thank you for the opportunity to present this statement to
the Committee. We look forward to responding to your questions.

PROGRAM COSTS

Senator Stevens. Well, Dr. Westphal, we are very pleased
that you are where you are now, because I think this program
needs some attention. I am told that this program so far has
cost $6.2 billion. I am getting used to big numbers this
morning because I have just left the Commerce Committee, where
we were talking about the Big Dig. The Big Dig was estimated to
cost $2.4 billion. It has so far cost over $13 billion and it
is not completed yet. You know, that is the tunnel under the
Charles River up in Massachusetts.
Now, this one I understand has spent $6.2 billion and the
estimate for the total life cycle cost as I understand it is
$14.1 billion, as Senator McConnell has said. The estimate,
however, has been changing each year.
How reliable is this estimate now, Joe?
Dr. Westphal. I think it is pretty reliable. But there is
an ongoing review of a new cost estimate for the future that is
under way and will be ready some time in the fall. I do not
know what that will tell us, but I think that we need to take
into account the recommendations that you will make in this
committee in decisions that we want to implement to maximize
economic efficiency in order to assure that we either maintain
the cost cycle where it is or reduce it if we can and at the
same time apply whatever safety and useful technologies that
are out there to make sure that we absolutely take care of
people and their communities.

OPENING STATEMENTS OF MESSRS. BACON AND PARKER

Senator Stevens. Now, Mr. Bacon and Mr. Parker, before I
ask you questions, did you have any statement you wish to make
this morning? Mr. Bacon?
Mr. Bacon. Sir, my statement is incorporated with the
Secretary's. But I do say that we are totally committed to
giving this program its required attention. It is a top
priority program. We take safety and environmental protection
very seriously. We take all issues and concerns raised very
seriously and are committed to meet our national obligation to
the Chemical Weapons Convention.
Senator Stevens. Thank you.
Mr. Parker.
Mr. Parker. Thank you, Mr. Chairman.
I would just like to acknowledge the subcommittee's support
to the search for alternative technologies and especially
Senator McConnell's support in resourcing this critical
program. We are fundamentally complete in the demonstration
phase of alternative technologies and, as Dr. Westphal
outlined, those decisions and how they affect especially the
Pueblo and Blue Grass sites, will be subject to a decision this
fall.
[The statement follows:]

Prepared Statement of Mike Parker

Thank you for this opportunity to update you on the accomplishments
of the Assembled Chemical Weapons Assessment program in successfully
identifying alternatives to incineration. I appreciate the committee's
support for this program, and will give you a status of the program and
accomplishments to date.
The Assembled Chemical Weapons Assessment (ACWA) program was
initiated under the Omnibus Consolidated Appropriations Act, 1997
(Public Law 104-208). As directed within that Public Law, we the
Department of Defense, Industry, Federal, State and local leaders as
well as affected community members have formed an interactive
partnership to identify and demonstrate alternative technologies to the
baseline incineration process for the demilitarization of assembled
chemical weapons.
Congressional direction was based on strong constituent concerns
over the health and safety of incineration. In order to address these
concerns and define the criteria for an acceptable alternative, public
involvement initiatives were set in place to build and maintain a
transparent program. The Keystone Center, a neutral third party, was
utilized as the facilitator to help build a program based on trust
among the stakeholders in reaching consensus of acceptable alternate
technologies. The stakeholders have coalesced into a working body, the
Dialogue, where full public involvement is the operating principle. The
Dialogue consists of a diverse group of affected stakeholders to
include: DOD staff, EPA staff, State regulators, tribal government
representatives, citizens from the stockpile communities (both pro and
anti incineration proponents), and national interest groups. Technology
providers from the commercial sector and members of the National
Research Council panel overseeing the ACWA program for the Congress
have also participated fully in the Dialogue process. Public
involvement is the cornerstone of the ACWA program through the process
established within this Dialogue group. All aspects of Technical,
Environmental, and Contractual efforts within the program have been
accomplished with Dialogue involvement and input.
The ACWA team, which consists of technical, environmental,
contractual, and legal experts, in conjunction with the Dialogue,
developed several levels of criteria that were used to evaluate the
proposed alternative technologies. Industry representatives observed
this criteria and evaluations development process as well as
participated in a two-day pre-solicitation conference in June 1997 to
assure that industry understood the objectives of the program. A
Request for Proposal was then published on July 28, 1997. The ACWA
program received thirteen original proposals. Utilizing the established
criteria, six proposals were ultimately found to warrant demonstration
testing within the program. Due to funding constraints, only three
technologies were demonstrated during 1999. These technologies were
Burns and Roe (Plasma Arc), General Atomics (Neutralization/
Supercritical Water Oxidation), and Parsons/Honeywell (Neutralization/
Biotreatment). The evaluation of these demonstrations concluded that
the Neutralization/Supercritical Water Oxidation and Neutralization/
Biotreatment technologies are viable to go to pilot testing as stated
in the ACWA Supplemental Report to Congress in September 1999.
Upon receipt of fiscal year 2000 funding, the three remaining
technologies were demonstrated. These final three technologies
demonstrated were AEA Technology (Electrochemical Oxidation), Foster
Wheeler/Eco Logic (Neutralization/Supercritical Water Oxidation/Gas
Phase Chemical Reduction), and Teledyne Commodore (Solvated Electron
Technology). The evaluation of these demonstrations concluded that the
Electrochemical Oxidation and Neutralization/Supercritical Water
Oxidation/Gas Phase Chemical Reduction technologies are viable to go to
pilot testing. The basis of these conclusions will be presented in the
next ACWA Supplemental Report to Congress.
The Strom Thurmond National Defense Authorization Act for Fiscal
Year 1999 (Public Law 105-261) directed the ACWA Program to begin
preparations for the potential implementation of viable alternative
technologies via pilot testing activities. Environmental, acquisition
and budget planning requirements were set in motion to accommodate the
implementation of an alternative technology. Also contained within
Public Law 105-261 is the requirement for the DOD to certify to
Congress that prior to implementing an alternative that the alternative
technology approach is: as safe and cost effective as incineration; is
capable of completing the destruction of such munitions on or before
incineration; and is able to satisfy Federal and State environmental
and safety laws applicable to the technology.
To ensure success regarding the possible implementation of an
alternative technology, Engineering Design Studies have been initiated
for all successfully demonstrated technologies. The goals associated
with the Engineering Design Studies are to complete a design package
that would enable industry to complete and implement a pilot facility
at a designated site and to provide cost and schedule estimates
necessary for certification per Public Law 105-261. Also, the
Engineering Design Packages will enable the Program Manager to develop
a meaningful and complete Resource Conservation and Recovery Act permit
application, which is required prior to constructing a pilot facility.
It is important to note that throughout the entire ACWA program, the
Dialogue has been kept involved and has had continual opportunity to
present their views and concerns prior to major decision milestones.
Currently, the ACWA program is participating in the Defense
Acquisition Executive (DAE) Review. Various ACWA team members are co-
chairing Integrated Process Teams (IPT) developed to establish, through
advice to the senior leadership and the ultimate decision maker, the
eventual path forward for the ultimate destruction of the Colorado and
Kentucky chemical weapon stockpiles. The IPTs will make recommendations
regarding the certification of an alternate technology per Public Law
105-261. All available information developed throughout the program,
including cost, schedule, technical data, and environmental analysis
will be considered in the DAE review process. We expect a technology
decision by the DAE for Pueblo, CO in the 1st Quarter of fiscal year
2002 and for Blue Grass, KY in the 3rd Quarter of fiscal year 2002.
As I previously stated in the 1997 ACWA Annual Report to Congress,
``it has been my belief, now validated by experience, that establishing
and promoting a cooperative working relationship and understanding
between a broad spectrum of stakeholders can and will yield positive
results. Rather than giving up authority, I have found that involving
the public in the decision making process is a powerful tool for
increasing the authority and legitimacy of the ultimate decisions''.
Thank you for your support and interest in this vital program.

PROGRAM COST GROWTH

Senator Stevens. Mr. Bacon, what factors have led to this
cost growth in the recent years?
Mr. Bacon. Sir, the costs have changed over the years, as
you mentioned in an earlier statement, I believe the $2 billion
estimate was based on mid-1980's requirements. The stockpile at
that time to be destroyed was M-55 nerve agent rockets. Scopes
have increased over the period as the total stockpile was
included in the program bringing new rules and regulations on
environmental compliance, and bringing in the CSEPP program.
All these are necessary parts for safe disposal. Also, the
Non-Stockpile Chemical Materiel Project was added, i.e., former
production facilities and binary weapons. These scope changes
have led to cost increases. In addition, it is a very complex
job, dealing with something that is as lethal as chemical
agents, making sure that we place absolute priority on safety
and environmental protection.
In a nutshell, those are the issues that relate to the cost
changes from those early days of the estimate.

ENVIRONMENTAL PROTECTION AGENCY REGULATIONS

Senator Stevens. Have there been changes in the regulations
of the Environmental Protection Agency (EPA) that apply to your
agency?
Mr. Bacon. Yes, sir, there have.
Senator Stevens. When were those changes made?
Mr. Bacon. Sir, there were major changes in the late 1980's
with the Resource Conservation and Recovery Act passage,
assuring the rules that apply to destruction processes, wastes,
secondary wastes, and hazardous wastes are maintained within
compliance. Also in the 1990's was the addition of the
requirement to assure public health again, where health risk
assessments, ecological risk assessments were added; new
challenges coming with additional rules and maximum achievable
control technology, the ``MACT'' rule as it is referred to,
which has to do with hazardous waste combustors, a number of
changes of that type.
I can take those for the record and give you a detailed
outline of the rules changes.
Senator Stevens. We would appreciate that detail for the
record.
[The information follows:]

Changes in Regulations of the Environmental Protection Agency

The following changes in federal environmental laws and
regulations have occurred since the beginning of the Chemical
Demilitarization Program:
The Hazardous and Solid Waste Amendments of 1984 were a
significant change to the Resource Conversation and Recovery
Act (RCRA). It increased requirements on the handling and
tracking of hazardous waste to include waste minimization
requirements and a national land disposal ban program.
The Emergency Planning and Community Right to Know Act
(EPCRA) was enacted in October 1986. The Act increased
notification and coordination requirements of a facility with
state and local emergency planning entities. It also added
reporting requirements of inventories and environmental
releases of potentially hazardous chemical substances.
The Clean Water Act Amendment of 1990 increased
requirements for storm water management and reporting.
The Pollution Prevention Act of 1990 required facilities to
implement source reduction and recycling activities. Facilities
are then required to provide an annual report on these
activities.
Clean Air Act Amendments of 1990 required new programs and
made major changes to the way that air pollution is controlled
in the United States. It emphasizes an incremental approach to
achieving attainment of the national ambient air quality
standards. Facilities must obtain permits, conduct monitoring,
and add pollution controls, or change production processes to
further reduce emissions.
Federal Facilities Compliance Act of 1992 ensured that
there is a complete and unambiguous waiver of sovereign
immunity with regards to the imposition of administrative and
civil fines and penalties against federal facilities. This act
allows state environmental agencies and the Environmental
Protection Agency to impose civil penalties and administrative
fines on federal facilities under RCRA for violations of
federal, state, and local solid and hazardous waste laws.
Hazardous Waste Minimization and Combustion Strategy was
announced in May 1993. The strategy required the performance of
extensive human health and ecological risk assessments for any
hazardous waste combustor prior to being permitted.
The Hazardous Waste Combustors Maximum Achievable Control
Technology Rule was enacted in September 1999. It established
technology based emission standards for hazardous air
pollutants from hazardous waste combustors. Additionally, it
added new facility testing requirements and stringent operator
training requirements for hazardous waste combustors.
Executive Order 13148, ``Greening the Government through
Leadership in Environmental Management'' was signed in April
2000. This Executive Order was issued to ensure that all
necessary actions are taken to integrate environmental
accountability in agency day-to-day decision-making and long-
term planning processes, across all agency missions,
activities, and functions. Pollution prevention is highlighted
as a key aspect to the environmental management system process.
In particular, the order requires agencies to implement
compliance auditing programs and environmental management
systems. It also establishes agency goals to reduce the use of
particular toxic chemicals, reduce the emissions of toxic
release inventory chemicals, and to use environmentally
beneficial landscaping.

ENVIRONMENTAL IMPACT STATEMENTS

Senator Stevens. How many environmental impact statements
have you made in this process so far?
Mr. Bacon. Sir, we have made a programmatic environmental
impact statement for the total program and a subsequent record
of decision by the Secretary of the Army in the late 1980's. We
have also made a site-specific environmental impact statement
for each and every destruction site, with the exception of the
two which we still have to implement based on technology
decisions. Those two are the Pueblo and Blue Grass sites.
In addition to the environmental impact statements, there
are required assessments, records of consideration that are
made and filed. Environmental impact studies, of course,
involve extensive public input, public hearings, and review. It
is a statutory process for the environmental permitting part of
that. It is also public review of the impact statements
themselves.
Senator Stevens. This process has been going on since about
1985, has it not?
Mr. Bacon. Yes, sir.

CHEMICAL WEAPONS DISPOSAL

Senator Stevens. Mr. Parker, what is the projected cost now
for disposing of the demilitarization facilities in and of
themselves, just the facilities? Do you have a projected cost
for the disposal of facilities you are going to use, which will
be obsolete when you finish the job?
Mr. Parker. I think I would refer that question to Mr.
Bacon. The alternative programs that I have been involved with
have been really a technology demonstration program, Senator.
Senator Stevens. I see. I apologize.
Mr. Parker. Mr. Bacon has the facilities.
Mr. Bacon. Senator, I will take that question. The closure
of the facilities is another requirement included in the
Resource Conservation Recovery Act (RCRA) permits. This is to
assure that we meet all appropriate requirements to close
facilities. Those requirements are very stringent. As you know,
originally there was legislation that required these facilities
be dismantled and allowed no future use. Those are the types of
clean closure, where we thoroughly decontaminate the facilities
of any agent or any hazardous wastes involved in the facilities
and secure it so there is limited access.
The expected estimate at this time to completely close the
Johnston Island facilities is over $400 million. That is a big
ticket item. However, I have to point out that in that $400
million, a substantial component of that, probably 40 percent,
relates to the remote location of Johnston Island, as opposed
to what a stateside facility might cost.
Senator Stevens. I thank you very much. I wanted to get
some background here before I yield to my colleagues who have a
direct involvement.
Senator Shelby.

CHEMICAL STOCKPILE EMERGENCY PREPAREDNESS PROGRAM (CSEPP)

Senator Shelby. Thank you. Thank you, Mr. Chairman.
Mr. Bacon, some in the Anniston community in Alabama feel
strongly that they have been both consistently and
intentionally misled regarding risk, operational incidents, and
public safety procedures associated with the chemical
destruction program. A lot of us are concerned about the Army's
policy regarding chemical exposure. Elected officials there and
the general public, a lot of them in the Anniston community,
have been told for years that the Army's objective was zero
exposure. Has the Army changed its objective from zero exposure
to zero fatalities and does the Army believe that people will
be exposed to chemical agents?
What medical studies or data can you share with this
committee regarding the long-term health impacts of non-lethal
exposure to chemical agents?
Mr. Bacon. Senator Shelby, most of that I believe supports
the Chemical Stockpile Emergency Preparedness Program and the
protection of the public in the unlikely event of a storage
accident or some other consideration that would cause an agent
release to the environment and the public. So Mr. Salter with
FEMA will be addressing some of those issues related to the
protection of the public sector.
The issues relating to misleading the public--sir, we are
open. We share the information we have through our outreach
centers and through the various citizens' advisory commission
meetings. We have no secrets in the program. We take those
issues very seriously that the public has raised. We take each
one of those and thoroughly evaluate them and make the maximum
effort to assure that we are safely operating, that we are
protecting the public and our workers.
Senator Shelby. Mr. Parker, do you have any comments on
that?
Mr. Parker. From an alternate technology standpoint, the
operation of the plants that would be based on an alternate
technology would follow the same policies and procedures that
would be established for any of the alternatives, including
incineration. So Senator, in that regard the technology as far
as how it would affect policy is really not an issue in how the
CSEPP program would respond.

PROGRAM MANAGEMENT STRUCTURE

Senator Shelby. Secretary Westphal, last spring the GAO
detailed problems in the execution of the demilitarization
program due to a complex management structure which hinder
accountability. I believe that accountability is important,
very important, especially where safety is involved. This is
what we are getting at. Central to all of this is safety of the
people.
What has the Army done to address these problems since the
GAO study and what more can be done?
Dr. Westphal. I think, given the complexity of the issue,
obviously we have created a complex organizational system
within the Department to address it. As we move forward with
this program, and as the technologies get more complicated, and
as the answers to some of the questions that you are raising
become more complex, we need to address what the chairman said
earlier in his statement, in which he talked about public
involvement. You said greater stakeholder involvement, more
transparency in terms of the program. All of these things need
to be addressed.
I started asking questions about what are the lines of
accountability and chain of command. We do have an existing
chain of command that works. However, we need to make it
clearer to the communities and the stakeholders what that chain
of command really is.
Ultimately, the Secretary of the Army is the person
responsible. The Assistant Secretary of the Army for
Acquisition, Logistics and Technology is the acquisition
executive, but reports to the Secretary of the Army. The
Secretary of the Army, together with the Under Secretary of
Defense for Acquisition, Technology and Logistics, should be
able to work together with Defense acting as an oversight
agency in looking at the program and assuring that it meets not
only the Secretary of Defense's priorities in terms of funding
and future outlays and all of that, but as well as
coordination.

PUBLIC SAFETY

Senator Shelby. This is an appropriations panel. We are
very interested in funding, but we are very interested in the
central issue and I think that is safety, safety of the people
in the area, wherever it is, in my State of Alabama or
elsewhere, who could be the victims of an accident or a
technological failure of some kind.
So that is what we are getting at. We want the weapons
destroyed because they are deteriorating. We all know that. But
we have got to do it in a safe, the most technologically
advanced way, and I think that is one of the central questions
of a lot of the people in the Anniston area. They are not
satisfied with the safety response and the information that you
are giving them.
Dr. Westphal. I think our absolute priority is, and would
be in the future, safety. Cost is a major factor, as it always
will be.
Senator Shelby. Cost is a factor, but cost of losing lives,
fatalities, is a heck of a consideration here, too; is it not?
Dr. Westphal. Absolutely. For example, to address a point
Senator McConnell made earlier, I said earlier to one of my
colleagues in the Office of the Secretary that as we identify,
as the environmental impacts are done on these two new plants,
Blue Grass and the other--and I do not know if you have a time
constraint.
Senator Shelby. Go ahead.
Dr. Westphal. But as they are identified, we want to use
the best technology. We should use the best technology, the
most advanced technology that provides the greatest protection
for the communities involved.

ALTERNATIVE TECHNOLOGIES

Senator Shelby. Well, that comes to my next question, then.
Given the state of the program in Anniston, Alabama, does a
faster, cheaper, and safer alternative exist to eliminate these
weapons other than what you are proceeding with now?
Dr. Westphal. We do not know as of today, as of this
hearing, what that technology may be. We are in the process of
trying to identify alternative technologies that may be faster,
cheaper, more effective, and offer more protection. As we
identify them, I intend to work with the Under Secretary of
Defense to come to you, to the Congress, to the chairman of the
Appropriations Committee and others on the authorizing side, to
look at how we implement those technologies at a place like
Anniston, where we already have built a specific disposal
technology for use.
So if we think we have a better way to do it, we are not
going to shy away from coming back to Anniston and looking at
that. At least I do not believe that we should do that.
Senator Shelby. Do you want to say something, Mr. Bacon?

SAFETY ASSESSMENT

Mr. Bacon. Yes, sir. Senator Shelby, I would like to just
back up just a minute in talking about safety, making sure that
the public is protected and what those oversights are. Of
course, we use the Centers for Disease Control as an
independent assessor of public health. We use the National
Research Council as an independent assessor of the operations,
and of course the regulatory agencies, the states, as well as
the EPA.
So we have independent bodies from time to time that we use
to review safety assessments of the program, particularly
operational phases, like at Tooele, Utah. So we do place the
top priority on safety. Those independent bodies do in fact
verify that our operations are safe and protective of public
health and the environment.
Senator Shelby. Well, I want to make sure as best I can as
a member of the Senate and a member of this panel in funding
these programs that the best technology issued, that our
people, whether in my State of Alabama, Kentucky, Utah, or any
other State, are not guinea pigs for the testing of some
technology, because we cannot afford to make a mistake here
with the use of this technology, or the software that runs it.
Every part of this program is central, I believe, to the safety
of the people in the Anniston area who are being asked to live
with the impact of this program.
Mr. Bacon. Yes, Senator, and that certainly is our
philosophy, and that is applied continuously in the program in
terms of every step or action that is taken. That kind of
assessment is made.
Senator Shelby. Well, why is the problem persisting in some
of the communities if this would be so, what you are saying?
Mr. Bacon. Well, sir, that is a good question, Senator
Shelby, and we continuously work to improve the sharing of
information. Gaining the credibility and the confidence of the
people obviously is a major action to achieve, a necessary
action that must be achieved, so that everyone, essentially,
everyone is comfortable with the fact that we are protective of
their health, that no action will be taken unless it is
protective of their health.
We will continue that and continue to work harder and
harder to improve that, getting the information out and sharing
it with the public. As I said earlier, there are no secrets to
the program. We try to be as open as we can, sharing all the
information that we have. Each and every incident, you may
notice was shared with the public.
Senator Shelby. When you say sharing all the information
you can, would not transparency be central to alleviating any
fears that the people would have? Assuming that you have the
best technology, if you show them that you have the best
technology, that you are dotting every i and crossing every t
for safety, would that not be very important, to hold back
nothing?
Mr. Bacon. Certainly. We do not hold back anything. Maybe I
misspoke when I said sharing what we can. I did not mean there
was any limits to it.
Senator Shelby. Sharing everything?
Mr. Bacon. Sharing everything, certainly.
Senator Shelby. Mr. Chairman, thank you for your
indulgence.
Senator Stevens. Yes, sir.
Senator McConnell.
Senator McConnell. Thank you, Mr. Chairman.

DESTRUCTION SCHEDULES AND PROJECTIONS

Mr. Bacon, is it your testimony that all stockpile sites
with the exception of Colorado and Kentucky will complete
operations in compliance with the 2007 convention deadline?
Mr. Bacon. Sir, consistent with application of safety and
environmental protection, that is our next priority, and we are
focused on meeting the Chemical Weapons Convention date. But
more importantly----
Senator McConnell. Is that a yes or a no?
Mr. Bacon. That is a yes, we are focused on meeting that
treaty compliance date, yes, sir.
Senator McConnell. What is the projected schedule for
destruction of the stockpile in Kentucky if you use the method
of incineration?
Mr. Bacon. Sir, the projected date would be based on when
we are able to start facility construction, permitting actions
based on technology decisions that the Under Secretary of
Defense would make next year and provide those to the Congress.
We are looking at 6 to 7 years to construct the facility and
complete the operations. So we are talking about 2007, very
close to the treaty deadline.
Senator McConnell. You are saying that if you use
incineration in Kentucky, the project would be begun or
completed by 2007?
Mr. Bacon. I am saying that we would be very tight, but we
have a chance to complete it by that time. The variables in
there, of course, are the construction--the permits, I should
say, the environmental permits, receipt of permits, to allow
construction of the facilities. We have 523 tons of stockpile
there. There are over 60,000 nerve agent rockets. But we would
tailor the facility specifically to the stockpile at that site.
Senator McConnell. Mr. Parker, if we were to use an
alternative to incineration, what would be the time line?
Mr. Parker. Senator, as we reported in the ACWA annual
update to the Senate, we used a very conservative estimating
technique at the end of the demonstration and we had come up
with an approximate mid-2011 date for Blue Grass. We are in the
process of updating those estimates based on some continued
effort under what we call engineering design studies.
The commercial contractors who have completed the design,
the preliminary design for a Blue Grass facility, have come in
to us with an estimate of a 2008 to 2009 time frame. We are in
the process of scrubbing that down and it will be subject to
the defense acquisition review that Secretary Westphal
mentioned as the independent assessment of that date.
I want to stress that, because of the history of the
program and direction from or advice from this committee's
professional staff, first Mr. Kimmitt and now Mr. Hawkins, that
we used very conservative estimating techniques in putting
those dates together. So those are relatively high confidence
dates.
Senator McConnell. So we are looking at a delay of a few
years at least if we use an alternate disposal approach; is
that what I am hearing here, listening to you and Mr. Bacon?
Mr. Parker. On the simple arithmetic, yes. The estimating
base for the two numbers is going to be reconciled by this
Defense Acquisition Executive review so that we have a common
baseline of comparing, a common level of confidence and risk.
Senator McConnell. Given the condition of the material
there, does that involve any risk, the delay, if we ended up
picking an alternate method of disposal?
Mr. Parker. Senator, as to the stability of the stockpile,
the recently completed assessment is that the stockpile in and
of itself, while it is old, is stable. I think about 2040 was
the estimate of the time to expect any kind of deterioration
with the M-55 rockets, which are the most problematic item.
That is from a storage stability standpoint. The forcing
function that could result in an event in storage would be an
external event, a lightning strike, a tornado, or that type of
an event. If you look at the risk associated with storage, it
is a very small number, but it is slightly higher than the
risks that would be associated with proceeding with onsite
disposal, whether that is an incineration-based technology or
for that matter an alternate technology.

DESTRUCTION SCHEDULES AND PROJECTIONS

Senator McConnell. Well, if incineration is chosen, Mr.
Bacon, it is your testimony that the facility would be
constructed and the incineration completed by 2007? Is that
what I heard?
Mr. Bacon. Sir, the key variables in there are of course
the permitting, the time it would take for the permitting. That
is a schedule risk. But we believe that we can complete it by
2007, but that means that we have to make a decision this fall
through the DAE, Defense Acquisition Executive review process,
and then immediately go into preparing the permit applications
and the permit so that we can start construction.
We would be in a position to start infrastructure upgrades
that are necessary there during this next year.
Senator McConnell. So Mr. Parker, do you know enough,
having looked at these alternate technologies, even though you
have not completed the study, do you know enough about them to
know, once that is begun, how long it would take to finish? You
are saying we would finish up in 2010 and 2011 if we used one
of these alternate technologies; did I hear that correctly?
Mr. Parker. Based on the most recent input from the
commercial contractors who have now completed a preliminary
design, and we are looking at the 2008, 2009 time frame for
Blue Grass, based on their estimates.
Senator McConnell. To start or to finish?
Mr. Parker. That is completion of the total effort. I
should have noted earlier that the completion for the purposes
of compliance with the Chemical Weapons Convention would be 6
to 12 months before that date, differentiating between
destruction of the agent as required under the treaty and then
completion of all of the so-called secondary wastes. So that
the 2008-2009 date would be completion of the total job.
Senator McConnell. So the difference in the delay, then,
between one approach versus the other is only a year or two? Is
that what we are talking about here?

CONSTRUCTION COSTS

Mr. Bacon. It is certainly in that time frame, Senator.
Senator McConnell. Now let us look at costs. In 1986 the
Army testified that the incineration construction, facility
construction, would cost $38 million and the entire stockpile
would be eliminated in 1 year. What is the current estimated
cost of construction for incineration?
Mr. Bacon. Senator McConnell, would you rephrase that
question, sir?
Senator McConnell. In 1986 the Army said construction,
presumably of an incineration facility, would cost $38 million
and the entire stockpile would be eliminated in 1 year. What is
your testimony today?
Mr. Bacon. Okay, sir. Obviously, the construction is much
more complex than probably estimated on that basis in 1986. The
military construction cost of these facilities, regardless of
the technology, will probably be on the order of $200 to $250
million. I believe that was your question as I understand on
the construction portion.
The total operation will vary from site to site depending
on the size of the stockpile and the types of munition
configurations, the numbers of different plant changeovers that
are made to process the different agents and different
technologies. So our estimate obviously is to complete by 2007.
Senator McConnell. Mr. Parker, your estimate is 2008 or so
if we should pick some alternate disposal?
Mr. Parker. Yes, sir.
Senator McConnell. Now, what about the cost of that? Do you
have any sense of what it might cost to use another approach?
Mr. Parker. The cost estimates, sir, are being massaged. We
do have from the technology providers an estimate and it is the
total cost to construct and operate would be in the $500 to
$600 million range.
Senator McConnell. So it would be more costly.
Mr. Parker. No, I do not think--Mr. Bacon, I think
referenced military construction only, versus total life cycle
cost.
Senator McConnell. Let us go back to the total cost then,
life cycle cost.
Mr. Bacon. For a Blue Grass facility?
Senator McConnell. Using incineration.
Mr. Bacon. I believe that number is about $1 billion.
Senator McConnell. And life cycle costs? Apples and apples.
Life cycle costs on an alternate technology are likely to be?
Mr. Parker. Including everything, the government oversight
cost, the depot operating cost, as well as the contract value,
it is going to be about the same, Senator. The size of the
plants, the complexity of the plants, the size of the work
force and the operating duration, whether it is an incinerator
or an alternate technology, is fundamentally the same. So the
life cycle cost within our ability to estimate is going to be
the same number.

ALTERNATIVE TECHNOLOGIES

Senator McConnell. Mr. Parker, you have been around for a
while. You recall there has been considerable opposition to
exploring alternatives to incineration, which I have been
advocating for years. I finally won that battle over a lot of
reluctance inside the DOD. Do you feel like the effort to look
at alternatives has been worthwhile?
Mr. Parker. Yes, sir, it has. I believe the most
significant value, I think, was to bring in the constituency
who was very, very skeptical of where the Department of Defense
was going with the chemical weapons disposal program and bring
them in as part of the process, open the process up, and show
them that what we do internal to the Department of Defense
including the Department of the Army, is straightforward, above
board, that there is honesty and integrity in the process, and
to bring them in and show them and allow them to participate in
the decisionmaking process.
The decisions are made by the Department as our
responsibilities, but the bringing the public in--and that
includes a spectrum of the public from people who are very
supportive of the incineration approach to those who are
vehemently opposed to the incineration approach.
Senator McConnell. Can you describe the level of support
you have received from above on this whole issue of looking at
alternative technologies during the process?
Mr. Parker. At the Secretary of Defense level, the
instruction from Dr. Kaminski when I was chosen to do this job
was to go out and find alternate technologies if they exist and
determine whether or not they are appropriate and to do that in
such a manner as that it resolves the technology issue and
takes it off the political table.
The Office of the Secretary of Defense has been very
supportive throughout this. I have had very close collaboration
with my counterpart in the Army, Mr. Bacon, through the
program. The Army has been very respectful of the way the
Congress constructed Public Law 104-208, which required a
direct reporting line from the alternate program into the
Office of the Secretary of Defense.
Senator McConnell. So PMCD has been enthusiastic about
looking at these alternatives from the beginning?
Mr. Parker. Well, I would say that they have observed the
law and we have shared information back and forth. We do have
to recognize, Senator, that the Program Manager for Chemical
Demil is pursuing two alternate technologies or alternative
technologies at two sites, Edgewood and Newport, and that much
of the information that we started the ACWA program which came
from a very open collaboration with the team within PMCD that
provided that information.
Senator McConnell. But in any event, you think that the
community involvement that came about as a result of looking at
alternative disposal methods has been a healthy thing for the
Army and ought to be pursued in the future in these kinds of
issues, right?
Mr. Parker. I believe so, Senator. I do not know that we
could have ever reached a consensus had we used a more
traditional, inward-focused process. We had to bring in the
affected community so that they would have some sense of
confidence that we really were exploring every possible
alternative and giving them full evaluation.
Senator McConnell. Dr. Westphal, when do you expect a
decision to be made with regard to Kentucky as to which
approach to take, some alternative, assuming we finish that
up--and the date to finish that, Mr. Parker, is when, to finish
up the assessment of alternative techniques?
Dr. Westphal. I think Blue Grass is in the spring of 2002.
Am I right on that?
Mr. Bacon. Yes.
Senator McConnell. So some time next year we will have an
announcement about which method of disposal you prefer, is that
right?
Dr. Westphal. Right.

COMPLETION SCHEDULES

Senator McConnell. Now, in your testimony you state that
the stockpiles for Arkansas, Alabama, and Utah are all on
schedule to be completed by 2007, and we have heard that again
today. Is that correct?
Dr. Westphal. Yes, sir.
Senator McConnell. All of those sites are going to be
cleaned up and completed by 2007?
Mr. Bacon. Sir, Senator McConnell, a point of clarification
there. In terms of cleaned up, by 2007, actually 2006, we will
meet the Chemical Weapons Convention destruction of all the
chemical warfare materiel. Closure of the facility, we are not
bound by the treaty, but we will do that in an orderly fashion,
and it may or may not be completed by 2007, but shortly
thereafter.
Senator McConnell. So in terms of the concerns of the
communities that live in proximity to it, the dangerous
materiel will be destroyed by then?
Mr. Bacon. The dangerous materiel will be destroyed, the
hazardous material will be contained.
Senator McConnell. Then I think I heard at Blue Grass,
Kentucky, we are talking about a year or so later, no matter
which approach is taken, whether we do it through incineration
or some other disposal method. Is that right? You all are
shaking your heads yes.
Mr. Bacon. Yes, sir.
Dr. Westphal. Yes, sir.
Senator McConnell. This is a matter of no small concern to
the people in my State. So you are shaking your heads yes?
Dr. Westphal. Well, I think we have to--I have considerable
experience dealing with environmental impact statements in my
previous job and I can tell you that predicting on a timely
basis conclusion of environmental impacts and getting through
all of that is sometimes risky. I would say that we are going
to have to take some very strong steps to ensure that we move
along expeditiously.
I think the leadership of the Department----
Senator McConnell. I hear you hedging your bets.
Dr. Westphal. No, not at all. What I am telling you is we
want to make a commitment to you and to your constituents that
we will really focus on this and we will make sure that we do
this as expeditiously as possible, and make sure that these
environmental impact statements are done in a timely way and we
do not drag this process on.
If we drag it on, not only do we risk greater danger to the
communities by the stockpiles themselves, but we also risk
alienating our chairman here by asking him for more money, an
extension of time and so on and so forth.
I want to tell you that I am in earnest about trying to do
whatever I can and for the Department to do whatever it can to
address the management issues and to expedite this program.

PRIORITY OF THE CHEMICAL DEMILITARIZATION PROGRAM

Senator McConnell. Let me just ask you, Dr. Westphal, in
closing: Other than in preparation for this hearing, how often
have you attended meetings or held conversations with senior
Army officials on the chemical disposal program?
Dr. Westphal. Only once prior to this, to prepare for this
hearing. I have been in this position now for about 2 months.
Only once before.
Senator McConnell. Well, you know, I think part of the
problem over the years, and I will finish up, Senator Stevens,
is that the chemical demilitarization program has just not been
a top priority at the Department. It is a matter of enormous
concern to those of us who have constituents located in
proximity to these dangerous weapons.
I hope, keep hoping--this is one of the first issues that
came up when I came here 16 years ago, now almost 17 years
ago--that we are about to see the end of these weapons. I hope
with new people coming in that this will occupy a level of
priority so that we can not only see the light at the end of
the tunnel, we can emerge from the tunnel and it is over, some
time in the next 7 or 8 years.
Can we expect that, Joe?
Dr. Westphal. Yes, sir. I think this is very important from
the standpoint of health and safety and also environmental
protection. I think it would do the administration a great deal
of good to make sure that we apply the stringent constraints
that you are demanding of the program.
I also would say that it is always a catch 22 situation.
When I first began to ask questions about this program, one of
my first questions is, can I go to the Senate, can I stand
before the Senate Appropriations Subcommittee and say without
any hesitation that the Army is taking every step possible at
the existing sites, Senator Shelby's issues concerning
Anniston, that we are taking every step under current
technologies to make sure that we are conducting this work in a
safe manner, that we are protecting citizens, and that we are
working well with FEMA and local communities.
The answer I got was yes, we are doing everything we can to
test, to monitor, to ensure that we do not have releases, that
we do not have problems associated with both the disposal and
storage of the weapons. So we need to just continue to make
sure that we do that.
Senator McConnell. Thank you, Mr. Chairman.
Senator Stevens. Thank you.

MANAGING THE CHEMICAL DEMILITARIZATION PROGRAM

I am going to have to go to the floor for another matter. I
just have to ask one question, though, before I go. It is my
understanding, Mr. Parker, you answer to the Under Secretary of
Defense for Acquisition and Technology, and, Mr. Bacon, you
answer to the Assistant Secretary of the Army for Acquisition,
Logistics and Technology and the Secretary of the Army. Has
this bifurcated process delayed this?
I ask that because as I understand it it is the Assistant
Secretary of Defense that is going to certify the alternative
technology. Yet those technologies are being worked on by you,
are they not, Mr. Bacon?
Mr. Bacon. Sir, Senator Stevens, the technologies for the
existing nine sites that we are working are managed by the Army
and myself. Alternative technologies for disposal of assembled
chemical weapons are being assessed by Mr. Parker. But I would
say that in the Defense Acquisition Executive review process
and, in fact, in the milestone decision authority process of
both the Army and the Department of Defense, we work
collaboratively. We have integrated process teams and the
actual chair of the overarching committee is a member of the
Office of the Secretary of Defense (OSD), and Mr. Parker and I
are co-chairs of those working committees that work up to that
OSD level.
So I do not believe that it has hindered or delayed any of
the activities or our ability to work together through that
process, even though we report to separate positions.
Senator Stevens. We may have to go into that later to see
if that is part of the delay here, because it does seem to me
that we are waiting for the Under Secretary of Defense to make
the decision, but you are working on an entirely different
line. I would hope that that does not mean that we have got to
go up to the top and then come back, then go up to the top and
come back.
You assure us that you are working together all along on
these two different lines of attack?
Mr. Bacon. Yes, sir. When our working committees have the
final recommendations to the committee, at the OSD level, the
Under Secretary of Defense for Acquisition, Technology and
Logistics level committee, for that person to certify
technologies and make technology decisions and recommendations,
that will be later this year. We are not at that point yet, so
the vacancy of that position has not impacted the decision.
Senator Stevens. Senator Inouye, I apologize, but if we
finish this panel call up the next panel; all right?
Senator Inouye. Yes, sir.
Senator Stevens. Thank you.
Senator Inouye [presiding]. I would like to summarize what
I have heard and ask for your opinion whether I am correct or
not. Number one, you maintain that the risks involved in
prolonged storage would be greater than disposal itself; is
that correct?
Mr. Bacon. Yes sir, Senator Inouye. That is certainly the
case. The consequences of a storage accident in the public is
what we are concerned about. The chemical demil facilities are
designed to have safety features incorporated in them and
layers of protection.

DESTRUCTION TIMELINES, COSTS, AND VARIABLES

Senator Inouye. Therefore, it is incumbent upon the
Department to dispose of these horrific weapons systems as soon
as possible if we are to maintain public health and safety.
Mr. Bacon. Yes sir, maintain the public health and safety
and then, as expeditiously as we can, complete the job.
Senator Inouye. However, it would be next to impossible at
this stage to predict the time of disposal and the costs
involved because of unanticipated problems, such as
Environmental Impact Statement (EIS), environmental groups,
legal proceedings, activities of the National Institute of
Health (NIH), activities of EPA or FEMA; is that correct?
Mr. Bacon. Yes, Senator, that is correct, that those are
variables that can impact on cost and schedule, but keeping in
mind that we must place safety and protection of the
environment number one, as Senator Shelby has reminded us also,
that we do that. But there are those kinds of factors that can
impact on cost and schedule.
Senator Inouye. What you are telling us is that the science
of disposal and demilitarization is a new science and it is
still evolving. For example, Johnston Atoll was the first
facility of its kind in the world, was it not?
Mr. Bacon. Yes, sir. The Army had earlier destroyed
stockpiles at Denver, Colorado, Rocky Mountain Arsenal, using
similar technologies in the 1970's, which were protective of
our worker health. But we did not have the much broader
applications that we are using today.
Senator Inouye. You are still learning from that Johnston
experience?
Mr. Bacon. Yes, sir. We apply those lessons that we learned
from Johnston Atoll as well as the Tooele facilities,
incorporated those designs into the new facilities. Anniston,
for example, has many safety features enhanced in its facility
where we have added additional pollution abatement systems,
automated certain systems, that we are also doing at Tooele.
But we continue to use the lessons learned. A very
extensive program.
Senator Inouye. With all the knowledge that you have at
this moment, you can estimate that Anniston can have its
closure ceremony about 2011?
Mr. Bacon. Sir, Senator Inouye, we plan to beat that
substantially. We are planning to complete destruction of the
weapons at Anniston by the year 2006 and have our final closure
and get off the depot by 2007, 2008. But 2006 is our date to
celebrate elimination of that risk to the Anniston community
totally.
Senator Inouye. Although we did not have any disposal site
near our cities, we had one on an island not too far away. I
can feel the concern expressed by my two colleagues, because we
are constantly reading reports about chemicals being found at
Spring Valley, Maryland. I think we should keep in mind that
our first method of disposal was burial and we are now finding
out the costs of such burials. So I can assure you, whatever we
can do we will do.
Mr. Bacon. Yes, sir.

ANNISTON TIMETABLE

Senator Shelby. Mr. Chairman, could I ask one more
question?
Regarding Anniston, let us talk about the timetable. Where
are we today in the construction, just step by step briefly?
Where are we, Mr. Bacon?
Mr. Bacon. Yes, sir. Senator Shelby, today we are
substantially complete with the construction of the facility.
Senator Shelby. What does that mean?
Mr. Bacon. What that means is we are in the 98, 99 percent.
Senator Shelby. Ninety-eight, ninety-nine percent of your
initial construction?
Mr. Bacon. No, the construction of the facility, total
construction of the facility. What that means is that there is
a 1 to 2 percent time that we are correcting punch list items,
construction anomalies, making sure that all of the wiring is
correct--the final finishing touches of construction.
Senator Shelby. Westinghouse is involved in this, are they
not?
Mr. Bacon. Yes, sir, Westinghouse Anniston, who has been
acquired by the Washington Group International, or Morrison-
Knudsen formerly. We will have in fact a ceremony--we would
like you to attend--on June 8th.
Senator Shelby. Will it be safe?
Mr. Bacon. Yes, sir, it will be safe. As a matter of fact,
our safety record in building and operating these facilities
from the Occupational Safety and Health Administration (OSHA)
reviews and from the OSHA standpoint, as well as all of the
other safety reviews, is remarkable.
Senator Shelby. How are you going to meet the concerns of
people in my State in the Anniston area, several hundred
thousand people that have genuine concerns about whether this
facility will operate safely? How do you do this? We are going
to have another panel in a few minutes that is going to raise
some concerns that they have with your facility.
Mr. Bacon. Senator Shelby, I understand those concerns and
we take those very seriously. We will be addressing each one of
them during the period between completion of construction and
the beginning of operations, the phase we call systemization,
where we will actually be testing the system. We will then
enter into surrogate trial burns. In other words, we will be
burning some organic compounds that are much more difficult to
destroy than the nerve agents. Those are to satisfy the
conditions of the permit, to demonstrate that we can operate
the facility within the constraints of the permits.

PUBLIC SAFETY

Senator Shelby. How are you going to, in the short period
of time, alleviate the concerns of evacuation in case something
went wrong in the community, something lethal, deadly? These
are real concerns.
Mr. Bacon. I understand and am concerned about those issues
also. You will hear from Mr. Salter on the next panel, that the
Army and FEMA work very diligently to demonstrate that the
public will be protected and can be given the necessary
protective actions to take to assure that in the event of a
stockpile storage accident, which would generate the greatest
hazard to the public, that they will be protected.
As I was saying, during the next year, from completion of
construction to start of operations, that is where we really
prove that we are ready to operate. We want to expand our
public outreach to assure we get that kind of information out
to the citizens.
Senator Shelby. Well, I can feel a lot of questions coming
from the area, people in my area of Alabama. They are really
concerned.
Mr. Secretary, do you have a comment?
Dr. Westphal. Just a comment, Senator. As you know, we are
beginning this process in a way--we have some experience at
Johnston Atoll, but the situation there is somewhat different
than it would be at Anniston or some of the other places where
there are larger populations around them. So what I would ask
is to say, you know, the Army has protocols for, as you use the
word, for transparency, for informing people, and for getting
input from stakeholders and so on. But we may not have all the
answers as to how to best do that. We look to you and to other
members of the delegation perhaps to help us identify what
those might be if you feel we are not doing everything.
Senator Shelby. We are looking to you for the central issue
here to be resolved. That is safety, real safety. Then there is
the perception of safety and concern. I think you have both and
I think you have to deal with them and you have to deal with
them in a forthright way. You cannot cut corners. This is not
something that you can cut corners on. There is too much at
risk, too much risk. Too many people could be at real risk, and
you know it.
Dr. Westphal. Yes, sir.
Senator Shelby. Thank you.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. Mr. Secretary and your colleagues, we thank
you very much. The chairman has asked me to thank you for your
testimony.
Dr. Westphal. Thank you, Mr. Chairman.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to Dr. Joseph Westphal

Questions Submitted by Senator Richard C. Shelby

MANAGEMENT STRUCTURE

Question. Last spring, the General Accounting Office detailed
problems in the execution of the demilitarization program due to a
complex management structure, which hindered accountability. What has
the Army done to address these problems? What more can be done in the
next year?
Answer. The management structure of the chemical demilitarization
efforts has been shaped largely by statute. Program management roles
and responsibilities as well as accountability and coordination roles
in the area of chemical demilitarization within the Army have been
clearly defined by the Department of Defense.
The Program Manager for Chemical Demilitarization (PMCD) manages
and executes the U.S. Chemical Demilitarization Program. He reports
directly to the Assistant Secretary of the Army for Acquisition,
Logistics and Technology (ASA(ALT)), who serves as the Army Acquisition
Executive with milestone decision authority for the Chemical
Demilitarization Program. The Program Manager for Assembled Chemical
Weapons Assessment (PMACWA)--a research and development program--
manages and executes the ACWA Program. Consistent with Public Law 104-
208 and Public Law 105-261, the PMACWA reports to the Under Secretary
of Defense for Acquisition, Technology, and Logistics (USD(AT&L)). The
Assistant Secretary of the Army for Installations and Environment
(ASA(I&E)), in coordination with the Federal Emergency Management
Agency (FEMA), provides program oversight, policy, and guidance to the
Chemical Stockpile Emergency Preparedness Program (CSEPP). The Deputy
Assistant Secretary of the Army for Chemical Demilitarization
(DASA(CD)) ensures coordination among the appropriate organizational
elements involved with chemical demilitarization in the Army and the
Department of Defense.
Procedures are in place to promote the flow of program-related
information between all elements of the program. This has enhanced
communication and coordination between the Offices of the Secretary of
Defense, Assistant Secretary of the Army (Acquisition, Logistics and
Technology); the ASA(I&E); the program managers for Chemical
Demilitarization and Assembled Chemical Weapons Assessment; the Soldier
Biological and Chemical Command; and Federal Emergency Management
Agency.
The Department of Defense is conducting a Defense Acquisition
Executive Review of the Chemical Demilitarization Program in the first
quarter of fiscal year 2002. One of the issues that will be addressed
at this review includes the formalization of a plan that integrates
roles and responsibilities of the PMCD and the PMACWA.

MAJOR CHALLENGES

Question. Mr. Secretary, as of today, what are the major challenges
presented by the complex task of safely destroying the chemical
stockpile?
Answer. The Army faces a number of significant challenges as we
move forward with existing and planned operations to meet requirements
of public law and the Chemical Weapons Convention. It is imperative
that we maintain momentum and the full funding necessary to see the
projects mature through the systemization, operations and closure
phases. We must determine a technology path forward for Pueblo and Blue
Grass, using sound science and frank dialogue, so we can proceed with
the destruction of those stockpiles. Personnel retention issues,
including the maintenance of the right skills mixture for government
and contractor employees, must be successfully addressed for these
relatively short duration projects. We must successfully manage the
degradation of the stockpiles, which is an ongoing issue as the weapons
deteriorate with age, so we can continue to minimize risk to the
workers and the public. Finally, developing and achieving approved
closure standards, working with the various stakeholders at all of our
sites, to include state and local governments, continues to be a key
program objective.

PUBLIC OUTREACH EFFORTS

Question. What specific ``increased outreach efforts'' can the Army
implement which will ensure that the public remains properly informed
as to their safety?
Answer. The Army and the Program Manager for Chemical
Demilitarization (PMCD) believe that public outreach is essential to
accomplishing its mission and will continue to build upon the already
extensive outreach program that exists at each of the eight stockpile
sites. We engage the public through a strategic, targeted, and measured
approach to involvement and outreach. We have site teams and outreach
offices at each of the eight stockpile locations that are engaging the
public on a daily basis. Across all of the site locations, over 34,000
individuals have been reached in the past six months alone via targeted
outreach, presentations and public meetings with school, civic, and
community groups.
Anniston, Alabama, is a strong site example that highlights the
PMCD's outreach and involvement efforts. We have actively sought
partnerships with local elected officials and citizens' advisory
commissions (CACs), and have focused efforts on communities that have
expressed concern about the proposed facility. In the last six months,
we have had 26 local events, such as speakers' bureaus, that reached
well over 600 residents. Facility tours also help the community
understand the disposal project. In the past six months, 23 tour
opportunities have guided almost 600 residents through the facility
grounds.
As the demilitarization program progresses, we will continue these
efforts and increase targeted outreach to local schools and colleges,
businesses, and community civic groups. We will enhance already
developed targeted outreach programs to minority communities
particularly at sites with large African American, Hispanic, or Native
American populations. We continue to conduct spot surveys in the site
communities to gauge public sentiment and how the public wants
information about the disposal program.
In addition, we will continue to enhance existing partnerships with
CACs, the Chemical Stockpile Emergency Preparedness Program, the
Environmental Protection Agency, elected officials, and states and
local counties, which will provide opportunities to coordinate the
distribution of comprehensive information about chemical weapons
disposal plans.

EMERGENCY PREPAREDNESS

Question. Mr. Secretary, it is my understanding that Anniston's
March 2001 Chemical Stockpile Emergency Preparedness Program Exercise
was a failure. I am told that one of the primary causes was computer
software utilized by the emergency operations center. Do you believe
that this problem will be fixed? How can this Committee help?
Answer. The emergency management information system used at the
Anniston exercise meets Army requirements. However, it falls short of
meeting off-post requirements identified by state and local officials
at the eight stockpile sites. Some state and local emergency management
officials advocate using another software program, the Federal
Emergency Management Information System, to meet these requirements.
Accordingly, the Army is conducting an independent assessment of the
effectiveness, suitability, and reliability of both systems for meeting
on-post and off-post requirements. Once that assessment is completed,
the system then will be properly tested and reviewed to determine an
appropriate path forward. The Committee can help in this effort by
supporting the adoption of a single automation system as the most cost-
effective approach to meet on-post and off-post emergency management
requirements at all sites.

ALTERNATIVE TECHNOLOGIES

Question. Given the state of the program in Anniston, does a
faster, cheaper, and safer alternative exist to eliminate these
weapons?
Answer. No, the incineration facility being constructed at Anniston
represents the only proven systemized technology available now to
dispose of assembled chemical weapons. Incineration technology has been
demonstrated to safely and effectively destroy all of the chemical
agents and energetics, as well as completely treat contaminated metal
munition casings. The Army continues to track emerging technologies in
an attempt to identify alternatives to incineration that may be faster,
cheaper, and offer more protection.
The Anniston disposal facility is 99 percent complete and we are
scheduled to start agent operations in the third quarter of fiscal year
2002. It would take numerous years to develop the systems, design a
facility, obtain the requisite environmental permits, construct the
facility, and prove-out the alternative technology(ies). In that time
alone, using the incineration facility being constructed at Anniston,
we could eliminate 90 percent of the risk associated with the Anniston
stockpile. Incineration has been proven to be a safe technology as we
have completed the Johnston Atoll Chemical Agent Disposal System
mission and continue operations at the Tooele Chemical Agent Disposal
Facility.
Lessons learned from these facilities have been incorporated into
the facilities currently being built, continuing to add to the safety
of the Anniston facility and operations.
Question. What is your response to opponents of incineration who
would like to see the facility in Anniston retrofitted for alternative
technologies?
Answer. The Army's paramount objective during the storage and
destruction of chemical weapons is to provide maximum protection to the
public, the workers, and the environment. All risk analyses prepared to
date have shown continued storage poses the greatest threat to the
local community. The risks are dominated by external events such as
seismic events, lightning strikes, or tornadoes. While the possibility
of these events occurring are extremely remote, the consequences could
be severe. However, the Army is continuing to identify alternative
technologies that may be faster, cheaper and offer more protection. At
this time, pilot testing of an alternative technology would be
necessary since no alternative technology has been used in full-scale
operations. The construction of an alternative technology pilot-scale
facility would take at least 18 months from the time all permits were
received. In that time alone, by operating the incineration facility
being constructed at Anniston, 90 percent of the risk associated with
the Anniston stockpile would be eliminated. Retrofitting facilities
nearing completion will only increase risk to the public by delaying
the destruction of the stockpile. If at some point in the future, an
alternative technology is demonstrated to be appropriate for
consideration for retrofitting the Anniston facility, the local
community would be encouraged to participate in that decision.
______

Questions Submitted by Senator Daniel K. Inouye

CHEMICAL WEAPONS DISPOSAL: MEETING THE PROGRAM SCHEDULE

Question. The Department of Defense (DOD) Chemical Demilitarization
program has been the subject of many legal, environmental, and local
community concerns. What are the greatest challenges--legal,
environmental, financial--DOD must overcome in order to meet the
planned disposal schedule?
Answer. The Army faces a number of significant challenges as we
move forward with existing and planned operations to meet requirements
of public law and the Chemical Weapons Convention. It is imperative
that we maintain momentum and the full funding necessary to see the
projects mature through the systemization, operations, and closure
phases. We must determine technological paths forward for Pueblo and
Blue Grass, using sound science and frank dialogue, so we can proceed
with the destruction of those stockpiles. Personnel retention issues,
including the maintenance of the right skills mixture for government
and contractor employees, must be successfully addressed for these
relatively short-duration projects. We must successfully manage the
degradation of the stockpiles, which is an ongoing issue as the weapons
deteriorate with age, so we can continue to minimize risk to the
workers and the public. Environmental challenges involve receipt of
environmental permit modifications from regulatory agencies in a timely
manner so that operational schedules can be met and costs contained.
Also, the ability to expeditiously incorporate into operating
facilities any new standards and requirements mandated by new and/or
amended regulations is key to meeting program challenges. Finally,
developing and achieving approved closure standards, working with the
various stakeholders at all of our sites, to include state and local
governments, is a key program objective.
Question. The most recent report on the Department of Defense
chemical weapons activities notes that the legal actions have not
delayed disposal activities or construction. How have you been able to
address these legal challenges and stay on schedule? What gives the
Army confidence that it can continue to address future legal challenges
and stay on schedule?
Answer. The Army has been able to successfully address all legal
challenges. Those legal challenges have not affected the schedule for
several reasons. First and foremost is the fact that all sites
continually work diligently to comply with all environmental and safety
requirements. Second, in the situations where our regulatory compliance
is questioned, we stress safety and problem solving over production.
Third, the Department of Justice has done an outstanding job of
demonstrating our record of environmental and safety compliance before
judicial bodies.
The Army is confident it can continue to prevent schedule delays by
following this proven formula in the future. We are confident that we
will continue to address future legal challenges because it is the
Department's policy to comply with all applicable laws and regulations,
and because baseline incineration has proven to be a safe and effective
technology. Any schedule delays may be attributable to our meeting all
applicable laws and regulations, while stressing safety and problem
solving over production.
Question. There have been reports of chemical leaks at the Johnston
Atoll and Tooele (pronounced ``Too-elly'') facilities. How did these
leaks affect the program? Is there flexibility built into your plans to
account for unanticipated events like these? Can we dispose of chemical
weapons at a faster rate than we plan?
Answer. We have experienced a total of five chemical agent releases
at our Johnston Atoll Chemical Agent Disposal System (JACADS) and
Tooele Chemical Agent Disposal Facility (TOCDF) during the more than 15
years of operations destroying more than 7,000 tons of agent. These
releases have been so small that the agent dissipated to the point
where it could not be measured within a few feet from the point of
release. Independent investigations by groups such as the Centers for
Disease Control and Prevention have concluded that these minute
releases posed no threat to the public, the workforce, or the
environment. However, we take these releases very seriously. When such
an event occurs, it has been and continues to be our policy to suspend
operations to thoroughly investigate the cause. The purpose of the
investigation is to determine what happened and to develop corrective
actions to prevent the reoccurrence of the release. Once the corrective
actions are implemented, we include these improvements in our lessons
learned program, which requires these lessons learned be reviewed for
applicability at all of our other facilities. The corrective actions
can affect many aspects of our plant operations to include process
changes, facility changes, management changes, personnel hiring
practice changes, training changes, etc.
We plan for, but do not expect, these types of events to occur.
Because these events are not readily predictable, we have not included
any associated downtime in the schedules to accommodate such events. We
also believe that our lessons learned program has been very effective
in reducing these types of events. Our goal is to eliminate these
events.
We are working to identify ways to dispose of the chemical weapons
faster while ensuring that the safety of the workforce, the general
population, and protection of the environment remain our top priority.
Our challenge is addressing the number of new environmental
requirements that are placed on the program on a yearly basis and the
number of new issues. We are committed to meeting every new
environmental requirement while ensuring that we protect the public and
our workers. The program continues to strive to reduce schedule without
sacrificing safety or environmental compliance.
Question. Please comment on how we as a nation are doing in
disposing of chemical weapons compared to other countries?
Answer. Four parties to the Chemical Weapons Convention (CWC),
including the United States, have declared their chemical weapons
stockpiles. Jose Butsani, Director General of the Organization for the
Prohibition of Chemical Weapons, the administrative body of the CWC,
stated that ``three of the four declared possessors of chemical
weapons--with Russia the only exception--have complied with the first
CWC timeline for the destruction of their stocks of chemical weapons.
They have by now destroyed a total of 5,600 tons of chemical agent and
1.6 million of munitions and containers, or almost 20 percent of the
total declared quantity of such munitions and containers. The United
States, which has already destroyed almost one fifth of its chemical
weapons arsenal, has set an impressive example in this regard.''
The majority of the world's chemical weapons destroyed to date have
been from the U.S. stockpile. In addition, the United States facility
on Johnston Island was the first continuously operating chemical
weapons destruction facility that completed destruction of its
stockpile and was recently certified as closed via a letter from the
Organization for the Prohibition of Chemical Weapons dated April 25,
2001.
Russia, the possessor of the world's largest chemical weapons
stockpile, is still in the process of constructing destruction
facilities and has not yet begun destroying its chemical weapons
stockpile. It has also recently requested the five-year deadline
extension for destruction of its chemical weapons.

PUBLIC SAFETY--STORING CHEMICAL WEAPONS

Question. The Defense Department claims that the greatest risk to
the nation from our chemical stockpiles is the prolonged storage of
chemical weapons, and not the disposal of them. What is the greatest
threat to continued safe storage of these weapons--natural disasters,
leaky containers, theft, or other? Are there any sites in particular
about which you are most concerned?
Answer. Public risks of munitions storage are dominated by a class
of accidents or external events that result from influences external to
storage. In particular, the risks of accidents initiated from a seismic
event (i.e., earthquake), lightning strike, tornado, or aircraft crash
provide the greatest threat to continued safe storage of chemical
munitions. The risk values vary substantially among sites due to the
population differences around the sites, the mix of munitions that are
stored at the sites, and the site-specific weather. In general, the
storage risks at the eastern storage sites are dominated by lightning
induced accidents, and earthquakes dominate the risks at the western
sites. Because of the high storage risk from lightning (predominantly
based on the risk of ignition of the M55 rockets) the Army has taken
steps to evaluate and reduce this vulnerability. Research in this area
accounts for new bonding procedures within the igloos to reduce the
threat of lightning induced rocket ignition, and new testing has been
initiated that has characterized the specific vulnerability of each
individual rocket storage igloo. These test results have led the Army
to a better understanding of the susceptibility of the igloos to
lightning, allowing it to continue to pursue efforts to reduce this
risk where possible. However, it is unlikely that the risk posed by
lightning will ever be eliminated and will likely continue to dominate
storage risks at our eastern sites. Likewise, the risks associated with
earthquakes at our western storage sites cannot be entirely eliminated.
Activities related to normal maintenance of the stockpile account
for less than one percent of the public risk. Agent leakage is a
minimal public risk because of the typically small amounts of agent
involved, as well as the containment afforded by the storage structure.
There is, however, a risk to storage site workers that must deal with
these leaking munitions. To combat these risks, the Army maintains
strict personnel safety and procedural standards, which have proved
successful in protecting our people over the years.
Overall, the M55 rocket is the highest-risk munition in storage. In
addition to its susceptibility to lightning-induced ignition, they pose
a higher degree of deterioration and leakage than other munitions.
Theft and terrorist activities are possible, but are not considered
to be the greatest threat to continued storage and are not modeled in
the risk assessments for each site.
There is no one site that exhibits a far greater concern than
another. Each site has a unique set of circumstances that gives it a
different, but real vulnerability. There is no site that escapes the
Army's concern for prolonged storage.
Question. Are you concerned that our storage facilities and
containers will begin to fail before we can dispose of all chemical
agents?
Answer. Since our storage facilities are in good shape, we are not
concerned that our storage facilities and containers will begin to fail
before all chemical agents and munitions are destroyed if we continue
to meet our destruction schedule. We believe we can continue to protect
the general public from the risks of significant releases until the
stockpile is completely destroyed. The maintenance of an aging
stockpile requires intense management. Even though we have had an
exemplary safety record in maintaining our stockpile, our goal is to
eliminate the stockpile as quickly as possible to lessen the risk of
exposure to our workers due to the need for continual handling and
repacking.
Agent detection technology has improved significantly, allowing
early detection of leaks. Leaks do continue to occur in overpack
containers. During fiscal year 2000, 98 overpacks storing chemical
munitions leaked. Each leaking overpack container was packed in a
secondary overpack container. Since 1975, approximately 3,084 leaking
munitions have been containerized. Many of these are in aging overpacks
that still remain in storage. (Note: approximately 503 overpacks have
leaked since then).
New container procurement will address leakage permanently, pending
munitions disposal. The Army has a production and fielding plan for new
containers for overpacking leaking munitions based on the historical
tendency for items to fail or leak. In other words, propelling charge
containers tend to leak more frequently than other overpacks, so the
Army has manufactured new high-performance containers or modified
existing containers to address this condition.
On the other hand, Spray Tank containers, Wet Eye Bomb containers,
and Bull Pup containers have never leaked. The Army has not designated
or tested containers for this purpose. These items are stored at
locations where disposal operations are underway or are imminent and
the potential for failure is minimal.
The Army has also fielded a portable helium leak tester to allow
workers to selectively identify and eliminate poor performing
containers that could otherwise fail after packaging but prior to
disposal.
Question. Please provide the Committee with a status report on the
Army's efforts to protect these chemical weapons facilities from
terrorist threats.
Answer. The chemical weapons facilities, which the Army is
responsible for, are protected from terrorist threats by the
administration of an ongoing comprehensive chemical security program
that is an integral part of the Army's Chemical Surety mission.
Implementation of the Army's chemical security program is monitored on
a continuing basis by security elements of the U.S. Army Soldier and
Biological Chemical Command (SBCCOM), the Army Materiel Command, and
the Department of the Army Inspector General.
In addition to the chemical security program, SBCCOM administers a
proactive antiterrorism/force protection program, which implements
specific Army guidelines for the protection of facilities against
terrorist threats.
Finally, within SBCCOM, the chemical depots and activities share
classified threat information by means of a secure, automated
Intelligence and Threat Dissemination System (ITDS). The ITDS is a
stand-alone secure wide area network that was developed and fielded by
SBCCOM and is administered from SBCCOM headquarters. The secure system
provides SBCCOM commanders and directors a real-time, secure command
network with the capability for receiving the most current classified
threat information, requesting specific threat data or intelligence
reports, and sharing local threat situations and information with other
SBCCOM installations and activities.

ALTERNATIVE TECHNOLOGIES

Question. The Department of Defense (DOD) is required to test
alternatives to the current system of incinerating chemical weapons. Do
we know of or have we tested any alternative technologies that are as
safe, effective, and cost efficient as the current system?
Answer. DOD has completed the demonstration of six alternative
technologies to the baseline incineration. Four of these technologies
were successfully demonstrated and found to be possible candidates to
proceed to pilot testing. As required by Public Law 105-261, DOD is
assessing whether these alternative technologies can be certified to be
as safe and cost- and schedule-effective as the incineration process.
DOD is also assessing whether any of these alternative technologies
should be pilot tested and if so, where. These related assessments are
being conducted through a Defense Acquisition Executive review. The
initial Defense Acquisition Executive review is scheduled to be
completed in the fall of 2001, with a technology decision expected in
the fall of 2001 for the Pueblo, Colorado, site and the third quarter
of fiscal year 2002 for the Blue Grass, Kentucky, site.
Question. What do you estimate to be the total costs to complete
testing of all alternative technologies under consideration? When do
you expect to complete this testing?
Answer. The cost to complete the six technology demonstrations was
$99,725,000. The follow-on engineering design studies (phases I and II)
to determine if these technologies are suitable for certification under
Public Law 105-261 is estimated to be $113,878,000. The two
demonstration programs were completed in May 1999 and October 2000,
respectively. The engineering design study phase I will be completed in
October 2001 and the phase II will be completed in November 2001. The
technology decision for Pueblo, Colorado, will be complete in the fall
of this year and the decision for Blue Grass, Kentucky, is expected in
the third quarter of fiscal year 2002.

JOHNSTON ISLAND: COMPLETING CHEMICAL WEAPONS DISPOSAL

Question. Congress has received reports that the chemical weapons
disposal operations at Johnston Atoll are now complete. This is in fact
the case, is it not?
Answer. The Program Manager for Chemical Demilitarization has
completed stockpile destruction operations at the Johnston Atoll
Chemical Agent Disposal System (JACADS). More than 412,732 munitions
and bulk items were safely destroyed at the facility (over 2,000 tons
of agent). Treaty oversight by the Organization for the Prohibition of
Chemical Weapons ended in January 2001 and was certified complete on
April 25, 2001. The environmental permit required a final closure plan
that was submitted to the Environmental Protection Agency in July 2000,
and the Army is coordinating with several federal oversight agencies
for closure of the JACADS facility.
Question. Please describe what other chemical warfare materiel
remain on Johnston Island and how and when the Army intends to dispose
of these?
Answer. There are currently 62 Chemical Agent Identification Sets
(CAIS) stored on Johnston Island. A class 2 Resource Conservation and
Recovery Act permit modification request has been submitted to the
Environmental Protection Agency to incinerate the CAIS in Johnston
Atoll Chemical Agent Disposal System. Following approval of the
modification, disposal of these CAIS is scheduled for September 2001.
Question. What chemical warfare materials remain at other sites in
the Pacific? What is the Army's plan for dealing with these materials?
Answer. There are a number of additional sites in the Pacific
theater where chemical materiel may be recovered. These sites are
addressed in a classified annex to the 1993 Survey and Analysis Report
and a 1996 update. There were a number of locations in the Pacific
where chemical weapons were stored and tested. The United States did
not abandon any chemical weapons at these sites; however, some may be
recovered as the result of legitimate disposal or testing actions
conducted during World War II. There was also extensive training with
Chemical Agent Identification Sets (CAIS), which may be found at any
World War II training site. CAIS are vials and bottles that contain
small amounts of actual chemical agent. Complete CAIS sets can contain
amounts similar to munitions, but do not have explosives associated
with them.
In the event chemical warfare materiel is recovered, these items
would likely be CAIS or chemical weapons from previous chemical weapons
testing, storage, and disposal. Possible approaches to destruction of
chemical items, when discovered, will involve evaluating whether they
should be destroyed on-site, moved to a collection point and destroyed,
or moved back to the United States or a U.S. territory for eventual
destruction. If on-site destruction is elected, the Army would consider
use of the Rapid Response System (RRS) for CAIS and the Explosive
Destruction System (EDS) for munitions. Other systems are being
developed and tested as part of the Army's Non-Stockpile Program to
address this problem in the future, but the RRS and EDS are available
now.
Possible movement of recovered chemical items would be subject to a
destination analysis. This analysis would recommend movement to either
a site where the mobile systems could be more effectively used or where
an existing demilitarization system could deal with the problem. Such
an analysis would be done on a case-by-case basis, and would require
approval of the receiving site. Site approval would require all
necessary approvals from regulatory agencies, including local, State,
territorial, and federal agencies.
Question. If, in the future, you find non-stockpile chemical
materials in the Pacific theater, where will you dispose of these? Are
there environmental and legal issues associated with handling and
transporting chemical warfare items you uncover in the future?
Answer. The potential exists to recover additional chemical warfare
materiel (CWM) from numerous sites in the Pacific, from both U.S.
territories and foreign sites similar to those items recovered from the
Solomon Islands, Guam, and Tuvalu Funa Futi in the 1990's. The product
manager for Non-Stockpile Chemical Materiel has developed a destination
analysis in coordination with the Department of the Army and the
Department of Health and Human Services to assist decision makers in
determining the disposition of recovered CWM. When CWM is recovered, we
have three options for handling it: storage on-site for future on-site
treatment; storage on-site until an acceptable alternative storage and/
or treatment location can be found; and immediate transportation to an
acceptable off-site location for storage and/or treatment.
Our preference is to treat and dispose of recovered CWM on-site.
However, numerous public, environmental, and legal issues will apply to
all recoveries in the Pacific theater. Any recovered CWM brought into
the United States from a foreign country will be subject to the
applicable provisions of environmental regulations and laws to include,
but not limited to, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act,
and Title 50 of the United States Code.
Some of these issues are public health and safety risks associated
with storage, treatment, and transportation. Additionally, the
legislative constraints of 50 United States Code 1512a(b) on the
movement of recovered CWM apply. Specifically, in the case of any
chemical munitions that are discovered or otherwise come within the
control of the DOD and that do not constitute part of the chemical
weapons stockpile, the Secretary of Defense may transport such
munitions to the nearest chemical munitions stockpile storage facility
that has the necessary permits for receiving and storing such items if
the transportation of such munitions to that facility is considered by
the Secretary of Defense to be necessary; and can be accomplished while
protecting public health and safety.

CLOSING JOHNSTON ATOLL CHEMICAL AGENT DISPOSAL SYSTEM (JACADS)

Question. In your testimony, the Army plans call for completely
closing the Johnston Island facility by the fourth quarter of fiscal
year 2003. Yet in a briefing received by the committee staff just two
weeks ago, the plan at that time was to close the facility by the
fourth quarter of 2002. Why has the plan changed? Do you foresee any
problems with meeting the new date?
Answer. Completion of all Johnston Atoll Chemical Agent Disposal
System (JACADS) closure activities are scheduled for September 2003.
This closure plan was issued to the Environmental Protection Agency in
July 2000 and has remained unchanged since that date. After five months
of actual JACADS closure activity, the project is on schedule for a
September 2003 completion.
Question. What are the key events that must occur before JACADS can
be completely closed? Are there environmental issues that remain?
Answer. Closure activities, which began in January 2001, are
approximately 10 percent complete. These activities include disposal of
contaminated materials, including all secondary wastes, such as
contaminated plastic suits and charcoal. Other activities include
decontamination of the building and related equipment, dismantling
equipment and putting it in a furnace for thermal treatment, verifying
``clean closure'' of materials and structures that will remain in
place, and defining the future use of the site that is acceptable to
all stakeholders, including the U.S. Fish and Wildlife Service.
Question. What are the plans for disposing of the facilities? For
example, what do you plan to do with the incinerator?
Answer. Machinery, conduit, conveyors, wall sandwich panels,
scabbled concrete, etc. will be processed through the metal parts
furnace (MPF). The deactivation furnace system and liquid incinerator
will be taken apart and processed through the MPF. The MPF will be
decontaminated to an agent free standard and shipped to a continental
United States hazardous waste disposal site.
Question. What are the costs of closing the facility?
Answer. The Johnston Atoll Chemical Agent Disposal System (JACADS)
closure costs are expected to be about $400 million. The closure costs
for sites in the continental United States are expected to be less than
Johnston Atoll. Three key contributors to the JACADS closure costs are
labor, regional cost differences, and the processing of secondary
wastes during closure activities.

MANAGING THE CHEMICAL DEMILITARIZATION PROGRAM

Question. Congress has received reports that state and local
officials often get mixed messages about the Chemical Demilitarization
program because of multiple lines of authority and responsibility for
the program. Is the Army aware of this criticism and, if so, how does
it plan to address the issue?
Answer. Yes, this issue was addressed in the May 2000 General
Accounting Office Report. The Army is sensitive to the concerns
expressed by state and local officials who are seeking clear and
consistent information about the Chemical Demilitarization program. The
program managers for Chemical Demilitarization and Assembled Chemical
Weapons Assessment co-chair working integrated product team reviews and
are working very closely in the development of the required
environmental documentation to support the technology decisions for
both the Colorado and Kentucky sites.
In addition, the Department of Defense is conducting a Defense
Acquisition Executive Review of the Chemical Demilitarization Program
in the fall of this year. One of the issues that will be addressed at
this review includes the formalization of a plan that integrates roles
and responsibilities of the Program Manager for Chemical
Demilitarization and the Program Manager for Assembled Chemical Weapons
Assessment. Such a plan should assist in the future dissemination of
clear and consistent messages about the chemical demilitarization
program. However, it should be noted that the management structure of
the Chemical Demilitarization program has been shaped largely by
statute and that further streamlining of roles and responsibilities may
require changes in public law.
Question. Has restructuring the Chemical Demilitarization program
been an issue in Secretary Rumsfeld's Strategic Review?
Answer. No. However, a Defense Acquisition Executive Review,
scheduled for the fall of this year, is evaluating all aspects of the
Chemical Demilitarization Program. This review will include the
Chemical Stockpile Disposal Project (CSDP), Chemical Stockpile
Emergency Preparedness Program, Alternative Technologies and Approaches
Project, Non-Stockpile Chemical Materiel Program, and Assembled
Chemical Weapons Assessment Program. The issues being addressed include
Chemical Weapons Convention compliance, update of the Life Cycle cost
estimate, update of program plans for closure of the CSDP facilities,
and the path forward to implement a destruction method for the chemical
stockpile sites in Pueblo, Colorado and Blue Grass, Kentucky.
______

Questions Submitted to James Bacon

Questions Submitted by Senator Thad Cochran

ALTERNATIVE DESTRUCTION TECHNOLOGIES

Question. Given both the technical problems and poor public
perception of incineration, and given the technical problems of the
alternatives looked at by the Army, such as the Plasma or the Bio
Process, do you think the Army should explore closed systems which
provide a viable alternative to incinerators?
Answer. The Army has been looking at closed or ``batch'' systems
where agent destruction to a non-detectable level can be confirmed in
the reaction mixture before it is discharged to provide a viable
alternative to incineration at bulk agent storage sites. In 1994, the
Office of the Project Manager for Alternative Technologies and
Approaches was organized to perform research and development of
chemical neutralization technology at the two bulk agent storage sites
(Aberdeen, Maryland, and Newport, Indiana). Bulk agents are stored in
steel containers called ton containers. Thus, there is no requirement
to handle explosives, energetics, or munitions. In January 1997, the
Defense Acquisition Executive authorized the Army to proceed with a
program to establish full-scale pilot plants at these locations.
Efforts at the Aberdeen site began in October 1998 with award of a
systems contract to Bechtel National, Incorporated. Efforts at the
Newport site began in February 1998 with a systems contract award to
Parsons/Allied Signal (now Honeywell). Design completion and
construction are ongoing concurrently for both sites. The technology
employed at the Aberdeen site is chemical neutralization follow by
biodegradation. The technology employed at the Newport site is chemical
neutralization followed by supercritical water oxidation.
Question. I understand that the Adams Process is a closed system,
which is being researched at the Diagnostic Instrumentation Analysis
Laboratory (DIAL) Lab at Mississippi State University, and it provides
more reliable destruction of chemical agents and mixed wastes. Are you
exploring this alternative?
Answer. This technology has been evaluated according to the
procedures and criteria used to monitor the development of emerging
technologies to support the chemical demilitarization program.
The Adams Process reacts organic compounds with elemental sulfur,
either in a vapor phase or liquid phase at temperatures ranging from
275 to 280 degrees Fahrenheit. Higher temperatures may be present in
the vapor phase.
The Army performed lab-scale tests of the Adams Sulfur Process in
1993 to investigate the destruction of energetics. In addition, the
Army performed limited testing with dilute mustard at Pine Bluff
Arsenal, Arkansas, in 1995.
Based on the small-scale work performed to date, the Adams Process
does not appear to offer benefits over other alternatives that have
already been tested for the destruction of agents and energetics that
are ready for pilot testing.
______

Questions Submitted by Senator Arlen Specter

RISK OF CONTINUED STORAGE

Question. Explain the differences in the risk of continued storage
versus the risk of destroying the weapons now.
Answer. Storage risk is higher primarily because of the potential
for external events, such as earthquakes, tornadoes, lightning strikes,
and plane crashes to compromise the integrity of the stockpile. Events
affecting storage have the potential to involve large amounts of agent,
for example an entire igloo could be affected. These types of accident
scenarios are low frequency events, but have significant consequences
to the public due to the release of large quantities of agent to the
environment. In addition, the degradation of the chemical agent
stockpile requires intense management that results in significant
manual handling of the munitions, thus exposing our workers to the risk
of agent exposure.
The disposal facilities are exposed to the same external events
that the storage area is exposed to, but there are limited munitions in
the process at any time so the potential agent releases are limited.
The disposal process is carried out in a facility with multiple layers
of protection to prevent agent release to the environment. The disposal
facilities have also been designed and built to minimize the effects of
external forces, such as tornadoes and earthquakes. The Program Manager
for Chemical Demilitarization has conducted and continues to conduct
risk assessments to understand and minimize the risks of storage and
processing. The risk decreases with each round and agent container
destroyed. Both an independent panel of experts (which included local
risk experts) and the National Academy of Science's National Research
Council have and continue to rigorously oversee the risk assessment
processes. The information from these assessments is the driving force
behind the demilitarization program and its goal to eliminate this risk
by destroying the source--the chemical weapons stockpile.

COST SAVINGS

Question. Has the program realized any cost savings through
innovation or the use of better business practices during its life
cycle?
Answer. While the program has not realized any true cost savings,
the program manager has undertaken many management initiatives to
contain program costs through innovative or better business practices.
For example, the aggressive lessons learned program has helped to avoid
schedule and cost growth for the Chemical Stockpile Disposal Project.
Similarly, the Non-Stockpile Chemical Materiel Product has controlled
costs by employing alternative solutions to address mission
requirements, for example, the early destruction (fiscal year 1999
versus fiscal year 2006) of binary M-687 projectiles, thus avoiding
inflation cost increases.

MEETING THE PROGRAM SCHEDULE

Question. Where do you stand in terms of compliance with the
Chemical Weapons Convention (CWC) and will you meet the next milestone
in April 2002?
Answer. The program continues to meet or exceed requirements of the
CWC. By April 29, 2000, we are required to have destroyed one percent
of our Category 1 chemical weapons that were declared at the time of
the treaty's entry into force. By that date, we will have well exceeded
that milestone, having destroyed over 15 percent of those weapons. To
date, the United States has destroyed approximately 19.7 percent of the
Category 1 chemical weapons (CW) since the CWC entered into force. The
Category 1 phase 1 deadline requires at least 20 percent destruction no
later than April 29, 2002. It is expected that the United States will
have safely destroyed 20 percent of Category 1 CW by the end of fiscal
year 2001, well ahead of schedule.
For Category 3 CW, 100 percent destruction is required by April 29,
2002. Category 3 CW are unfilled munitions or components that were
designed for use directly in connection with the employment of chemical
weapons. Presently, 99 percent of the Category 3 CW have been
destroyed, and the remainder are on target for destruction by 2002.
Destruction of 40 percent of the production capacity of former chemical
weapons production facilities is also required by April 29, 2002. This
milestone was met in March 2000.
______

Questions Submitted by Senator Richard C. Shelby

EMERGENCY PREPAREDNESS

Question. Has the Army changed its objective from ``zero exposure''
to ``zero fatalities?''
Answer. The Program Manager for Chemical Demilitarization has
always maintained the goals of zero release--zero exposure during
chemical weapons disposal operations. However, recognizing the low
probability for agent release will continue as long as the chemical
weapons remain in storage, the Army and Federal Emergency Management
Agency jointly manage the Chemical Stockpile Emergency Preparedness
Program (CSEPP) in coordination with state and local officials. The
Army has consistently followed the same objective for the protection of
the general public from a chemical agent accident since 1991. This
objective is defined in CSEPP Policy Paper Number 1, dated May 1991,
which was developed jointly by the Army, the Federal Emergency
Management Agency and the ten CSEPP states. Policy Paper 1 states that
the most important objective is the avoidance of fatalities to the
maximum extent practicable. CSEPP achieves this objective through
protective actions that protect the public from exposure to chemical
agents to the maximum extent practicable.
Question. Does the Army believe that people will be exposed to
chemical agents?
Answer. The Army does not believe that people will be exposed to
chemical agent, either from storage activities or from chemical
demilitarization operations. First, the probability of a chemical
weapons accident that could put the public at risk is extremely low.
Second, the Army and the Federal Emergency Management Agency are
working with state and local emergency management officials to enhance
their emergency response capabilities. Improving emergency response
capabilities further reduces the risk of exposure to chemical agents
and protects the public from exposure to the maximum extent possible.

MEDICAL STUDIES

Question. What medical studies or data can you share with this
committee regarding the long-term health impacts of non-lethal exposure
to chemical agents?
Answer. A number of studies have been published on the long-term
health effects of non-lethal exposure to nerve and mustard chemical
agents. Some of those studies are listed below.
1. Baker, DJ and Sedgwick, EM 1996. Single fiber electromyographic
changes in man after organophosphate exposure. Human and Experimental
Toxicology. Volume 15, 369-375.
2. Beebe, GW 1960. Lung Cancer in World War I Veterans: possible
relation to mustard gas injury and 1918 influenza epidemic. J. Natl.
Cancer Inst. 25:1231-1252.
3. Case RAM and Lea, AJ, 1955. Mustard gas poisoning, chronic
bronchitis and lung cancer. An investigation into the possibility that
poisoning by mustard gas in the 1914-1918 war might be a factor in the
production of neoplasia. Brit J. Prev Med. 9:62-72.
4. Duffy, F.H, Burchfiel, J.L. 1979. Long term effects of an
organophosphate upon the human electroencephalogram. Toxicol Appl
Pharm, Volume 47, pages 161-176.
5. Grob D, 1956a. Manifestations and Treatment of Nerve Gas
Poisoning in Man. U.S. Armed Forces Med J, Volume 7, pages 781-789.
6. Grob D, 1956b. The Manifestations and Treatment Due to Nerve
Gases and Other Organic Phosphate Anticholinesterase Compounds. Arch
Intern Med, Volume 98 pages 221-239.
7. Grob D and Harvey AM. Effects and Treatment of Nerve Gas
Poisoning, Am J Med, Volume 14, pages 5263-67.
8. Harvey, JC. 1952. Clinical observations on volunteers exposed to
concentrations of GB. Medical Laboratories Research Report Number 114,
Publication Control Number 5039-114 (CMLRE-ME-52), MLCR 114 Army
Chemical Center, Aberdeen Proving Ground, MD.
9. IOM (Institute of Medicine, Committee to Survey the Health
Effects of Mustard Gas and Lewisite, Division of Health Promotion and
Disease Prevention). 1993, Veterans at Risk: The Health Effects of
Mustard Gas and Lewisite, C.M. Pechura and DP Rall, eds. National
Academy Press, Washington, D.C.
10. Lekov D, Dimitrov V, and Mizkow A. Clinical observations of
individuals contaminated by a pinacolic ester of methylfluorophosphine
acid (soman). Voenno Meditsinsko Delo, 4, 47, 1966.
11. Inoue, N. Psychiatric symptoms following accidental exposure to
sarin: A case study. Fukuokaishi Igaku Zasshi, 86, 373, 1995.
12. Nakajima T, Ohta S, Morita H, Midorikawa Y, Mimura S, et al.
Epidemiological study of sarin poisoning in Matsumoto City, Japan, J.
Epidemiol, 8, 33, 1997.
13. Nozaki H, Aikawa N, et al. A case of VX poisoning and the
difference from sarin. Lancet, 346, 698, 1995.
14. NRC (National Research Council), Possible Long-Term Health
Effects of Short-term Exposures to Chemical Agents. Volume 1.
Anticholinesterases and Anticholinergics, National Academy Press,
Washington, D.C., 1982.
15. NRC (National Research Council), Possible Long-Term Health
Effects of Short-term Exposures to Chemical Agents. Volume 3, Final
Report, Current Health Status of Test Subjects, National Academy Press,
Washington D.C., 1995.
16. Papirmeister B, Feister AJ, et al. Medical Defense Against
Mustard Gas: Toxic Mechanisms and Pharmocological Implications. CRC
Press, Boca Raton, FL., Page 359.
17. Sidell, FR and Groff, WA. The reactivity of Cholinesterase
inhibited by VX and Sarin in Man. Toxicol Appl Pharm, Vol 27, pages
241-252 (1974).
18. Somani S, and Romano J, eds. Chemical Warfare Agents:
toxicology at low levels. CRC Press, LLC, 2001.
19. Taher, AA. 1992. Cleft lip and palate in Tehran. Cleft Palate
Craniofacial Journal 29:15-16.
20. Wiedler DJ. Myocardial damage and cardiac arrythmia's after
intracranial hemhorrage, a critical review. Stroke, Volume 5, 759-64,
1979. Weimer J.T, McNamara BP, et al. Proposed Revision of Limits for
Human Exposure to GB Vapor in Nonmilitary Operations Based on One-Year
Exposures of Laboratory Animals to Low Airborne Concentrations. ARCSL-
TR-78056, Chemical Systems Laboratory, Aberdeen Proving Ground, MD,
December 1979.

ALTERNATIVE TECHNOLOGIES

Question. Given the state of the program in Anniston does a faster,
cheaper and safer alternative exist to eliminate these weapons?
Answer. No, the incineration facility being constructed at Anniston
represents the only proven systemized technology available now to
dispose of assembled chemical weapons. Incineration technology has been
demonstrated to safely and effectively destroy all of the chemical
agents and energetics, as well as completely treat contaminated metal
munition casings. The Army continues to track emerging technologies in
an attempt to identify alternatives to incineration that may be faster,
cheaper, and offer more protection.
The Anniston disposal facility is 99 percent complete and we are
scheduled to start agent operations in the third quarter of fiscal year
2002. It would take numerous years to develop the systems, design a
facility, obtain the requisite environmental permits, construct the
facility, and prove-out the alternative technology(ies). In that time
alone, using the incineration facility being constructed at Anniston,
we could eliminate 90 percent of the risk associated with the Anniston
stockpile. Incineration has been proven to be a safe technology as we
have completed the Johnston Atoll Chemical Agent Disposal System
mission and continue operations at the Tooele Chemical Agent Disposal
Facility.
Lessons learned from these facilities have been incorporated into
the facilities currently being built, continuing to add to the safety
of the Anniston facility and operations.
Question. What is your response to opponents of incineration who
would like to see the facility in Anniston retrofitted for alternative
technologies?
Answer. The Army's paramount objective during the storage and
destruction of chemical weapons is to provide maximum protection to the
public, the workers, and the environment. All risk analyses prepared to
date have shown continued storage poses the greatest threat to the
local community. The risks are dominated by external events such as
seismic events, lightning strikes, or tornadoes. While the possibility
of these events occurring are extremely remote, the consequences could
be severe. However, the Army is continuing to identify alternative
technologies that may be faster, cheaper, and offer more protection. At
this time, pilot testing of an alternative technology would be
necessary since no alternative technology has been used in full-scale
operations. The construction of an alternative technology pilot-scale
facility would take at least 18 months from the time all permits were
received. In that time alone, by operating the incineration facility
being constructed at Anniston, 90 percent of the risk associated with
the Anniston stockpile would be eliminated. Retrofitting facilities
nearing completion will only increase risk to the public by delaying
the destruction of the stockpile. If at some point in the future, an
alternative technology is demonstrated to be appropriate for
consideration for retrofitting the Anniston facility, the local
community would be encouraged to participate in that decision.
______

Questions Submitted to Mike Parker

Questions Submitted by Senator Arlen Specter

ASSEMBLED CHEMICAL WEAPONS ASSESSMENT (ACWA) TECHNOLOGY

Question. In order for an ACWA technology to go to pilot testing,
ACWA must certify its technologies are as safe as and as cost effective
as incineration, and that weapons will be destroyed on or before
incineration or CWC deadline, whichever is later. What have the Arthur
Andersen, General Accounting Office, and National Resource Council
(NRC) reports concluded about ACWA's ability to meet these criteria?
Will you meet the cost considerations? Will you meet the treaty or
incineration schedule deadlines?
Answer. The scope of the Arthur Andersen, Government Accounting
Office, and the NRC efforts were focused on other program needs and
Congressional objectives rather than a comparison of the technologies
per the requirements of Public Law 105-261. The NRC's report, which is
technology focused, will be included in the Defense Acquisition
Executive review process that will be completed this calendar year. The
NRC report will be published in July 2001.
One of the objectives of this Defense Acquisition review will be a
side-by-side comparison of the alternative technologies and the
incineration-based technologies per Public Law 105-261. Given that the
plants for either technology approach will be about the same size with
a similar workforce and operations period, and they will be using
similar equipment to separate the energetic and agent components from
the munitions, their cost, schedule, and safety will be roughly equal.
Question. Are any ACWA technologies ready to go to the pilot-
testing phase? If so, which ones and on what date will this occur?
Answer. Four successfully demonstrated alternative technologies
have been determined to be possible candidates for pilot testing. The
ongoing Defense Acquisition Executive review process will determine if
any of these technologies should be piloted consistent with Public Law
105-261, and if so, where. The Defense Acquisition Executive's initial
decision regarding pilot testing of ACWA technologies is scheduled to
be made in the first quarter of fiscal year 2002. The technology
decisions for Pueblo, Colorado, and Blue Grass, Kentucky, are scheduled
to be made in the first quarter of fiscal year 2002 and the third
quarter of fiscal year 2002, respectively, and will consider
construction of full-scale ACWA technology disposal facilities to be
operated initially at the pilot-scale, as alternatives.
Question. ACWA technologies engineering design studies are to be
completed in July 2001. Can you assure the committee that these reports
will be complete and final at that date?
Answer. The Engineering Design Study Phase I testing will be
completed in October 2001. The test reports will be available within
six weeks of completing testing. The Engineering Design Study Phase II
testing will be completed in November 2001 with the reports finalized
six weeks later.
______

Questions Submitted by Senator Richard C. Shelby

ALTERNATIVE TECHNOLOGIES

Question. Given the state of the program in Anniston does a faster,
cheaper and safer alternative exist to eliminate these weapons?
Answer. Hard facts to answer this question are yet to be developed.
One objective of the Defense Acquisition Executive review is to compare
the alternative technologies' cost, schedule, and safety with the
baseline incineration process and determine if an alternative should be
piloted and where. If one or more alternative technologies were
successfully piloted, an engineering analysis to determine the
practical feasibility of retrofitting an alternative technology to the
Anniston facility would need to be completed along with the cost,
schedule, and safety implications of retrofit to address these issues.
Once this information is available, there would need to be a comparison
with the updated baseline facility operating and cost schedule using
the operating experience at the Johnston Atoll Chemical Agent Disposal
System and the Tooele Chemical Agent Disposal Facility to determine the
life cycle cost and schedule implication of an alternative technology
applied at Anniston.
Question. What is your response to opponents of incineration who
would like to see the facility in Anniston retrofitted for alternative
technologies?
Answer. Safety is the paramount issue with chemical weapons storage
and disposal. The most significant risk to the local population at a
site would be a weapons in storage accident. While the probability is
very, very small that any accident will occur, the accident that could
effect the off-installation population would be due to a natural event
such as an earthquake or lightning strike. Given that natural events
such as these could occur at any given time, then the timeline for
disposal drives the safety risk. Shortest time for disposal is the
lowest risk. The time to dispose of chemical weapons based on the
actual experience at Johnston Island and at Tooele would need to be
compared to the time line to retrofit to an alternative technology that
may dispose of the weapons more efficiently. If one or more alternative
technologies were successfully piloted, an engineering analysis to
determine the practical feasibility of retrofitting an alternative
technology to the Anniston facility would need to be completed along
with the cost, schedule, and safety implications of retrofit to address
these issues. The answers would need to be developed in a totally
transparent manner that assures your constituents that they have all of
the unvarnished facts to obtain community buy in on what ever the right
course of action is.

NONDEPARTMENTAL WITNESSES

Senator Inouye. Now our second panel will consist of Mr.
Russell Salter from FEMA and representatives from the Blue
Grass and Anniston areas. Representing the Chemical Weapons
Working Group is Mr. Craig Williams. From Anniston are Mr.
Rufus Kinney and Ms. Brenda Lindell of Families Concerned About
Nerve Gas Incineration; and Eli Henderson, former commissioner
of Calhoun County.
Pursuant to the instructions of the chairman, I now
relinquish the chair to Senator Shelby. You are in charge,
Senator.
Senator Shelby [presiding]. Thank you.
All of your written statements will be made part of the
record without objection. If we could, because of the
constraints of time, would you briefly sum up your remarks and
that will give us some time for some questions and a little
dialogue with you.
We will start with Mr. Russell Salter. Mr. Salter.

STATEMENT OF RUSSELL SALTER, DIRECTOR, CHEMICAL AND
RADIOLOGICAL PREPAREDNESS DIVISION, FEDERAL
EMERGENCY MANAGEMENT AGENCY

Mr. Salter. Thank you, Mr. Chairman. Mr. Chairman and
members of the subcommittee, I am Russell Salter, Director of
FEMA's Chemical and Radiological Preparedness Division at FEMA.
Since August of 1997, I have served as the agency's national
program manager for the chemical stockpile emergency
preparedness program.
I am pleased to be here today on behalf of FEMA and on
behalf of Director Joe Albaugh. I am here at your request to
answer any questions that you may have about our national CSEPP
program or those concerning the safety of communities in and
around any of the particular sites. I have provided the
committee a more detailed written statement that discusses
CSEPP from a national perspective.
Since the focus of this hearing is on chemical
demilitarization, my brief comments today will address the
status of public protection in the CSEPP communities in both
Kentucky and in Alabama, information that I believe is
relevant, Mr. Chairman, because of the relationship that exists
between chemical storage and destruction and protection of the
public.
In late March I provided the committee a status report that
presented each State's assessment of their level of
preparedness for a CSEPP emergency. Most of the communities in
the report indicated that they had completed or were well on
their way toward completing and maintaining all 12 of the
benchmarks that had been established for determining readiness
in the communities.
Kentucky's self-assessment indicated that all but two of
their benchmarks were essentially complete. This means they
have the ability to alert the population, State and local
response and emergency management staff can effectively
communicate in order to guide the protective action process,
plans and equipment are in place, and operations centers are
equipped to handle a CSEPP emergency.
According to Kentucky's assessment, the two significant
items that remain are the need for more public awareness so
they can be assured that the local citizens know what to do in
an emergency; and, secondly, greater emphasis on training to
make up for some shortfalls over the past year. We applaud the
hard work that the State has done, and the county personnel as
well, to provide this level of preparedness.
In the most recent report, Alabama's self-assessment, which
includes six counties in and around the Anniston Chemical
Depot, reported that only 4 of their 12 benchmarks are
complete. We cannot agree with this assessment, Mr. Chairman.
Since the beginning of the CSEPP program, we have awarded the
State of Alabama more than $118 million for public protection.
These funds have provided a robust alert and notification
system, mobile communication radios, plans, state of the art
emergency operations centers, automation support, and
substantial funding for collective protection.
We do recognize that work remains to be done and we feel
that the States and counties need to aggressively work toward
completion of all of those remaining projects which we have
funded. Meanwhile, however, based on the resources that they
now have available to their communities, we must conclude that
the Anniston community, like Kentucky, is well prepared for a
CSEPP emergency. Given their state of preparedness, in our
judgment the emphasis in Alabama, as in Kentucky and many other
sites, needs to now be directed toward improving public
awareness so that the citizens know the true risks and what to
do in the unlikely event of a CSEPP emergency.
Public understanding about what to do and why it is
important that they follow protective action recommendations
during a CSEPP emergency is a critical component of readiness,
in our view. Consequently, we believe that it is time that we
join together at the Federal, the State, and the local level to
provide clear and factual information to the public that will
enable them to protect themselves and to make informed
judgments regarding their safety during both storage and
destruction of the stockpile.
In closing, through our collective efforts I am confident
that we can protect the citizens in the counties surrounding
the stockpiles in the event of a chemical agent release. This
is significant, Mr. Chairman, because according to the Army the
risk to the public during storage is greater than the risk
during destruction. Destroying the stockpile eliminates that
risk. Working toward that end should be our collective goal.

PREPARED STATEMENT

I would be pleased to answer any questions you may have.
Thank you.
[The statement follows:]

PREPARED STATEMENT OF RUSSELL SALTER

Mr. Chairman, and Members of the Committee, I am Russell Salter,
Director of the Federal Emergency Management Agency's (FEMA) Chemical
and Radiological Preparedness Division. I am pleased to provide this
statement to the Committee that addresses FEMA's role in support of the
Chemical Stockpile Emergency Preparedness Program (CSEPP). My statement
will cover: FEMA's mission and its roles and responsibilities in CSEPP;
the structure and operation of the program; and, improvements in
emergency preparedness in the communities surrounding the stockpile
sites since the program began in 1988.

FEMA'S MISSION

FEMA's overall mission is to reduce the loss of life and property
and protect our institutions from natural and technological hazards by
leading and supporting the nation in comprehensive, risk-based
emergency and consequence management programs of mitigation,
preparedness, response and recovery. FEMA accomplishes this mission in
cooperation with other Federal Departments and agencies, States, Tribal
Nations, local governments, private and volunteer organizations.
Emergency management funds provided by FEMA through grants to
States, Tribal Nations and local governments ensure that, regardless of
the cause, emergency managers can determine when an emergency is
occurring, assess and predict its impact, communicate rapidly to the
emergency management community and first responders, broadcast
effective messages to inform the affected population, determine
appropriate public health and safety strategies, and, if required,
evacuate and house the population.

CHEMICAL STOCKPILE EMERGENCY PREPAREDNESS PROGRAM (CSEPP)

In 1985, Title 14, Part B, Section 1412 of Public Law 99-145,
directed the Department of Defense (DOD) to dispose of its lethal
unitary (pre-mixed) chemical agents and munitions while providing
``maximum protection for the environment, the general public and the
personnel involved in the destruction of lethal chemical agents and
munitions . . .''
While the possibility of a chemical stockpile incident with off-
post consequences is remote, the Army recognized that the effects could
be significant.
In its final programmatic environmental impact statement, the Army
recognized that one of the ways to protect the public from the effects
of an off-post incident was to assist States, Tribal Nations and local
governments in improving their emergency preparedness. In response to
congressional direction to protect the public during the destruction of
the chemical agents, the Army sought funds to support a site-specific
emergency planning program for off-post communities located within
those 10 states that could be impacted by the off-post release of
chemicals during storage or destruction. Thus CSEPP was established.
Because the Army was not authorized to provide funds directly to
States, and did not have the infrastructure to manage the program, it
looked to other Federal agencies for support. FEMA's ongoing emergency
preparedness programs uniquely positioned the Agency to reach out to
State, Tribal Nations and local governments and assist DOD in meeting
the ``maximum protection'' mandate. Therefore, FEMA joined the Army in
implementing the CSEPP through a Memorandum of Understanding (MOU)
signed in August 1988.
While Congress mandated ``maximum protection,'' the intent of this
mandate was not further defined. Thus, FEMA and the Army developed
operating guidelines to assure that the congressional mandate is
achieved. I will further discuss how these guidelines have been
implemented later in this testimony.
A strong comprehensive emergency preparedness program is the
cornerstone to meeting the maximum protection mandate. FEMA and the
Army have developed high standards to achieve the maximum protection
objective. Maximum protection has been achieved when all these
standards are met.

FEMA'S CSEPP RESPONSIBILITIES

Management of CSEPP is a unique partnership among the U.S. Army,
FEMA, supporting Federal Departments and agencies, and States, Tribal
Nations, and local jurisdictions. The Federal-level management
structure is uniquely designed to capitalize on each Department or
Agency's expertise and administrative infrastructure to develop and
enhance the emergency preparedness capabilities of the participating
jurisdictions.
The August 1988 Memorandum of Understanding established the
framework for working with affected States, Tribal Nations and local
governments to provide for the public's health and safety. The MOU
identified respective roles and responsibilities and established joint
programs to plan, train and exercise and exchange information. FEMA and
the Army reaffirmed this original Memorandum of Understanding in
January 1993.
As the program matured, FEMA and the Army realized that the
respective roles and responsibilities needed clarification. On October
8, 1997, FEMA and the Army signed a revised MOU.
Under the terms of this MOU, FEMA is responsible and accountable
for all aspects of off-post emergency preparedness.
Specifically, FEMA: Administers off-post CSEPP funds; supports
development of response plans; prepares, develops, delivers and
evaluates training; provides technical assistance; and develops
programs to evaluate off-site readiness capability.

PROGRAM STRUCTURE

Ten states and 40 counties surrounding eight U.S. Army stockpile
sites participate in CSEPP. The eight States with chemical stockpiles
are Alabama, Arkansas, Colorado, Indiana, Kentucky, Maryland, Oregon
and Utah. Illinois and Washington also participate in the program
because of their borders' proximities to the Indiana and Oregon
stockpiles.
Thirteen counties are in Immediate Response Zones, the areas
closest to where the chemical agents are stored, generally within
approximately a 10-mile radius.
Twenty-four counties are in Protective Action Zones, beginning at
the outer edge of the Immediate Response Zones and extending to a
radius of approximately six to 31 miles. The remaining three counties
are designated as host counties, which lie outside the Immediate
Response Zones and Protective Action Zones.
The CSEPP Program is administered through the States, as are FEMA's
other emergency preparedness programs. Funds are distributed under
Cooperative Agreements, based on a work plan negotiated between the
States and FEMA Regional Offices. Under the agreements, each State
identifies needs, develops proposed projects, requests funds, and
disburses the funds at the State level and to local governments.
Consistent with the requirements of the Government Performance and
Results Act, States are responsible for financial accountability, and
periodically report on the capability improvement realized through
utilizing the funds.
This management structure is consistent with and supportive of the
authority and distribution of powers within most States, where the
State government, rather than counties or municipalities, is ultimately
responsible for protecting the health and safety of the state's
citizens.
At the Federal level, FEMA and Army Headquarters are responsible
for CSEPP policy and program development, while the FEMA Regions and
the Army Soldier and Biological Chemical Command manage daily
operations. Site-specific issues are handled through site-specific
Integrated Process Teams. These teams (required by Section 1076 of
Public Law 104-201, the Department of Defense Authorization Act for
1997) are the primary local forum to identify site-specific operational
issues, propose solutions to those issues to the appropriate decision
makers, and implement program and operational decisions.

CSEPP MANAGEMENT SYSTEM

CSEPP has been developed from two perspectives. First, it focuses
on providing necessary equipment and staff training to establish a
response infrastructure that enables emergency managers to quickly
alert the public, manage the response, and communicate with the public,
the media, and emergency responders. The second equally important focus
is to ensure that the public surrounding the stockpile locations know
what to do in the unlikely event of an accident.
FEMA is responsible for carefully evaluating requests from the
States and communities to achieve ``maximum protection'' capability
within the limits of funds provided. As such, our goal is to deliver
maximum available resources to the local communities facing the most
significant potential threat. However, we have had to ensure cost-
efficiencies in procurement and compatibility between major systems
that benefit multiple jurisdictions. In many cases, this has meant
procurement at the state level for alert and notification,
communications and automation systems. Moreover, we must ensure
effective program management at the Federal level to maintain
consistent capabilities across all jurisdictions.
As of April 4, 2001, $411,301,608 has been awarded to the States
under the annual Cooperative Agreements.

CSEPP BENCHMARKS

In May 1993, the Army and FEMA jointly established National CSEPP
Benchmarks.
The benchmarks identified capabilities to be achieved by
participating State and local jurisdictions in meeting the ``maximum
protection'' mandate. These benchmarks also are the basis for funding
decisions, establishing program priorities and assessing capabilities.
The following benchmarks are essential and must be in place:
--Alert and notification system for the installations, Immediate
Response Zones and limited areas of the Protective Action
Zones;
--Emergency operating center for each installation and Immediate
Response Zone county;
--Communications system for the Immediate Response Zones and
installation and between the military installation, Joint
Information Center and the State; and
--Automated data processing system connecting critical installations,
on-post and off-post emergency operations centers, Joint
Information Center and the State emergency operating center.
In addition, the benchmarks also prescribe the following functional
capabilities:
--Training programs, consistent with the FEMA State Training Plan and
Army certification requirements, that maintain proficiency of
emergency services providers, responders and CSEPP staff, as
defined and measured by the CSEPP standards;
--An exercise program consistent with approved exercise policy;
--A community involvement program for public information and
education; and
--Coordinated plans that conform to established CSEPP Guidance for
each installation, State and Immediate Response Zone and
Protective Action Zone, updated as CSEPP guidelines are revised
or the jurisdiction's circumstances change.
Over the last several years, it has become apparent that personal
protective equipment for emergency support personnel, and
decontamination equipment are also central to operations at many sites.
Therefore, in addition to the eight CSEPP benchmarks, protective
equipment and decontamination have been identified as preparedness
components.

IMPROVEMENTS TO DATE

Significant accomplishments have been achieved in community
preparedness surrounding the stockpile sites. As demonstrated below,
stockpile communities are clearly better prepared today than when FEMA
entered the program in 1988.
Staffing
CSEPP funds approximately 280 staff at the State and county levels.
Personnel include planners, trainers, health professionals, automation
experts, and logistical personnel. Thus, CSEPP not only provides
significant equipment to respond to a chemical event, but also pays for
the staff required to manage the program on a daily basis.
Planning
Guidelines for emergency response preparedness to a chemical
stockpile incident are contained in the Planning Guidance for the
Chemical Stockpile Emergency Preparedness Program. The CSEPP Planning
Guidance was most recently revised in May 1996 and covers all program
areas.
In addition, a variety of planning tools were developed for use by
State, Tribal and local jurisdictions. These include a dispersion model
to predict downwind hazards, an evacuation modeling system to assist in
estimating evacuation times, and a protective action dose reduction
estimator used to develop protective action strategies.
CSEPP-specific emergency response plans have been developed by all
participating CSEPP jurisdictions. The focus has now shifted to assure
that all the plans are fully integrated among jurisdictions; and that
the plans incorporate specific provisions to select appropriate
protective actions, to protect special populations and to provide
support to people who must evacuate.
In addition to developing jurisdiction-specific emergency response
plans, preparing for a CSEPP emergency requires that various
jurisdictions integrate their response activities. The preferred method
to ensure integration is to have agreements in place between the
jurisdictions before a response is required. These agreements can cover
response activities such as fire fighting, daily information exchange
between the on- and off-post communities, and agreements between the
community and the Red Cross to shelter evacuees. A CSEPP workgroup
developed and distributed guidance for drafting and negotiating a
variety of general and CSEPP-specific agreements.

ENHANCED RELATIONSHIPS

CSEPP requires a partnership approach as evident in the numerous
cooperative activities and planning efforts among the installations,
the communities surrounding the stockpile sites and the States. Among
the signs of increased cooperation are monthly or quarterly site-
specific Integrated Process Teams that bring together all affected
parties; an approved accident classification system; and dedicated
communications links between the installations and local government.
Finally, on- and off-post jurisdictions continue to participate in
joint CSEPP training and exercises.

Alert and Notification
Alert and notification relies on two separate and distinct steps:
(1) alerting the public; and (2) providing the public with information
concerning appropriate protective actions. The CSEPP alert and
notification system consists of a network of outdoor warning devices
(generally voice capable sirens) covering populated areas of the
Immediate Response Zones, which are used in conjunction with indoor
devices in residential dwellings and special facilities.
Major strides have been made in alert and notification since the
inception of CSEPP. When CSEPP began, a majority of the States and
counties employed some form of route alerting (such as loud speakers on
roving vehicles), along with the Emergency Broadcast (now, Emergency
Alert) System. Sirens were rare. Today, approximately 500 sirens, most
with voice capability, have been installed and are operational within
the CSEPP counties. These sirens are quicker and much more effective
than previous methods for alerting the general public.
Three types of indoor receivers are approved for use in CSEPP:
specially designed Tone Alert Radios; National Oceanic and Atmospheric
Administration weather radios; and Emergency Alert System-capable
receivers. Regardless of the type of indoor radio selected--for
purposes of this testimony, they will all be considered under the
umbrella term Tone Alert Radios--the indoor alerting device must
provide both an alert signal and verbal information. To date, nearly
35,000 Tone Alert Radios have been installed CSEPP-wide.

Emergency Operations Centers
Gathering all officials with key command and control responsibility
at a central location is critical to an effective response. Thus, CSEPP
has provided funds to build or renovate approximately 20 Emergency
Operations Centers. These centers combine physical facilities,
equipment, personnel and procedures to facilitate coordinated
management of a jurisdiction's emergency response. At this time, all
centers are operational and conform to CSEPP standards. In fact, they
also are being used for exercises and real-world emergencies.

Communications Systems
Improved communications networks exist in all Immediate Response
Zones and Protective Action Zone counties. While communication methods
vary from site to site, communication systems are fully operational at
this time.

Automated Data Processing
Early on, integration of state-of-the-art automated data processing
into CSEPP was considered to be essential to meet the maximum
protection requirement. While every site has an operational, integrated
Automated Data Processing system, selected installations currently use
the Emergency Management Information System, while many off-post
communities have switched to the newer Federal Emergency Management
Information System.
The Federal Emergency Management Information System allows for pre-
incident planning, development of categories of protective action
recommendations and daily electronic messaging. In the event of an
emergency, the system will be used for chemical event notification,
consequence analysis and automatic warning activation. It also contains
plume-projection capabilities, a geographic information mapping system,
and fully integrated electronic checklists and message boards.

Personal Protective Equipment
CSEPP avoids placing off-post emergency workers in harm's way. In
fact, it is our policy that these workers never enter the chemical
threat plume area as identified by our very conservative downwind
hazard prediction software. However, as an added precaution, we have
funded Level C Personal Protective Equipment ensembles that include a
chemical protective suit, powered air purifying respirator, gloves and
boots. This equipment, along with the necessary training, is provided
to off-post emergency workers who, as an example, man traffic and
access control points, and medical workers.
To date, over 5,000 protective equipment ensembles have been
provided to protect CSEPP's emergency workers.

Decontamination Equipment
In the event that emergency workers or the general population were
exposed to liquid agent contamination, CSEPP provides training and
equipment for decontamination. Approximately 45 fixed or mobile
decontamination facilities have been provided to the communities.

Collective Protection
In some cases, special, congregate populations in the Immediate
Response Zones may not be able to evacuate in a safe and/or timely
fashion should a release occur. In such cases, CSEPP has funded
enhancements to the facilities these special populations occupy. These
collective protection enhancements are comprised of expedient (shelter-
in-place kits) sheltering, enhanced sheltering, use of recirculation
filters and over-pressurization.
Expedient sheltering allows an individual to cover facility windows
with plastic and seal the edges with tape, at the time of a chemical
agent release. Enhanced sheltering involves permanent improvements to a
facility's structure, such as additional caulking and improved
ventilation closures. These deliberate enhancements are accomplished in
advance as an emergency preparedness measure. Over-pressurization
involves the installation of positive pressure ventilation and
filtering systems in a facility to keep its ambient atmosphere free of
agent.
Over-pressurization is the most protective of collective protection
measures, but it also is the most expensive, intrusive, and time
consuming (in terms of construction) to implement. Decisions on which
collective protection strategy to use are based upon such
considerations as the extent of threat to the facility population, and
ability to implement a strategy prior to destruction of the threat.
CSEPP has funded over-pressurization for approximately 30 special
facilities. Enhanced and expedient sheltering has been provided for
many other structures.

Training
Training has been a valuable link among the counties, installations
and the States. Twenty-two CSEPP specific training courses have been
developed since CSEPP specific training was first initiated in 1990.
These 22 courses provide instruction in six general categories: basic
CSEPP orientation; self and casualty care; planning; protective action
decision making; public affairs; and communications. Roughly 30,000
people have enrolled in CSEPP-related emergency preparedness and
response training programs. The majority of those trained are at the
county level. While courses are developed at the National level for
program-wide consistency, local participants remain the target
audience. [Note: The number of enrollments is likely to exceed the
actual number of people trained because some individuals have taken
more than one course.]
Each state has an Exercise and Training Officer who works directly
with the counties and often with the installation to enable CSEPP
personnel to meet the standards and procedures developed by the
program. Based on needs identified by local officials, early training
focused primarily on CSEPP orientation, planning, response, public
affairs and medical preparedness. As new operating systems were
installed and additional standards and procedures developed, training
has addressed these new needs identified by local officials. For
example, recent training covers decontamination, personal protective
equipment, and use of auto injectors.

Exercises
The CSEPP exercise program tests local, installation and State
emergency operations plans and the jurisdictions' capabilities to
implement those plans. Through 1998, the mandatory annual exercises
were always Federally conducted, managed, and evaluated to meet a
certain set of criteria. Moreover, Federally Managed Exercises are
designed and managed on-post by an Army co-director and off-post by a
FEMA regional co-director. The extent of play was negotiated between
the FEMA co-director and the off-post communities.
In 1999, the exercise criteria were revised so that CSEPP
communities can opt to design and conduct a state-led exercise every
other year. This training oriented Alternate Year Exercise allows CSEPP
communities to design site-specific exercises at the State and local
level to focus on specific interests or concerns. To date, more than 70
CSEPP exercises have been conducted.

Public Information and Education
Public education and information programs can present a major
challenge. At the core of this challenge is our ability to earn the
public's trust and confidence that the Federal, State and local
partnership can and will protect those who live and work near the
chemical weapons stockpiles.
In 1988, few formal off-post chemical stockpile-specific public
education and emergency public information programs were in existence
in the eight stockpile communities. Over the years, FEMA has led a pre-
emergency public awareness campaign targeting the public, community
leaders, interested organizations, and the media. At the same time,
FEMA has helped CSEPP communities and States establish procedures for
timely, accurate, and coordinated dissemination of information to the
public in the event of an actual stockpile emergency.
Today, all CSEPP states and Immediate Response Zone counties have
CSEPP-funded staff to handle public education and information needs.
CSEPP educational and informational materials, such as calendars,
brochures and information sheets, have been distributed throughout the
CSEPP communities. Site-specific videos explaining alerting procedures
and appropriate protective actions have also been distributed to each
of the CSEPP sites.
We worked hand in hand with the Umatilla Public Affairs group to
craft a media campaign designed to educate citizens about protective
actions. Survey results show that residents credit the outreach
campaign for giving them a better understanding of protective actions,
such as shelter in place. Oregon's successful outreach campaign soon
will be implemented nationwide.
The Joint Information Center is a permanent central facility
activated in an emergency to facilitate the coordination and
compatibility of information disseminated by the various agencies and
jurisdictions to the public and media. These centers are an integral
part of CSEPP. They operate in all CSEPP communities except Aberdeen,
Maryland. Instead of establishing a permanent location, the Aberdeen
community has chosen to center its media operations in a mobile unit.
Samples of and guidance for Emergency Alert System messages have been
distributed. The CSEPP counties also have pre-scripted protective
action recommendation messages

CHALLENGES

Site-specific Issues
At the federal level, we believe that we have provided the
necessary funding and support to achieve the preparedness goals at all
CSEPP sites. A series of meetings were held during the past year
between FEMA, Army, and State and local officials in Anniston, Alabama.
While much headway has been made to purchase additional sirens and Tone
Alert Radios, initiate a local public education campaign, purchase and
distribute shelter-in place kits and upgrade the Emergency Alert System
for all Alabama CSEPP counties, several issues remain unresolved.
Despite the constructive engagement of dialogue that has taken place,
in some cases, State and local requests cannot be fully funded due to
fiscal constraints imposed by life cycle cost estimates for the
project. In other cases, State and local requests have been determined
by independent analysis and study to provide no additional protection
to the public.
FEMA and the Army are committed to fulfilling commitments made as
recently as November 2000 for public safety enhancements and to
resolving the remaining issues. However, as technical studies have
repeatedly shown, the risk to the public safety from continued storage
of the chemical stockpile at the Anniston Chemical Depot far exceeds
the risk of disposal operations, and the best way to ensure maximum
protection of the citizens living in the Anniston community is the
prompt and complete destruction of this stockpile without delay.
In Madison County, Kentucky, community representatives help us to
identify collective protection needs. Madison County has taken the lead
in public education by visiting schools, and numerous community
organizations. Eastern Kentucky University also plays a major role by
providing technical assistance and training.

Public Education
It is clear that the public will continue to differ in their degree
of involvement and interest in the program. The public's lack of
involvement poses difficulties in educating them on what to do in the
event of a CSEPP emergency. Specifically, on a number of occasions,
residents surrounding the stockpile sites lacked knowledge regarding
what to do in a CSEPP emergency. When questioned, many of these same
people admit that while they are aware of the informational resources
available in their communities (including public information
storefronts), they have not availed themselves of this information. Our
attempt to overcome this disconcerting trend is a central component of
an aggressive national media strategy.

Risk Communication
Appropriate, effective and frequent dialogue with the affected
public about risks is a continual focus for the CSEPP. How that
information is interpreted or modified by existing beliefs remains
problematic. To enhance risk communication efforts, we continually
strive to discuss risk in a manner easily understood by the majority of
the public.

Collective Protection
While the equipment and/or renovations required to complete
expedient and enhanced sheltering are relatively inexpensive and can be
installed rapidly, over-pressurization requires renovation of the
entire ventilation and filtering systems and are extremely time
consuming. Our goal is to protect public health and provide for their
safety. However, since over-pressurization is a highly effective method
to provide public protection, we support its use where warranted. Since
continued storage is a much greater risk than destruction, the only way
to eliminate the public's risk completely is to eliminate the
stockpile. Therefore, we are concerned that delays in collective
protection projects could increase public risk.

CONCLUSION

Nearly all major systems are in place and operational. Remaining
improvements will be put in place to meet the congressional mandate of
maximum protection as soon as possible. In the near future, all sites
will enter the maintenance phase, which will continue until all the
chemical weapons stockpiles are destroyed.
FEMA is committed to ensuring the successful implementation of the
CSEPP and protecting the health and safety of our citizens. This has
been, and continues to be, a formidable task. As previously stated,
``maximum protection'' is the most stringent requirement of any
emergency preparedness program directive, but we are confident that the
Federal, State, Tribal, and local emergency management community can
meet the challenge.
Significant gains have been made since 1988 in the abilities of the
CSEPP States, Tribal Nations and local jurisdictions to respond to a
chemical weapons incident. These improvements aid CSEPP communities in
protecting their citizens from the full range of natural and
technological hazards they face. We are thankful to the CSEPP
communities for their commitment and dedication to this important
program, and pledge to continue to work with them until the risk of a
chemical stockpile incident no longer exists.

STATEMENT OF CRAIG WILLIAMS, DIRECTOR, CHEMICAL WEAPONS
WORKING GROUP

Senator Shelby. Mr. Williams.
Mr. Williams. Yes, good morning, Mr. Chairman, members of
the committee, Senator McConnell. I appreciate the opportunity
to present testimony before you today. I am Craig Williams,
Director of the Chemical Weapons Working Group, the CWWG. It is
a coalition of over 160 organizations that support the
destruction of chemical weapons in a manner that does not
destroy the health of our communities or the environment and is
implemented in an open and honest process.
The Working Group is very supportive of the international
campaign to ban these weapons and destroy them, the Chemical
Weapons Convention. However, we do prioritize the wellbeing of
our communities above any deadline, whether it be national,
international, Congressional. Our communities come first.
I come before you today with a message. The Program Manager
for Chemical Demilitarization Office, the agency responsible
for carrying out the chemical weapons program, in our opinion
has run amok. Although I consider many individuals there to be
hard-working and honorable people, the current structure and
leadership in PMCD is more concerned with defending its own bad
decisions than ensuring the maximum protection of the public,
as directed by Congress.
Mr. Chairman, members, the Guiness Book of World Records
cites VX chemical agents as ``deadliest substance in the
world.'' It is not a material that should be put in the care of
an agency that chronically misrepresents facts to the Congress
and to the American people. Yet I will present to you evidence
of systemic misrepresentation of technical capability, schedule
compliance, cost, permit fraud, fiscal mismanagement, and
outright lies to the citizens and to you, the Congress of the
United States.
First let me begin with what PMCD claims is their
capability to meet the chemical weapons deadlines, treaty
deadlines. The schedule of disposal operations as offered to
Congress in September of 2000 and repeated here today shows
that the operational period for all four incineration sites,
ending by January 2007, 3 months before the treaty deadline.
Colorado and Kentucky, as has been pointed out, could vary from
that. The 1999 status report submitted to Congress by PMCD
shows Kentucky and Colorado being close to the deadline of
April 2007, thereabouts, and again we heard that testified to
this morning.
In the packet of information that I provided to you is an
internal report produced by PMCD which shows that these
representations are knowingly false. The report, entitled
``Operations Schedule Task Force Report 2000, Final Report,''
is accompanied by a memo to the project manager for chemical
stockpile disposal and copied to every high-ranking person in
PMCD. It also has a concurrence page that is signed off on by
each task force member.
Since the CWWG received this report through unofficial
channels, we have consulted with three experts with a
cumulative total of more than 50 years of experience in
chemical weapons-related activities. Based on that report, the
Chemical Weapons Working Group developed a methodology and a
set of calculations which resulted in the actual operational
schedule on the chart I show you now.
If PMCD had any inclination to be honest with the
communities or this committee, they would have presented a
schedule to you in late 2000 or today that at least made some
attempt to reflect accurately the knowledge of the true
schedule. The chart I am showing you is in your packet. There
is a chart also in your packet that was the schedule presented
at a public meeting in Anniston, Alabama, on March 17th, 2001,
5 months after this report internally was completed. That chart
that was shown in Alabama in Anniston on March 17th presented
to the citizens of Anniston, the emergency personnel, the local
elected official, shows that Anniston will be completed in
2005. Yet their internal report shows that operations will not
conclude in Alabama until 2014, a 9-year difference.
Senator Shelby. Why the lapse, the difference? Why?
Mr. Williams. The difference is in the report. It is based
on throughput projections based on actual operational
experience at Johnston Island and in Utah and not just some
projection that is basically mythical.
The story is the same at other sites, as reflected in the
summary chart. What is being told to the American people and
the Congress simply is not the truth. No one wants these
weapons destroyed more than we do that live closest to them.
But we should not be forced to risk the health of our
communities by burning weapons when safer technologies exist,
and time and time and time again PMCD has claimed that
incineration is the way to get the job done faster, the only
way to meet the treaty deadlines.
PMCD has repeatedly used these Congressional deadlines,
treaty deadlines, to manipulate communities into accepting what
we consider to be a dangerous technology. Now that we have a
report from the agency's own leaders showing that incineration
cannot make the treaty deadline or even come close--
additionally, we now know that citizens will have to be exposed
to toxic emissions from these incinerators much longer than the
Army is representing, and all this is unacceptable.
In the matter of cost, in the 1999 status report delivered
to you, to Congress, PMCD stated the cost was $13.6 billion. In
the 2000 report, as Senator McConnell pointed out, $14.1
billion. But those representations, like schedule, are also
false. Provided to you in your packet is a one-page memorandum
received from an anonymous source in the government which
reconstructs the findings of another internal PMCD document.
This report is tightly held within PMCD, as was their schedule
document. The CWWG has not been able to obtain the original.
Perhaps the committee would request a copy.
The summary page in your packet reflects what PMCD really
knows about cost, and what does it tell us? That the actual
projected cost of the program is not $14.1 billion, as you have
been told, but actually closer to $24 billion. However, the
2000 status report cited the life cycle cost at $14.1 billion.
You will notice in your packet in that paper that there are
two sections called ``Operational extensions cost overruns''
and ``Projected operational extension cost overruns.'' The
total of those two lines are $4.7 billion in known or likely
cost overruns for operations alone, not construction, not
CSEPP, not non-stockpile--strictly for construction--I'm sorry,
simply for operations based on the schedule extension.
Looking at the information from both documents, I submit to
you that we have been intentionally misled about not only
schedule but cost in this program, and this is also
unacceptable.
I would submit for the record this statement. It goes into
areas of permit fraud, particularly in the State of Oregon,
where we have yet another confidential memo that demonstrates
the fact that PMCD when they submitted their permit application
to the State of Oregon knew that what they were submitting to
that State as representative of that facility and its
operational capability, they knew it would not function.
They are required under Federal law to present an accurate
representation of what they plan to build and operate. Because
of the time lines in the submission of the application both in
Oregon, Alabama, and Arkansas, this same fraud was perpetuated
at all three sites. The Army knew and the confidential memo
states clearly, and I quote the regulating supervisor from
Oregon where he says the Army knew in the late eighties that
the dunnage incinerator would definitely not be able to process
the material.
They received the application in 1995. But the regulatory
supervisor says: ``The Army has presented information to the
Department of Environmental Quality (DEQ) that clearly shows
they knew in 1994 that the dun would not meet the required
performance standards.''
If these people know that this is not going to meet the
standards, they are required to modify their application.
Otherwise they have committed fraud under RCRA, the Resource
Conservation Recovery Act.
I am going to briefly walk through the next issue, which is
of great concern, and that is live agent releases. The Army is
on the record as saying they have had four live agent releases
out of the stacks of their facilities. In my testimony and in
the packet I have given you is evidence of at least 15 live
agent releases out of the stacks of these facilities that we
can document. We say that there are very many more, but we are
only presenting to the committee those that we can prove. They
say 4, we say 15. We do not really know how many, but four is
clearly a gross underestimation.
In summary, I would just like to say what it all boils down
to, Mr. Chairman and members of the committee, is a lack of
accountability and oversight based on what I have presented to
the committee both in oral and in written form in your packets
today, that there is absolutely no question that these two
components, accountability and oversight, are in short supply
in this program.
I have provided to you in your packets excerpts from over
10 years of reports generated inside and outside of government,
all reaching the same fundamental conclusion. That is, when it
comes to PMCD no one is minding the store.
The 2000 report from the Secretary of Defense to the
Congressional defense committees on the management of the
chemical weapons demil program states: ``CDP''--chemical
disposal program--``requires a number of management
improvements. These relate to leadership, organizational
structure, public outreach, and current contracted support for
the program.''
They state: ``No one individual or office appears to have
day to day authority or responsibility for the program, whether
internally or in the chemical demil program's external
relations with the public and the Congress. The Secretary
recommends restructuring the organization.'' But the report
also says merging the management of the programs would require
amending legislation.
Based on the evidence presented and much more that is in
your packets, it should be clear that the chemical weapons
disposal program must be reorganized to bring about honesty and
accountability to the public, to the Federal decisionmakers. We
in the communities feel this is of uppermost importance.

PREPARED STATEMENT

We thank you for holding these hearings on this most
serious matter. I will be glad to take any questions after the
other panelists present.
[The statement follows:]

PREPARED STATEMENT OF CRAIG WILLIAMS

Good morning Mr. Chairman and Members of the Subcommittee. I
appreciate the opportunity to present testimony before you today. My
name is Craig Williams. I am the Director of the Chemical Weapons
Working Group (the CWWG). The CWWG is a coalition of over 160
organizations that support the destruction of chemical weapons in a
manner which does not destroy the health of our communities and the
environment, and is implemented in an honest, open process.
The CWWG supports the Chemical Weapons Convention (CWC), the
international campaign to rid the world of these weapons.
However, we put the safety of workers and the public as a priority
over any arbitrary deadline, for we live in the communities where the
destruction is to take place.
I come before you today with a message--that the Program Manager
for Chemical Demilitarization (PMCD), the agency responsible for
carrying out the chemical weapons program, has run amuck. Although I
consider many individuals within the agency to be hard working and
honorable people, the current structure and leadership in PMCD is more
concerned with defending its own bad decisions rather than ensuring
``maximum protection'' of the public, as was directed by Congress.
Mr. Chairman, Members of the Committee, the Guinness Book of World
Records cites VX chemical warfare agent as the ``deadliest substance in
the World.'' It is not material that should be put in the care of an
agency that chronically misrepresents facts to the Congress and the
American people. Yet, I will present to you evidence of systemic
misrepresentation of technical capability, schedule compliance, cost,
permit fraud, fiscal mismanagement and outright lies to citizens and to
you, the Congress of these United States.
First, let me begin with PMCD claims on their capability to meet
CWC treaty deadlines.

Schedule:
The schedule of disposal operations as offered to Congress on
September 30, 2000, shows the operational period at all four
incineration sites ending by January 2007. Three months before the
Treaty deadline. Colorado and Kentucky have no closure dates in this
Report as the technology for these sites has yet to be determined. But
the 1999 Status Report shows a Kentucky completion date of April 2007
and Colorado at August 2007, using incineration.
In the packet of information provided is an internal report
produced by PMCD which shows that these representations are knowingly
false. The Report, ``Operations Schedule Task Force 2000: Final
Report'' is accompanied by a memo to the Project Manager for Chemical
Stockpile Disposal and copied to every high ranking person in PMCD. It
also has a ``concurrence `` page signed off on by each Task Force
member.
Since the CWWG, received this Report through unofficial channels,
we have consulted with three experts with a cumulative total of more
than fifty years of experience in chemical weapons related activities.
Based on the Report, the CWWG developed a methodology and a set of
calculations, which resulted in the actual operational schedule on the
chart before you.
If PMCD had any inclination to be honest with the communities or
this Committee they would have presented a schedule to you in late 2000
that at least made some attempt to reflect accurately its knowledge of
the true schedule.
But their deception goes further. The chart I am holding up is in
your packet. It is the schedule presented at a Public Meeting in
Anniston, Alabama on March 17, 2001--five months after the Task Force
Report was completed. This chart presented to the citizens of Anniston,
the emergency personnel and the local elected officials, shows an
intentionally false schedule for Alabama. It clearly shows operations
conclude in 2005. Yet their internal Report shows operations will not
conclude in Alabama until 2014, a nine year difference!
The story is the same at the other sites as reflected in the
summary chart in your packet and displayed for you here.
What is being told to the American people and the Congress simply
isn't the truth!
No one wants these weapons destroyed more than the citizens living
closest to them. But we should not be forced to risk the health of our
communities by burning the weapons, when safer disposal technologies
exist. Time and time again, PMCD has claimed that incineration can get
the job done faster; that it was the only way the United States can
meet the 2007 CWC deadline.
PMCD has repeatedly used Congressional deadlines, and now the
Treaty deadline as a means to manipulate communities into accepting
this dangerous incineration technology as the only way to met schedule.
Now we have a report by the agency's own leaders, showing that
incineration can't make the Treaty deadline--or even come close.
Additionally, we now know citizens will be exposed to the toxic
emissions from these incinerators for much longer than they are telling
us.
All this is unacceptable.

Cost:
In the 1999 Status Report to Congress PMCD stated the cost of the
stockpile disposal program was $13.6 Billion; in the 2000 Status Report
it was up to $14.1 Billion. I believe their latest publicly stated cost
projection is $15.7 Billion. But, like the representations on schedule,
this information is false.
Provided to you is a one page memorandum received from an anonymous
source in government which reconstructs the findings within another
internal PMCD document.
This report is as tightly held within PMCD, as was their schedule
document. The CWWG has not been able to obtain the original. Perhaps
the Committee would request a copy.
This summary page reflects what PMCD really knows about cost--and
what does it tell us? That the actual projected cost of this program is
not the $15.7 Billion you and I have been told, but is actually closer
to $24 Billion. However the 2000 Status Report cited the Life Cycle
Cost Estimate at $14.1 Billion at a time when their true estimate was
$24 Billion.

Cost and Schedule Information Integration:
Note the line items ``Operational Extension ``Known'' and
``Likely'' cost increases in the cost chart. It shows a total of $4.7
Billion in additional costs for operations.
Calculating the cost of schedule slippage and the figure is $4.21
Billion.
Looking at the information from both documents, I submit to you
that we have all been intentionally misled about the schedule and cost
of this program.

Permit Fraud:
In addition, PMCD has committed permit fraud under federal law. You
now have a confidential memo sent from Oregon's chief regulator on the
chemical demilitarization program to the Director of the Oregon
Environmental Quality Commission.
The memo's author points to the Army's ``commitment to treat
secondary waste ``on-site,'' and then says, ``The Army made these
commitments to secure issuance of the permit . . ..''
Under the federal Resource Conservation and Recovery Act (RCRA)
laws (42 USC Sec. 6925 & 40 CFR Sec. 270), applicants are required to
accurately represent the capabilities of any facility they seek a
permit for. Information that would substantively change the accuracy of
the application is required to be submitted in a timely manner during
the application process and before the permit is issued, if known about
before issuance.
The Oregon memo reads, ``We [Oregon DEQ] now know that the Army
[PMCD] knew as early as the late 1980's that the Dunnage Furnace would
definitely not be able to process carbon, and would only be able to
process other wastes (primarily wood) with major design modifications
to the DUN furnace and it's pollution abatement system.''
It then reads, ``The application we received in 1995 includes the
following statement, `On the basis of the incinerator design and the
JACADS date, it is anticipated that the Dunnage Incinerator will meet
the applicable incinerator performance standard.' ''
The memo goes on to say, ``The Army (PMCD) has presented
information to DEQ that clearly shows they knew in 1994 that the DUN
would not meet the required performance standards.'' That Members of
the Committee is permit fraud under federal RCRA law and PMCD should be
held accountable.
Furthermore, since the Alabama and Arkansas permit applications
were also submitted on or after the Oregon application, PMCD repeated
this illegality at those locations as well.

Agent Releases:
Over the years the CWWG has been tracking live chemical agent
releases from the Army's incinerators in the Pacific and Utah. But how
forthcoming has PMCD been about these releases? Consider the following:
When asked about the number of live chemical warfare agent releases
from their incineration facilities, PMCD's answer is, ``There have been
a total of four releases, three at JACADS and one at TOCDF.'' But this
is not accurate.
--In a memo to Congressman Scotty Baesler in 1995, the Army
acknowledges three JACADS releases, as well as 9 chemical agent
releases at CAMDS, the Utah prototype incinerator.
--A 1995 Report to EPA shows another release at JACADS.
--A 1999 incident report submitted to the State of Utah said the
alarms ``. . . did not confirm agent.'' But a subsequent
internal report on the same incident concludes that agent did
migrate outside.
This internal report also shows how the agent confirmation methods
used by PMCD, ``have allowed false assumptions to be made'' for the
thousands of alarms that have rung off--always presented to the public
as false alarms (ie: not confirmed for agent). We believe this is by
design.
Counting the May 8, 2000 Utah incident, rather than the four agent
releases PMCD admits to, we have 15 that can be documented.
This is unacceptable.

Oversight and Accountability:
What it all boils down to then Mr. Chairman . . . Members of the
Committee . . . is a total lack of accountability and oversight. Based
on what I have presented to this Committee in both oral and written
form today there should be absolutely no question that both
accountability and oversight are in short supply in this program.
I have provided excerpts to you from over ten years of reports
generated inside and outside of government all reaching the same
fundamental conclusion--when it comes to chemical weapons disposal and
PMCD--nobody is minding the store.
In the 2000 Report of the Secretary of Defense to the Congressional
Defense Committees on the Management of the Chemical Demilitarization
Program it states, ``CDP requires a number of management improvements.
These relate to leadership, organizational structure, public outreach
and current contracted support for the program.'' and that, ``No one
individual or office appears to have day-to-day authority or
responsibility for the program whether internally or in the CDP's
external relations with the public and the Congress.''
The Secretary's recommendation: ``Restructuring of the
organization.'' But the Report also said, ``Merging the management of
the programs would require amending legislation.''
Based on the evidence presented, it should be clear that the
chemical weapons disposal program must be reorganized to bring about
honesty and accountability to the public and the federal decision-
makers.
Thank You for holding these Hearings on this very serious matter.
[Clerk's Note.--Due to the volume of the ``Operations Schedule Task
Force 2000 Final Report'', the report will be placed in the
subcommittee files.]

Senator Shelby. Mr. Kinney.
Mr. Kinney. I have been asked to defer to Mr. Henderson if
that is okay for now.
Senator Shelby. Mr. Henderson. Go ahead, Mr. Henderson.
STATEMENT OF JAMES ELI HENDERSON, ASSOCIATE
COMMISSIONER, CALHOUN COUNTY, ALABAMA
Mr. Henderson. Mr. Chairman, Senator Shelby, members of the
committee: My name is Eli Henderson and I am a Commissioner in
Calhoun County, Alabama.
Senator Shelby. Pull that mike up closer to you.
Mr. Henderson. I am a Commissioner in Calhoun County,
Alabama. My district includes all the area around the Anniston
Army Depot (AAD) where 2,500 tons of deadly chemical agents are
stored in the middle of a population center. There are more
than 76,000 people residing in the Calhoun County immediate
response zone, a radius of 9.5 miles around the chemical
weapons stockpile at AAD.
In sum, my constituents are at ground zero. Our commission
is involved because we operate the local emergency management
agency. The Army says it will destroy the 2,500 tons of deadly
agents, but they refuse to assume any liability off post,
refuse to make any final decisions regarding what emergency
action our county should take, and are only willing to make a
protective action recommendation based on a faulty guidebook
they want us to implement.
When the Army came to Anniston years ago to seek approval
for the incinerator, I was one of the Army's biggest
supporters. I am a former Marine. I believe in a strong
national defense. I know how dangerous the agents stored at AAD
are because for 10 years I worked at the depot wearing a gas
mask and looking for leaking munitions, particularly M-55 GB
rockets.
When the debate raised about whether to build the
incinerator or seek alternative technologies, I stood shoulder
to shoulder with the Pentagon. I believed the Army when they
told our community that they would provide us with maximum
protection. I believed them when they said the incinerator was
failproof. I believed them when they told us that the
destruction would be done on a no-effect basis, meaning
exposure to agent would be so low that we would have no adverse
health effects. I believed them when they told us they would
provide us with the Federal funds necessary to collectively
protect our schools, hospitals, senior citizens centers, and
nursing homes so that our citizens would be shielded from these
deadly agents. I believed them when they told us that we would
have sufficient time to evacuate.
Events during the past few years have shown that I was
wrong. The Army has misled the citizens of Calhoun County. The
failproof technology they promised us does not exist. The
incinerator at Johnston Atoll leaked five times. After a
thousand design modifications, the Army constructed a second
incinerator at Tooele, Utah. Despite promises the technology
had been perfected, the Tooele incinerator leaked 42 milligrams
of sarin on May the 7th of last year. The accident was due to a
number of factors, but human error was the biggest problem, and
human error can never be eliminated.
The State of Utah shut the incinerator down for the fourth
time in 5 years, and a month before the leak there were 38
false alarms, a dozen of unknown origin. The operator illegally
attempted to restart the furnace and waited 4 hours before
notifying local emergency personnel. So much for a failproof
technology.
Regarding the no-effect standard, our community was always
told we would never be exposed to agents at a level that would
affect our health. That promise was made repeatedly during the
Army's campaign to gain the needed support. That promise has
continued while the contractor secured the construction permit.
Then last year, after more than $750 million had been spent
and the facility was more than 90 percent complete, we were
given a copy of the Alabama CSEPP guidebook. This guidebook
contains the protective action recommendations which the Army
and FEMA want us to tell our citizens to take in the event of
an accident. The guidebook caught us totally off guard because,
instead of the no-effect standards we had promised our
citizens, it contained a new, weaker standard of no deaths and,
when you read the fine print in the footnotes, an even weaker
standard of 1 percent lethality. So much for the promise of no
effects.
The guidebook contained another disturbing change. Instead
of the long-promised evacuation option our citizens had been
practicing for the past decade, the guidebook analyzed
thousands of potential scenarios and concluded that in more
than 95 percent of the situations studied for people living in
the Anniston-Oxford-Saks-Weaver population center there would
not be sufficient time to evacuate.
The guidebook instead recommended we tell our citizens in
the population centers to shelter in place. According to last
year's letter from the depot's commander, shelter in place
means--and I am quoting Colonel Williams--

``Stay calm. Stay inside or go inside if you are outside.
Close all doors to the outside and close and lock all windows.
Turn off all air conditioning, heating exhaust and ventilation
systems with fans. Do not place the system on recirculate. If
there is a fireplace, extinguish the fire and close the damper.
Close as many internal doors as possible in home or other
buildings. Close all garage doors in attached garages as well
as doors normally left open for ventilation. Go into a central
room with the least number of windows, such as a bathroom or
interior closet. Take an AM-FM radio. Keep your radio on and
tuned to an EAS station. Stay calm and move as little as
possible. Activity increases the rate of breathing, which leads
to greater exposure to any vapors which might seep into the
room. If you suspect that vapor has entered your structure,
hold a wet cloth over your nose and mouth.''

At the same time, the guidebook recommends our Emergency
Management Agency (EMA) tell citizens living outside the
population center that they evacuate as soon as possible. Think
about that. The leaking agent is so toxic the people 10, 20,
37, 40 miles away need to evacuate, but people in downtown
Anniston will be just fine if they go into their homes. What do
you think the people being told to shelter in place are going
to do if they hear their neighbors in the next zone being told
to get away from the plume? The answer is they are going to
run. Roads are all going to be clogged. Traffic accidents are
going to occur. People will get sick and die.
The guidebook is a very curious document. Neither the Army
nor FEMA has been willing to publicly endorse it or validate
its recommendations or assumptions. Yet they expect us to
follow it in every respect. Last week all five commissioners
sent a letter to Governor Don Seigelman asking him to halt the
implementation of the guidebook. In that letter we pointed out
that the guidebook was based on a series of false assumptions.
The most troubling of these assumptions was the guidebook's
use of the Army's totally outdated and inaccurate toxicity
thresholds for sarin and VX. A 1997 National Research Council
criticized the Army's proposal to drop the 50 percent lethality
threshold for sarin for healthy male soldiers from 70
milligrams per minute per cubic meter, which reflected the
Army's overall kill strategy, to 35 milligrams per minute per
cubic meter. The National Research Council (NRC) stated the 50
percent lethality threshold should be dropped much further,
noting 1 percent lethality for healthy male soldiers at 40
milligrams per minute per cubic meter. The Army has never
adopted the 35 milligram standard, nor has the guidebook.
During a 1998 hearing before the Alabama Department of
Environmental Management, Army witnesses admitted that if the
NRC's proposed new toxicity thresholds for GB for healthy male
soldiers were applied to the general population, the toxicity
threshold would be much lower. Army witnesses also admitted
that, based on the NRC's recommendations, if the 1 percent
lethality threshold for GB were translated from healthy male
soldiers to the general population the 1 percent lethality
standard would be just 2 milligrams per minute per cubic meter.
Yet the guidebook assumes the 1 percent lethality threshold
to be at 10 milligrams per minute. Thus when the Army tells us
to follow the guidebook's recommendations they are asking our
citizens to be placed at risk of serious injury or even death.
We cannot and we will not do that.
The guidebook assumes that 38 facilities in Calhoun County,
these schools and hospitals that I mentioned earlier, have been
overpressurized, a vital factor in deciding whether citizens in
a zone should be recommended to shelter or evacuate. Instead,
FEMA has only authorized nine facilities, for collective
protection, and with the incinerator less than a year away from
the scheduled start work has started on only five, on only five
pressurized facilities.
The guidebook assumes no additional dosage to sheltered
populations once they leave their home. That is true for sarin,
but it is false for the other two agents stored at Anniston
Army Depot, VX and HD. Plumes of VX or HD leave significant
deposits of vapor and they create a very serious residual
hazard for long periods of time.
Finally, the guidebook assumes dosage levels are applicable
to only healthy male adults or only healthy adults. This
assumption means weaker regiments of the local population--
children, senior citizens like myself, individuals with
debilitating illnesses, people confined to a wheelchair or a
bed--will likely be subjected to far more serious and
potentially fatal dosages.
Of course, the population in many sections of the county
already face the added problem of having been exposed to large
amounts of the Polychlorinated Biphenyls (PCB's) over an
extended period of time, thereby raising the real issue of
damaged immune systems.
Mr. Chairman, our commission has developed a 13-point
checklist which we expect the Army and FEMA to implement if we
are ever going to assist the Federal Government in providing
maximum protection. The list is a sensible one and the items
are not negotiable. The Army knows all the items on the list,
as do the members of the Alabama delegation.

PREPARED STATEMENT

If we cannot get these safety items funded, we cannot go
forward in this effort. We will have to turn the keys to the
local EMA over to the State or to FEMA and let them decide what
to tell our citizens. But we will reserve our right to take
legal action to make certain the maximum protection standard is
met.
[The statement follows:]

PREPARED STATEMENT OF JAMES ELI HENDERSON

Mr. Chairman, Senator Shelby, and Members of the Subcommittee, my
name is Eli Henderson, and I am a Commissioner in Calhoun County,
Alabama. My district encompasses the area around the Anniston Army
Depot where 2,500 tons of deadly chemical agents are stored in the
middle of a population center. There are more than 76,000 people
residing in the Calhoun County Immediate Response Zone, a radius of 9.5
miles around the chemical weapons stockpile at AAD.
In sum, my constituents are at ground zero.
Our Commission is involved because we operate the local Emergency
Management Agency. The Army says it will destroy the 2,500 tons of
deadly agents, but they refuse to assume any liability off-post, refuse
to make any final decisions regarding what emergency action our county
should take, and are only willing to make a protective action
recommendation based on a faulty Guidebook they want us to implement.
When the Army came to Anniston years ago to seek approval for the
incinerator, I was one of the Army's biggest supporters. I am a former
Marine. I believe in a strong national defense. I know how dangerous
the agents stored at AAD are because for ten years I worked at the
Depot maintaining the stockpile.
When the debate raged about whether to build the incinerator or
seek alternative technologies, I stood shoulder to shoulder with the
Pentagon. I believed the Army when they told our community they would
provide us with maximum protection. I believed them when they said the
incinerator was failproof. I believed them when they told us the
destruction would be done on a ``no effects'' basis, meaning exposure
to agent would be so low that we would have no adverse health effects.
I believed them when they told us they would provide us with the
federal funds necessary to collectively protect our schools, hospitals,
senior citizens centers and nursing homes so that our citizens would be
shielded from these deadly agents. And I believed them when they told
us that we would have sufficient time to evacuate.
Events during the past two years have shown that I was wrong. The
Army misled the citizens of Calhoun County. The failproof technology
they promised us does not exist. The incinerator at Johnson Atoll
leaked five times. After a thousand design modifications, the Army
constructed a second incinerator at Tooele Utah. Despite promises the
technology has been perfected, the Tooele incinerator leaked 42
milligrams of sarin on May 7th of last year.
The accident was due to a number of factors, but human error was
the biggest problem, and human error can never be eliminated. The State
of Utah shut the incinerator down for the fourth time in five years. In
the month before the leak there were 38 false alarms, a dozen of
unknown origin. The operator illegally attempted to restart the furnace
and waited four hours before notifying local emergency personnel.
So much for a failproof technology.
Regarding the ``no effects'' standard, our community was always
told we would never be exposed to agents at a level that would affect
our health. That promise was made repeatedly during the Army's campaign
to gain the community's support. That promise continued while the
contractor secured the construction permit. Then, last year, after more
than $750 million had been spent, and the facility was more than 90
percent complete, we were given a copy of the Alabama CSEPP Guidebook.
This Guidebook contains the protective actions recommendations which
the Army and FEMA wants us to tell our citizens to take in the event of
an accident.
The Guidebook caught us totally off guard because instead of the
``no effects'' standard we have promised our citizens, it contained a
new, weaker standard of ``no deaths''. And, when you read the fine
print in the footnotes, and even weaker standard of ``1 percent
lethality''.
So much for promise of no effects.
And the Guidebook contained another disturbing change. Instead of
the long promised evacuation option our citizens had been practicing
for the past decade, the Guidebook analyzed thousands of potential
scenarios and concluded that, in more than 95 percent of the situations
studied for people living in the Anniston-Oxford-Saks-Weaver population
center, there would not be sufficient time to evacuate. The Guidebook
instead recommended we tell our citizens in the population centers to
``shelter in place''.
According to last year's letter from the Depot's Commander, shelter
in place means--and I am quoting:
--Stay Calm
--Stay inside, or go inside if you are outside
--Close all doors to the outside, and close and lock all windows
--Turn off all air conditioning, heating exhaust and ventilation
systems and fans. Do not place the system on recirculate
--If there is a fireplace, extinguish the fire and close the damper
--Close as many internal doors as possible in home or other buildings
--Close all garage doors in attached garages, as well as door
normally left open for ventilation
--Go into a central room with the least number of windows, such as a
bathroom or interior closet
--Take an AM/FM radio. Keep your radio on and tuned to EAS station
--Stay calm and move as little as possible. Activity increases the
speed of breathing, which leads to greater exposure to any
vapors which might seep into the room
--If you suspect that vapor has entered your structure, hold a wet
cloth over your nose and mouth.
At the same time, the Guidebook recommends our EMA tell citizens
living outside the population center that they evacuate as soon as
possible. Think about that. The leaking agent is so toxic that people
ten, twenty, thirty even forty miles away need to evacuate, but people
in downtown Anniston will be just fine if they go into their homes.
What do you think the people being told to ``shelter in place'' are
going to do so if they hear their neighbors in the next zone being told
to get away from the plume? The answer is they are going to run. Roads
are going to be clogged. Traffic accidents are going to occur. People
will get sick and die.
The Guidebook is a very curious document. Neither the Army nor FEMA
has been willing to publicly endorse it or validate its recommendations
or assumptions. Yet they expect us to follow in every respect. Last
week all five Commissioners sent a letter to Governor Don Siegelman
asking him to halt the automation of the Guidebook. In that letter, we
pointed out the Guidebook was based on a series of false assumptions.
The most troubling of these assumptions was the Guidebook's use of the
Army's totally outdated and inaccurate toxicity thresholds for Sarin
and VX.
A 1997 National Research Council Report criticized the Army's
proposal to drop the 50 percent lethality threshold for Sarin for
healthy male soldiers from 70 milligrams per minute per cubic meter,
which reflected the Army's ``overkill'' strategy, to 35 milligrams per
minute per cubic meter. The NRC stated the 50 percent lethality
threshold should be dropped much further, noting 100 percent lethality
for health male soldiers at 40 milligrams per minute per cubic meter.
The Army has never adopted the 35 milligram standard, nor has the
Guidebook.
During a 1998 hearing before the Alabama Department of
Environmental Management, Army witnesses admitted that, if the NRC's
proposed new toxicity thresholds for GB for healthy male soldiers were
applied to the general population, the toxicity threshold would be much
lower. Army witnesses also admitted that based on the NRC's
recommendations, if the one percent lethality threshold for GB were
translated from healthy male soldiers to the general population, the
one percent lethality standard would be just two milligrams per minute
per cubic meter.
Yet, the Guidebook assumes the one percent lethality threshold to
be 10 milligrams per minute. Thus when the Army tells us to follow the
Guidebook's recommendations, they are asking our citizens to be placed
at risk of serious injury or even death. We cannot--and we will not do
that.
The Guidebook assumes that 38 facilities in Calhoun County--those
schools and hospitals I mentioned--have been overpressurized, a vital
factor in deciding whether citizens in a zone should be recommended to
shelter or evacuate. Instead FEMA has only authorized nine facilities
for collective protection and, with the incinerator less than a year
away from the scheduled start, work has started on only five.
The Guidebook assumes no additional dosage to sheltered populations
once they leave their home. That is true for Sarin, but it is false for
the other two agents stored at AAD: VX and HD. Plumes of VX or HD leave
significant deposits of vapor and they create a very serious residual
hazard for long periods of time.
Finally, the Guidebook assumes dosage levels are applicable to only
the healthy adults. This assumption means weaker regiments of the local
population--children, senior citizens, individuals with debilitating
illnesses, people confined to a wheelchair or bed--will likely be
subjected to far more serious and potentially fatal dosages.
Of course, the population in many sections of the County already
face the added problem of having been exposed to large amounts of PCBs
over an extended period of time, thereby raising the real issue of
damaged immune systems.
Mr. Chairman, I ask unanimous Consent that the Commission's April
18, 2001 letter to Governor Seigelman detailing our objections to the
Guidebook's automation be including into the record at this point.
Mr. Chairman, our Commission has developed a thirteen point check
list which we expect the Army and FEMA to implement if we are going to
assist the federal government in providing maximum protection. The list
is a sensible one and the items are not negotiable. The Army knows all
the items on the list, as do the members of the Alabama delegation. If
we cannot get these safety items funded we cannot go forward in this
effort. We will have to turn the keys to the local EMA over to the
State or to FEMA and let them decide what to tell our citizens. But we
will reserve our right to take legal action to make certain the maximum
protection standard is met.
Finally, Mr. Chairman, our Commission has requested impact funds to
the County to compensate us for having endured 2,500 tons of deadly
agents for the past forty years, for the continuing negative effects
they have on our local economy and our business development, and for
the risks we will assume over the next decade during the destruction
process. Your colleague, Senator Sessions, is working hard at the Armed
Services Committee on this issue. I realize the real power resides here
in this Subcommittee which controls every dime the Pentagon spends.
Our senior Senator who sits on this subcommittee and who had the
wisdom to ask for this hearing will, I believe, ultimately be able to
resolve all of these thorny problems.
I thank you and would be happy to answer any questions you may
have.

Senator Stevens [presiding]. Can I interrupt there? Have
you got a list? How much money are you asking for?
Mr. Henderson. I have got one more page, Mr. Chairman.
Senator Shelby. He said how much money? How much money?
Mr. Henderson. That we are asking for?
Senator Stevens. Yes, sir.
Mr. Henderson. Can I read this last page and I will get
into that?
Senator Stevens. Yes, sir.
Mr. Henderson. They compensate us for having endured 2,500
tons of deadly nerve agent for the last 40 years, for the
continuing negative effects they have on our local economy and
our business development, and for the risks we will assume over
the next decade during the destruction process, your colleague
Senator Sessions is working hard on the Armed Services
Committee on this issue. I realize the real power resides right
here in this committee, which controls every dime the Pentagon
spends. Our senior Senator, who sits on this committee and who
had the wisdom to ask for this hearing, will I believe
ultimately be able to resolve all these thorny problems.
I thank you and would be happy to answer any questions you
may have. How much money are we asking for?
Senator Stevens. Yes, sir.
Mr. Henderson. That is a tough question. We estimated for
the impact funds alone for our community to provide some
infrastructure for the evacuation routes and some other items
would be around $70 million. Please take into consideration,
Mr. Chairman, that we have got, again, we have got a huge--not
a huge population I guess related to Washington, D.C., but in
our area, as Senator Shelby well knows, we have got 75,000
people roughly in a 10-mile radius.
We have a terrible time--we would have a terrible time
evacuating our community as things now exist.
Senator Stevens. How many communities are within that zone
of harm, just one?
Mr. Henderson. This whole area right here is in--our
community is in the pink zone practically. We have got six pink
zones and the people actually in our community right there, it
is densely populated. Probably the whole community or at least
I think six zones are in the pink zones. So I would say 65,000
people are in that immediate area.
Senator Stevens. Are you seeking that amount of money
annually or what is the time frame for that money?
Mr. Henderson. That would be nice, if we could get that. We
would have to talk to our EMA director and my fellow
commissioners. We have talked about this issue for years. That
would be something we would probably hopefully get with Senator
Shelby about and maybe Senator Sessions and Congressman Reilly,
that we could sit down and talk about hopefully.
Senator Stevens. Senator, I would like to talk to you about
that.
I do think you make a tremendous point about preparedness.
We cannot depend totally upon FEMA to be able to finance that
unless we put some money somewhere to help you. But I would
like to talk about that, Senator.
Do you have a similar problem, Senator McConnell?
Senator McConnell. Yes.
Senator Stevens. How many communities are within the zone
of harm there in your State?
Senator McConnell. Well, it is not too far from Lexington,
which has by Kentucky standards a very large population. What
is the population of Madison County, Craig?
Mr. Williams. In the IRZ, the immediate response zone, it
is about 55,000 people.
Senator Shelby. Similar.
Mr. Henderson. Very similar.
Mr. Williams. To what Mr. Henderson referred to as the pink
zone.
Senator McConnell. Yes. We have got an elementary school
right there as well.
Senator Shelby. Mr. Kinney, do you want to go, or Ms.
Lindell?
Mr. Kinney. Ladies first.
Senator Shelby. Your written statement was made part of the
record. If you all want to just move along and give a synopsis
of your statement, it would move the committee along.

STATEMENT OF BRENDA LINDELL ON BEHALF OF FAMILIES
CONCERNED ABOUT NERVE GAS INCINERATION,
ANNISTON, ALABAMA

Ms. Lindell. Mine is not that long. I talk slowly, though,
because I am from the South.
I want to thank you, Senator Shelby. This hearing has been
a godsend, and I pray that you help us. My name is Brenda
Lindell. I have been a resident of Anniston, Alabama, for more
than 19 years. I am a founding member of Families Concerned
About Nerve Gas Incineration, otherwise known as ``Families.''
I have studied and been involved with the issue of chemical
weapons for more than 9 years. During this time I have learned
a lot about issues that I never thought I would in raising
three children in Anniston.
So the citizens of the surrounding area of the Anniston
Army Depot where the chemical weapons are stored have no say
into how the chemical weapons were to be destroyed. Until 1991
when the Army declassified the stockpile, many citizens,
including myself, were unaware that chemical weapons were even
stored at Anniston Army Depot.
By the time PMCD, the program manager for chemical
demilitarization, had decided to use on-site incineration as
the method to destroy the chemical weapons, instead of seeking
input from the community, the Army made a decision, then
presented it to us as a done deal.
Coming from the perspective of a concerned citizen of
Alabama, hearings are held merely as a formality. Input from
citizens does not make a difference. For example, in Utah there
was one public hearing held for all the sites to be permitted
to burn PCB's in the incinerator. The EPA told us a hearing
would be held in Anniston after the permit was issued, not
before.
Raising concerns after the fact does not seem to have any
effect. So if outside input does not have any effect, what
about internal input from the people who work on the project
but have concerns? There have been three high level managerial
whistleblowers that have come out of the Tooele facility.
The first was Steve Jones, who was chief of public safety;
Trina Allen, chief of hazardous waste operations; and Gary
Harris, the chief permit coordinator. In addition to that, Gary
Millar, the EG&G plant manager of the facility, wrote a lengthy
12-page letter voicing his concerns about the safety of the
facility, citing it as an accident waiting to happen. All of
these have stated that the facility is not safe and have voiced
numerous safety concerns.
Unfortunately, the Tooele facility continues to operate. So
it would appear that external and internal forces cannot really
do anything to change how these thousands of tons of chemical
weapons are disposed. This almost juggernaut approach is seen
in the permitting process itself. Instead of a pass-fail test
like we all had in schools, incinerators are allowed to attempt
trial burns repeatedly until they are successful. Then they are
permitted to burn for years on this one-time trial result.
No chemical weapons incinerator has ever successfully
passed a PCB trial burn. The Utah incinerator has been plagued
by technical problems, chronic malfunctions, and repeated
shutdowns. This is typical of incineration performance
nationally.
The Anniston area is a community that is already heavily
contaminated with PCB's due to Monsanto, now known as Solutia,
illegally dumping the chemical for decades. Many citizens are
already burdened with PCB's. Lead and mercury are also a
contamination problem there. Recently we learned that the
agents to be burned in the incinerator are at least twice as
toxic as originally believed.
Taken together, this poses severe problems for more than
the 75,000 people who live in the immediate response zone. Even
if everything goes as promised with the incinerator, we will be
exposed to many toxins and chemical agents being emitted from
the incinerator for around 4 years, according to Army
statistics. According to the data supplied by PMCD in the
environmental impact statement, there is a list of more than
100 toxins that will be emitted from the incinerator in good
working order.
Information obtained by the Chemical Weapons Working Group
indicates that the incineration process in Anniston will take
longer than the Army has told us, probably three times as long.
The implications of this prolonged exposure to toxins are a
major health concern. The incinerator operates using large
volumes of heat and air flowing through it. If there is ever an
accident, there is nothing that can be done to stop the agent
from reaching the community. The alarms will sound when the
agent leaves the stack. There will not be enough time for
people to evacuate and there will be chaos and panic. The
community will have less than 8 minutes to respond.
If an accident occurs during rush hour, people will not
have time to get to an enclosed structure. Maybe this is why
PMCD recently changed their standard from no deaths instead of
no exposure.
The best way to protect the community is to use a
technology that has no smokestack. Incineration uses high
temperature, high pressure. Neutralization uses low
temperature, low pressure. Neutralization allows for the
operator to be able to make a test release. An incinerator does
not. Neutralization allows for analysis of effluents each step
of the way before these effluents are released into the
environment. Neutralization is a controllable technology.
Incineration is not. By being controllable, neutralization
allows for the lowest potential of releasing toxins into the
environment.
As someone that lives in the immediate response zone in
Anniston, my family and I have the most at stake in the Federal
Government's decision about how these chemical weapons are
destroyed. I urge you to consider the health and safety needs
of our community, but this should be done at more than my
urging. The Federal Government has a statutory duty to provide
maximum protection.
Senator Shelby, you mentioned early about costs. This has
no budgetary constraints. Maximum protection was not mandated
by budget. It has an open budget for the health and safety of
the citizens. This subcommittee should make sure that that duty
is met.
I believe only a safer method of destruction than
incineration can accomplish this goal. Fortunately, we do have
time if we act now. All reports today by SBCCOM, which is
Soldier Biological Chemical Command, show the storage
capabilities are stable through the year 2043. This allows time
for implementation of a safer technology. It does not mean you
have to start over from scratch. The incinerator can be
retrofitted. The alternative technologies were designed with
that in mind, so they can use the footprint of the incinerator.
The safety of our community outweighs everything.

PREPARED STATEMENT

Just a P.S. from earlier comments about the Centers for
Disease Control (CDC): It is funded by the Pentagon.
Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF BRENDA LINDELL

Mr. Chairman. Senator Shelby, and Members of the Subcommittee: My
name is Brenda Lindell. I have been a resident of Anniston, Alabama,
for more than 19 years. I am a founding member of Families Concerned
About Nerve Gas Incineration, or Families. I have studied and been
involved with the issue of chemical weapons for more than 9 years.
During this time, I have learned a lot about issues I never thought I
would face while raising our three children in Anniston.
The citizens of the surrounding area of Anniston Army Depot (AAD),
where the chemical weapons are stored, had no say into how the chemical
weapons were to be destroyed. Until 1991 when the Army de-classified
the stockpile, many citizens were unaware that chemical weapons were
even stored at AAD. By that time PMCD (Program Manager for Chemical
Demilitarization) had decided to use on-site incineration as the method
to destroy the chemical weapons. Instead of seeking input from the
community, the Army made a decision, then presented it to us as a done
deal.
Coming from the perspective of a concerned citizen in Alabama,
hearings are held merely as a formality. Input from citizens does not
make a difference. For example, in Utah there was one public hearing
held for all the sites to be permitted to bum PCBs in the incinerator.
The EPA told us a hearing would be in Anniston after the permit was
issued, not before. Raising concerns after the fact doesn't seem to
have any effect.
So if outside input doesn't have any effect, what about internal
input from people who work on the project but have concerns? There have
been 3 high level, managerial whistleblowers that have come out of the
Tooele facility. They are: Steve Jones, chief of safety operations,
Trina Allen, chief of hazardous wastes operations, and Gary Harris,
chief permit coordinator. In addition, Gary Millar, the EG&G plant
manager, wrote a lengthy letter voicing his concerns about the safety
of the facility, citing it as an accident waiting to happen. All have
stated that the facility is not safe, and have voiced numerous safety
concerns. Unfortunately, the Tooele facility continues to operate.
So it would appear that external and internal forces can't really
do anything to change how these thousands of tons of chemical weapons
are disposed. This almost juggernaut approach is seen in the permitting
process itself. Instead of a pass/fail test like we all had in school,
incinerators are allowed to attempt trial bums repeatedly until they
are successful. Then they are permitted to bum for years on this one-
time trial result. No chemical weapons incinerator has ever
successfully passed a PCB trial bum. The Utah incinerator has been
plagued by technical problems, chronic malfunctions, and repeated shut
downs. This is typical of incineration performance nationally.
The Anniston area is a community that is already heavily
contaminated with PCBs due to Monsanto illegally dumping the chemical
for decades. Many citizens are already burdened with PCBs. Lead and
mercury also are a contamination problem there. Recently, we learned
the agents to be burned are at least twice as toxic as originally
believed.
Taken together this poses severe problems for the more than 75,000
people who live in the Immediate Response Zone.
Even if everything goes as promised with the incinerator, we will
be exposed to many toxins and chemical agents being emitted from the
incinerator for around 4 years. According to the data supplied by PMCD,
there are more than 100 toxins that are listed in the Environmental
Impact statement. However, information obtained by the Chemical Weapons
Working Group indicates that the incineration process in Anniston will
take longer than the Army has told us--probably 3 times as long. The
implications of this prolonged exposure to these toxins are a major
health concern.
The incinerator operates using large volumes of heat and air
flowing through it. If there is ever an accident, there is nothing that
can be done to stop the agent from reaching the community. The alarms
will sound when agent leaves the stack. There will not enough time for
people to evacuate and there will be chaos and panic. The community
will have less than 8 minutes to respond. If an accident occurs during
rush hour, people will not have time to get to an enclosed structure.
Maybe this is why PMCD recently changed their standard to ``no deaths''
instead of ``no exposure''.
The best way to protect the community is to use a technology that
has no smokestack. Incineration uses high temperature/high pressure.
Neutralization uses low temperature/low pressure. Neutralization allows
for the operator to be able to make a test-release. An incinerator does
not. Neutralization allows for analysis of effluents each step of the
way, before these effluents are released into the environment.
Neutralization is a controllable technology. Incineration is not. By
being controllable, neutralization allows for the lowest potential of
releasing toxins into the environment.
As someone living in the IRZ in Anniston, my family and I have the
most at stake in the federal government's decision about how these
chemical weapons are destroyed. I urge you to consider the health and
safety needs of our community. But this should be done at more than my
urging. The federal government has a statutory duty to provide
``maximum protection''. This subcommittee should make sure that duty is
met. I believe only by a safer method of destruction than incineration
can this be accomplished.
Fortunately we have time if we act now. All reports to date by
SBCCOM (Soldier, Biological, Chemical Command) show safe storage
capabilities through the year 2043. This allows time for implementation
of a safer technology. It does not mean you have to start over from
scratch. The incinerator can be retrofitted. The safety of the
community outweighs everything.
Thank you.

Senator Stevens. Mr. Kinney.

STATEMENT OF RUFUS KINNEY ON BEHALF OF FAMILIES
CONCERNED ABOUT NERVE GAS INCINERATION,
ANNISTON, ALABAMA

Mr. Kinney. Mr. Chairman, Senator Shelby, members of the
committee: My name is Rufus Kinney and I am an English
instructor at Jacksonville State University in Jacksonville,
Alabama, which is in Calhoun County about 12 miles downwind of
the incinerator. I greatly appreciate the opportunity to
address you this morning and I thank you for all of your
efforts in this vital issue. I especially want to thank you,
Senator Shelby, for responding to the concerns of your
constituents on this issue and for your positive leadership on
this issue. Thank you so very much.
You know I have a lengthy statement and I am a verbose
person, so I am going to cut the whole thing in two real quick.
I know that is what you want me to do.
One brief note about expenses. The incinerator sits at the
Anniston Army Depot today, its construction virtually complete.
U.S. taxpayers have spent about a billion dollars for this
facility that was originally supposed to cost $350 million. It
contains multi-million dollar systems that have already been
abandoned, already obsolete, never going to be used--a
monumental waste of taxpayers' money--reduction area, dunnage
incinerator, never going to be used.
The gelled rockets, they are going to wing it on the gelled
rockets. Let me put it this way. There is no equipment designed
to treat gelled rockets in this incinerator. Yet 30 percent of
the rockets stored at Anniston are gelled rockets. So good luck
on the efficiency for that.
This incinerator is already demonstrably, already
demonstrably inefficient, out of date, a huge waste of money,
and it has yet to become operational. That is one thing I
wanted to say.
A second thing is about safety concerns. My concerns about
safety have already been articulated very well by Mr. Henderson
and Mrs. Brenda Lindell. I just want to say this as a father
and a husband with a family. I am deeply concerned about my
family and especially my wife and my children, my 12 year old
and my 10 year old, with this business we can expect exposure
but no fatalities.
What if my children get exposed but do not die? What kind
of suffering are they going to go through, for how long and at
what cost? That is just not acceptable.
As far as response in an emergency, that has already been
articulated, but I want to show you the Army's plan. Here is my
shelter in place kit, and the Army has suggested distributing
these to the 75,000 people, however many, 30,000 homes in
Calhoun County that are downwind of this incinerator. Mr.
Henderson has already read the instructions, but I will show
you what is inside. $130 million went to pay for this.
We have got duct tape and plastic and scissors. Now, the
duct tape and plastic appear to be of the finest quality. The
scissors look a little cheap, but I guess you have got to cut
corners wherever you can.
This is maximum protection for 75,000 people, and 35,000 of
them live within a 2-mile radius of this incinerator.
Senator Shelby. What would the duct tape be, to tape up the
doors and windows?
Mr. Kinney. Well, you can use the duct tape to hold the
plastic sheeting over the doors and windows, and then you put a
wet towel under the doors and have a wet rag.
Senator Shelby. Is this all going to be in 8 minutes or 5
minutes?
Mr. Kinney. In 8 minutes. So I do not know if you carry it
with you. I do not know if we carry it with us when we are
outside. We are not told what to do if we are outside.
Senator Shelby. Mr. Chairman.
Senator Stevens. Could I ask one question? Are there any
kind of gas masks that are effective against these gases?
Mr. Kinney. Mr. Williams can answer that. I know that they
decided a long time ago not to give us gas masks. They were
talking about giving gas masks to everybody in Calvert County
and they decided they would not do that.
Mr. Henderson. Mr. Chairman, I would like to answer that
question. I wore a gas mask for 10 years. You have got to be
personally fitted for a gas mask. You cannot just get one and
put it on. Everyone would have to be personally fitted. Almost
half the population could not wear one because of the breathing
apparatus.
Senator Stevens. Well, I asked that. You know, during the
Gulf War some of us were in Israel when the Scuds came in and
they put gas masks on us and put us in a room and they sealed
the inside like you're suggesting, with duct tape and plastic.
We stayed there for a few hours, until they told us that there
was no nerve gas in what was exploded outside.
But the implication was that those gas masks would do some
help. Have they ever explored that as far as you all are
concerned?
Mr. Kinney. They talked about it several years ago and
rejected the idea, and I do not think it would be real good for
public relations (PR) for the community: You move to Anniston,
Alabama, and get your gas mask. Who is going to move to
Anniston, Alabama, and get their gas mask and live their life
in that way? I think you see what I mean. It is just not--it
cannot be done.
Senator Stevens. How many are going to stay there after
this hearing?
Mr. Kinney. Not many. They are already leaving. They are
already leaving, and that is part of my--I will go to the
second part of my address. The thing that I have to talk about
that has not been discussed very much is--and this is my second
major area of concern besides safety. It has to do with the
possible negative health effects on the people and their
children of constant low-level emissions of poison from the
smokestack during routine operations of the incinerator.
The stack emissions sheet, which I am holding up and which
you have in your record, was done at Johnston Atoll Chemical
Agent Disposal System (JCADS) for the final testing for
Anniston, so these are the emissions that would be coming out
of the stack during routine operations of the incinerator.
These emissions include PCB's, dioxins, furines, heavy metals
including lead and mercury and arsenic, trace amounts of the
nerve agents GB, HD, HT, and VX, and hundreds if not thousands
of other poisons.
This will impact our health directly and a large number of
agribusinesses, mostly Tyson Chicken farms and beef cattle
farms and a major food processing plant in Anniston. Anniston
is a city that has already been visited by a great deal of
poisoning over the years as a result of the operations of a
Monsanto, now Solutia, chemical plant in the same part of town
as the incinerator, a plant that produced PCB's for several
decades. Anniston is the most PCB-poisoned community in
America.
I am holding up the June 19, 2000, issue of U.S. News and
World Report, and you also have that in your packet, whose
cover story says: ``Kids at Risk: New Evidence Points to a Link
Between Environmental Poisons and Learning Disabilities.'' This
cover story focuses on Anniston and explores the chemical
poisoning of our children. Scientific studies now link
environmental poisons with learning disabilities in America's
children stemming from PCB poisoning, lead poisoning,
pesticides, and mercury poisoning.
Regarding Anniston in particular, the article reports that
the Monsanto-Solutia plant for decades ``saturated west
Anniston with polychlorinated biphenols.'' PCB's have long been
linked to cancer. More recently, however, researchers have
discovered evidence tieing the compounds to a lack of
coordination, diminished Intelligence Quotient (IQ), and poor
memory among children.
Anniston has the highest level of PCB contamination in
children ever tested anywhere. Why in the name of sanity would
the community with the Nation's highest level of PCB poisoning
have its children subjected to a constant flow of PCB's from an
additional source, 24-7, 365 days a year, for how many years?
Anniston has become what is known as a human sacrifice
zone. A human sacrifice zone is a community that is deeply
poisoned, has long been poisoned, cannot seem to get itself
cleaned up, and can only seem to attract poisoning industries.
A human sacrifice zone is shunned by professional people and
families with children.
This is what caused Anniston to land at the bottom of the
heap of American cities a couple of years ago in a survey done
by Money magazine. We are posing population. There is
widespread poor health. I could talk about it for an hour. Home
and property values are plummeting. Anniston was the only major
city in Alabama to lose population during the decade of the
1990's. See, we are already losing it. Anniston is becoming an
even more unhealthy place to live. Do not do this to the
children of Anniston.

PREPARED STATEMENT

I am now ready to conclude. I urge the U.S. Senate to pull
back from this incineration program and let advanced
alternative technologies have every opportunity to show what
they can do. Give ACWA full funding. We need technology that
can do the job safely, with minimal risks to the community, and
that will be a closed loop system that by law cannot release
poisons into the community.
Senators, thank you for doing the right thing from the
citizens of Alabama, especially for the children.
[The statement follows:]

PREPARED STATEMENT OF RUFUS KINNEY

Mr. Chairman, Senator Shelby, and Members of the Committee: My name
is Rufus Kinney and I am an English instructor at Jacksonville State
University in Jacksonville, Alabama.
Mr. Chairman, I'd like to begin with a brief mention of the
incinerator itself as it sits at the Anniston Army Depot, its
construction virtually complete. The U.S. taxpayers have spent about $1
billion for a facility that was originally supposed to cost $350
million. That incinerator is not what was originally permitted by the
Alabama Department of Environmental Management in June 1997. Systems at
the plant, costing millions, have already been abandoned. This is a
monumental waste of taxpayers' money. There is no data to show that
this so-called state-of-the-art incinerator can safely destroy jelled
rockets, yet jelled rockets compose 30 percent of the rockets stored in
Anniston. The Army plans to stick the jelled rockets into the
deactivation furnace, which was designed to be utilized for other
purposes, and good luck! When jelled rockets are burned, the feed rate
will go down from 40 per hour to 1 per hour, and that's about as
inefficient as you can get. This kind of incinerator is demonstrably
inefficient, out-of-date, a huge waste of money, and it has yet to
become operational.
The two major areas of concern I have are first, safety, and
second, the possible negative health effects on the people of Anniston
and Calhoun County, and their children, of constant low-level emissions
of poisons from the smokestack during routine operations of the
incinerator.
Regarding safety, or emergency response, a November 1985
Congressional Directive (Public Law 99-145) relating to the chem
weapons demilitarization program requires ``maximum protection for the
environment, the general public, and the personnel who are involved in
the destruction of the lethal chemical agents and munitions.'' This
mandate has been reaffirmed several times and has the force of law.
But, on June 20, 2000 in Montgomery the Alabama Department of
Environmental Management (ADEM) denied the incinerator permit appeal of
Families Concerned about Nerve Gas Incineration and Serving Alabama's
Future Environment.
One of the most important aspects of the appeal was its insistence
on a strong, workable contingency plan in case of an accident at the
incinerator, a plan that would insure the safety of our children.
In total contradiction of Public Law 99-145, cited above, ADEM's
unconscionable action freed the Army of any legal requirements to
respond in an emergency beyond simply advising residents to stay at
home, close windows, and turn off central air. The Calhoun County
Commissioners' meeting with Army representatives on June 14, 2000,
which I attended, clearly affirmed that indeed the Army intends to do
nothing more than the absolute minimum. Thirty-five thousand people
live within a two-mile radius of the incinerator. Seventy-five thousand
reside in the Immediate Response Zone, a radius of 9.2 miles. After
spending $120 million of taxpayer money in Alabama on this program,
here is your protection: duct tape and plastic. Lt. Col. Paula Lantzer
said, ``They seem a bit simplistic, but we've done studies and these
are very effective shelters.''
After ten years of telling us to evacuate in an emergency, at the
last minute, and with construction on the incinerator 80 percent
complete, ten years of emergency planning are thrown out the window
just as the Army learned that ADEM will absolve it of any further
responsibilities. Thanks, ADEM. Now we can sit in our homes and hold
our breath in an emergency! The Alabama Department of Management is a
disgrace.
Special assistant to the Secretary of the Army Denzel Fisher
shocked everyone present at the Commissioners' meeting with the
revelation that the Army expects people will be exposed to agent, but
likely won't die from it, at least at the time of the initial exposure.
``Our objective is to have zero fatalities. That doesn't mean we won't
have exposure,'' stated Fisher. In view of the nerve agent release at
Tooele 1 month earlier, which we were guaranteed would never happen,
could never happen, I suppose Fisher felt it would be best to be
candid.
Personally, I wonder what it would be like for my children to be
exposed, yet survive. What kind of pain and illnesses might they
endure. and for how long and at what cost emotionally and financially?
And who would pay for their medical expenses?
There's more. For ten years the Army promised us that if we'd just
let them build the incinerator they'd never attempt to bring in one
ounce of additional stuff to burn in it. But in fact, just 1 month
after they received ADEM's permit to build in June 1997, PMCD
spokesperson Tim Garrett wrote a letter on U.S. Army stationery to ADEM
secretly seeking permission to bring in off-site conventional and non-
stockpile military munitions to burn in the incinerator. And he got a
lovey-dovey response from Gerald Hardy of ADEM, a pure attempt to turn
Anniston into a toxic dumping ground. This same Tim Garrett continues
to smile in our faces while he tells us to trust the Army!
ADEM's damnable ruling also lets Washington Group International, or
Westinghouse Anniston as it is known locally, off the hook. The
incinerator permit appeal requested reasonable compensation from the
contractor to victims of incinerator accidents, but ADEM disallowed it,
without discussion. The total liability of the contractor has been set
at one million dollars, the exact same amount as the liability
insurance held by my home appliance repairman for his one-man company!
Yet Washington International Group just announced it was not going to
file its annual 10-K form. Their stock has taken a nosedive and they
are on a credit watch.
This has left the Calhoun County EMA in a quandary. What kind of
workable, coherent plan can they use now? And how can they carry out
any kind of plan in view of the constant denials of their requests for
funding, staffing, and materials?
Toxicity levels are underestimated and out-of-date. Thus, risk
assessments can't validly be made by our local EMA.
The Calhoun County EMA originally requested that 133 buildings be
over pressurized to use in an emergency. That number was reduced by the
Army and FEMA to 37 and then to 9! And it includes only one school.
This is outrageous. This is not maximum protection. It isn't
protection at all--and through no fault of our county EMA or our county
commissioners. It just won't work. It seems to me that when the U.S.
Army chose to store these munitions on the edge of a large city instead
of some place where no one lives, it was taking upon itself an
obligation to be absolutely certain that no civilian resident ever be
harmed by living in proximity to those munitions. Obviously the Army
has utterly failed to carry out this responsibility.
My second major area of concern has to do with the possible
negative health effects on the people, and their children, of constant
low level emissions of poisons from the smokestack during routine
operations of the incinerator. The stack emissions include PCB's;
dioxins; furans; heavy metals including lead, mercury, arsenic; trace
amounts of the nerve agents GB, HD/HT, and VX; and hundreds if not
thousands of other poisons. This will impact our health directly and a
large number of agribusinesses, mostly Tyson chicken farms and beef
cattle farms, and a major food processing plant.
Anniston is a city that has already been visited by a great deal of
poisoning over the years. As a result of the operations of a Monsanto
(now Solutia) chemical plant in the same part of town as the
incinerator, a plant that produced PCB's for several decades, Anniston
is the most PCB-poisoned community in America. I am holding up the June
19, 2000 issue of U.S. News and World Report whose cover story says.
``Kids at Risk: New Evidence Points to a Link between Environmental
Poisons and Learning Disabilities.'' This cover story focuses on
Anniston, and explores the chemical poisoning of our children.
Scientific studies now link environmental poisons with learning
disabilities in America's children stemming from PCB poisoning, lead
poisoning, pesticides and mercury poisoning.
Regarding Anniston in particular, the article reports that the
Monsanto (Solutia) plant for decades ``saturated west Anniston with
polychlorinated biphenyls. PCBs have long been linked to cancer. More
recently, however, researchers have discovered evidence tying the
compounds to lack of coordination, diminished IQ, and poor memory among
children.'' Anniston has the highest level of PCB contamination in
children ever tested! Why in the name of sanity would the community
with the nation's highest level of PCB poisoning have its children
subjected to a constant flow of PCBs from an additional source?
Anniston has become what is known as a human sacrifice zone. A
human sacrifice zone is a community that is deeply poisoned, has long
been poisoned, can't seem to get itself cleaned up, and can only seem
to attract poisoning industries. A human sacrifice zone is shunned by
professional people and families with children. This is what caused
Anniston to land at the bottom of the heap of American cities.
We're losing population. There is widespread poor health. Home and
property values are plummeting. Anniston was the only major city in
Alabama to lose population during the decade of the 1990s. Anniston is
becoming an unhealthy place to live.
Don't do this to the children of Anniston.
I urge the U.S. Senate to pull back from this incineration program,
and let advanced alternative technologies have every opportunity to
show what they can do. Give ACWA full funding. We need technology that
can do the job safely, with minimal risk to the community, and that
will be a closed-loop system that by law can not release poisons into
the community.
Senators, thank you for doing the right thing for the citizens of
Alabama, especially for the children.

Senator Shelby. Mr. Salter, has there been a change of
policy from zero exposure to zero fatalities?
Mr. Salter. Sir, our policy statement number one, which is
more than 10 years old, indicates that there be no deaths as
the policy.
Senator Shelby. What about exposure? You know, we have been
talking about exposure.
Mr. Salter. Well, we are certainly concerned about the
exposure of the residents.
Senator Shelby. How concerned?
Mr. Salter. Concerned enough to work very closely with the
residents in and around the Anniston area to do whatever is
possible to protect them in the event that there is any kind of
release.
Senator Shelby. What should be the central issue that you
are facing here? Safety, is it not?
Mr. Salter. Yes.
Senator Shelby. Safety, safety, safety.
Mr. Salter. And public education, sir.
Senator Stevens. And what?
Senator Shelby. And public education?
Mr. Salter. Yes, sir.
Senator Shelby. Well, is that to alleviate their fears? Why
do we not just deal with safety and then if that is part of it,
fine.
Mr. Salter. We certainly want to make sure that the public
is protected. But a major part of that protection is the public
understanding the full picture and what to do in the event
there is a release.
Senator Shelby. Mr. Kinney, do you have a comment?
Mr. Kinney. Would you repeat that?
Mr. Salter. I said, the public safety certainly is one of
our utmost concerns in the CSEPP program. However, a major part
of readiness of the community in the event there is a release
is the public's understanding of what to do and the importance
of taking that protective action.
Senator Stevens. Mr. Salter, you heard the statistic Ms.
Lindell gave about the leaks from the other places in Utah and
Johnston Island?
Mr. Salter. There have been a number of stories about leaks
at different locations, leakers inside of the bunkers, yes, and
we are very concerned about the risks of storage as much as the
risk of incineration. Risk of storage is greater.
Senator Stevens. Who has the authority to order the place
shut down until it is perfected?
Mr. Salter. That would have to be the Department of the
Army or Department of Defense, sir.
Senator Shelby. The Secretary of Defense?
Mr. Salter. The Secretary of Defense, thank you.
Senator Stevens. Well, I do not know about the rest of you.
I am scared to hell by what you guys have just told me. I do
not understand this policy, and I thought we had straightened
this out years ago as a matter of fact.
How long since FEMA examined this place for the contingency
that might bring you into operation there? You would have a
contingency job there as an emergency management agency if
something went wrong down there, would you not?
Mr. Salter. Yes, sir, we would.
Senator Stevens. How long since you examined this place?
Mr. Salter. We have examined this place continuously over
the last 10 years and work very closely with the State and the
counties in putting the necessary protection in place.
Senator Stevens. Do you think that box that was just
demonstrated to us was enough to deal with this as far as the
families are concerned?
Mr. Salter. I think, depending on the location of the
residents, yes, sir, I do.
Senator Shelby. What about children on the playground?
Senator Stevens. Eight minutes? You can put that thing up,
that plastic up inside a house in 8 minutes?
Mr. Salter. Sir, again it depends on the location of the
residents, and 8 minutes is not necessarily the true picture.
In the case of those residences that are closer to the depot,
in a letter that we have provided to the county commissioners
on the 1st of February we indicated that we should include in
their shelter in place kits recirculation filter fans and
public education telling them to create a safe room in their
residence because they simply would not have time to do
anything else.
In addition to that, sheltering has been proven in a number
of instances in the past 10 to 20 years, that sheltering is a
protective action that works.
Senator Stevens. Any policy other than no emissions is
unacceptable. Any policy that puts people at risk of using
these instructions you have got is unacceptable. I am going to
tell you, I think we ought to all have a meeting with the
Secretary of Defense to tell him this is unacceptable.
I remember the hearings on Johnston Island and one of the
effects there was--that was on an island and there was very
little at risk. This is an enormous risk that I did not realize
your people were being exposed to. I am going to tell you, it
is unacceptable to us.
I can pledge to you both, Kentucky and Alabama, we will get
you some money so your people can start getting really ready
for this. But meanwhile the best thing we can do is to tell
them to shut the place down until we are sure of what we are
doing. Time is not the factor here. Time is not a factor.
Senator Shelby. Mr. Chairman, I appreciate that.
Senator Stevens. I think this continued exposure to your
people is unacceptable.
Senator Shelby [presiding]. I appreciate your comments, but
my concern has always been the safety of the people. That
should be paramount, period.
Senator McConnell.
Senator McConnell. So, gentlemen, thank you very much.
Thank you for asking for this hearing.
Senator Shelby. Thank you.
Senator McConnell. Well, the symbol of the Army's concern
about public input is the fact that they all got up and left
before your panel sat down to testify.
I am sure you all heard Mr. Bacon say in response to a
question from Senator Shelby that the demilitarization process
was 100 percent transparent. All of you who agree with that,
raise your hand.
Mr. Williams, in your testimony you referred to the task
force report in 2000, which I have here in my hand, which you
have provided to the subcommittee. Are you suggesting to us
that the Army has evidence that none of these sites can meet
the Chemical Weapons Convention deadlines?
Mr. Williams. Yes, Senator, that is exactly what this
report states. The treaty, as you know, requires us to complete
operations by April 2007.
Senator McConnell. Let me interrupt just for the benefit of
the people in the audience. This is a report, internal report
prepared by the Army, right?
Mr. Williams. Yes, Senator.
Senator McConnell. I see about one, two, three, four, five,
six, seven, eight, nine, ten signatures on this of people
inside.
Mr. Williams. Yes, sir.
Senator McConnell. This report says what about meeting the
Chemical Weapons Convention deadlines?
Mr. Williams. It says for the 2007 deadline that none of
these sites will meet it, other than JCADS of course.
Senator McConnell. You were here earlier this morning and
you heard the witnesses say that, as I recall, all but two of
the sites would meet the Chemical Weapons Convention.
Mr. Williams. That is what I heard, Senator. That is what I
have been hearing for a number of years.
Senator McConnell. So your thought is that they are saying
one thing inside and another thing when they come up here and
talk to us?
Mr. Williams. Absolutely, Senator.
Senator McConnell. How much will the delays outlined in
this report that I am holding cost over the life of the
program?
Mr. Williams. Well, as I referred to in my statement, we
have a reconstructed summary document, which is also an
internal document, on cost. It is in your packet. I do not have
a graph of it, but I do have a graph of its implications on the
right. Sorry, Senator Shelby might not be able to see it.
According to their own life cycle cost estimates, which
they reassured you this morning are holding pretty steady at
$14.1 billion, they anticipate known and likely cost growths of
over $10 billion.
Senator Shelby. Excuse me a minute.
Mr. Williams. Yes, sir.
Senator Shelby. You used the phrase ``they reassured'' us.
I think they tried to reassure us, but I do not have any
reassurance.
Mr. Williams. I understand. They attempted to reassure you,
sir.
Senator McConnell. You stated in your testimony, Mr.
Williams, that the Army told the citizens of Anniston, a number
of whom we have with us here--I might say parenthetically, I
started my life in Alabama in Athens, Alabama, north of you. I
spent the first 8 years of my life there. So it is always great
to have witnesses who speak without an accent.
You stated in your testimony that the Army told the
citizens of Anniston in March of this year, 5 months after
this, the internal memo, was complete, that their facility
would be closed by 2006. Was this an honest mistake, an
oversight, or how would you characterize it?
Mr. Williams. Well, Senator, I would characterize it as a
result of a public relations campaign that is funded to $30
million to try and convince folks that this program is
workable. It is not just in Anniston. I have that chart that
was presented that date. It is in your packet here. I asked one
of my colleagues in Oregon, another chemical weapons
construction site, to go down to the public outreach office and
pick up the latest information there, and this was done on
Thursday last week. They have a chart as well from the outreach
office in Oregon that clearly states operations will take from
2001 to 2005.
So it is no mistake that they are circulating this
information around these communities while their internal
documents show that Alabama will not get completed until 2014
and Oregon will not get completed until 2012. I do not think
there is any misinterpretation on their part of what they are
talking about.
One of the problems with transparency or one of the
realities of transparency is you do not have to get secret
documents smuggled out to concerned citizens in order to find
out what is really going on.
Senator McConnell. That is what in fact happened here,
right, is somebody inside, who will obviously remain nameless,
has provided you this report which contradicts most of what was
said earlier this morning here, right?
Mr. Williams. I believe it contradicts everything that was
said here, Senator, yes.
Senator McConnell. What I do not understand--and Mr.
Williams, you and I have been involved in this issue as long as
I have been in the Senate--is what the problem is in not just
being truthful and forthcoming about this. I have never
understood the internal thinking that led to this effort to
obfuscate the facts here. It seems to me it would be in
everybody's best interests, both the citizens and the Army, to
have a completely transparent process from beginning to end.
I am mystified by this. Have you ever figured out why this
continues?
Mr. Williams. Well, my wife has the degree in that area,
sir, so I would not want to speculate in any professional
manner. But I can tell you this, that in the 15 years that I
have been monitoring this program there has been an increased
mentality inside PMCD to defend the image of this program. I do
not know if that is based on careers inside the program, if it
is based on just the military mentality, which generally--and
being a Vietnam veteran myself, I certainly understand that in
a battlefield situation when your superior gives you an order
you salute and you respond promptly. You do not sit down and
negotiate.
But this is not a battlefield situation. But I think the
military mentality.
Senator McConnell. Also, do you think a problem has been
the lack of interest at the top in DOD, a feeling of sort of
out of sight, out of mind, do not bother me with this?
Mr. Williams. Absolutely, Senator. The chain of command in
this program is that PMCD reports to one higher authority once
a month. They say: How is it going? They say: It is going fine.
They say: We will see you next month. There is no oversight,
day to day management accountability of this program. PMCD is
outside the chain of command in a way that the Army Inspector
General (IG) report itself in 1998 said was contrary to Army
philosophy. They are outside of any normal chain of command and
that is a big problem with this program. They have nobody. This
program needs some adult supervision, sir, if I might say.
Senator McConnell. Finally, given the difficulty we had
getting to the point of actually getting alternate technologies
looked at within the Department, we will not recount how
difficult all that was. You were pushing for it for years. I
was pushing for it for years. We finally got it.
Do you think that people within the Department doing that
review of alternative technologies for disposal now have a
chance to prevail in a final decision, or do you still think
within the building it is so tilted in favor of on-site
incineration that even if these alternate technologies make
sense they are not likely to be pursued?
Mr. Williams. First of all, let me thank you for your
efforts. I know that it has been a very uphill struggle to try
to force these folks to look at safer ways to dispose of the
materials. I appreciate that. Many, many of us appreciate that.
My response would be that as long as PMCD is using these
kinds of schedules and representing costs, schedule, technical
capability, and all of these factors inside the building to the
defense acquisition review and those kinds of people who are
going to make the final decisions, instead of these kinds of
information, which is what they really know about it, I am very
concerned that that process will be subverted simply by a
continued pattern of misinformation that is going to lead to an
eventual appropriations level that is at this point almost off
the chart based on what they really know, and that these kinds
of factors are going to play into a decision that will
perpetuate this construction program because it has been
misrepresented.
On the other part of your question, sir, I feel the
alternative technologies program, not only from a public
involvement perspective, but clearly these technologies that
have a hold, test and release capability, which means as the
process goes along there is no process to stop, you can analyze
what you have got, have you achieved the destruction levels you
want; if you have not, you continue the process until you reach
them, and you control the material until you get to the point
where the material is easily handleable or can be then released
to a landfill or whatever, but you have control.
With these baseline construction technologies, as we have
seen repeatedly--and they have misrepresented to everyone about
the number of agent releases that have come out of the stacks--
once you put that material in, it is out of your control. That
is a major consideration. These alternatives do not have that
problem, sir.
Senator McConnell. Well, we are going to get to the
critical decision point here shortly, right?
Mr. Williams. Yes, sir.
Senator McConnell. What did we hear this morning about that
decision?
Mr. Williams. That should be May of next year. That appears
to be on track. The representation by Mr. Bacon that they can
get any where close to 2007 in Blue Grass is a pure fiction.
Senator McConnell. Let me just say in closing, they better
have a good justification for their final decision or we are
going to be--and Senator Shelby I am sure will agree with
this--we are going to be interested in hauling them back up
here again to give some rationale for their decision if it does
not pass the public smell test.
Mr. Williams. Well, sir, I would repeat and I will end. It
depends on which side of their mouth they are talking out of,
Senator. If they talk out of the mouth with the real facts, I
think we will get to a good decision. If they talk out of the
side of their mouth that is driven by public relations, public
affairs, and propaganda and manipulation, then we will get to a
decision that will land us right back here.
Senator McConnell. Let me just conclude my part of this by
thanking all of you for your community activism here. We would
not have known about this had you all not gotten active and had
taken the time to study it and brought it to our attention. So
you are all to be congratulated for the great work you are
doing on behalf of both of these communities, which have
legitimate reasons for deep concern about how this process is
going to go forward.
Senator Shelby. Thank you, Senator McConnell.
I just want to say, I think I brought up the word
``transparency'' earlier and I think it goes to the heart of
this, because it has got to be trust, trust between the people
who are going to destroy these very, very, very dangerous
chemical weapons and the people that it could affect in God
knows how many ways and the children.
But I also want to thank you for coming to the town meeting
that I had in Jacksonville several months ago, when you asked
me would I talk to Senator Stevens about holding this committee
meeting. I think it was very instructive.
Mr. Williams. Thank you so much for doing that.
Senator Shelby. But whatever we do, I believe this is an
Appropriations Committee. This is where we fund things, and
this is very expensive to do this, but nothing is more
expensive than to lose people's lives or destroy their lives,
destroy their communities, I think. Senator Stevens, the
chairman of the full committee and the subcommittee here,
pointed out we should leave no stone unturned as far as safety
is concerned. I believe this. Senator Stevens has asked me to
do this on behalf of the committee.

SUBCOMMITTEE RECESS

I want to thank you again for your testimony and also
announce that the full Committee on Appropriations will meet
next to consider Plan Colombia a week from today. The
subcommittee now stands recessed. Thank you.
[Whereupon, at 12:23 p.m., Wednesday, April 25, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MAY 9, 2001

DEPARTMENT OF DEFENSE

Reserves

STATEMENT OF MAJOR GENERAL THOMAS J. PLEWES, CHIEF,
ARMY RESERVE AND COMMANDING GENERAL, UNITED
STATES OF AMERICA RESERVE COMMAND,
DEPARTMENT OF THE ARMY

OPENING STATEMENT OF Senator TED STEVENS

Senator Stevens. This morning the subcommittee will hear
from the leadership of the Reserve components. Because of the
number of witnesses, the hearing will be conducted in two
parts.
We will hear from two panels. First, the leaders of the
four Reserve forces, followed by the National Guard, so let me
welcome Major General Thomas Plewes, Chief of the Army Reserve,
Rear Admiral John Totushek, Chief of the Naval Reserve, Major
General Dennis McCarthy, Director, Marine Corps Reserve,
Affairs Division and Major General James Sherrard, Chief of the
Air Force Reserve.
I congratulate each of you for your recent nominations for
third stars. I think there is an increasing role and importance
to the Reserve in our military strategy, and we welcome this
move. All of your forces continue to make substantial
contributions to the total force, and this committee wants to
work with you as much as possible to address readiness and
modernization requirements to the Guard and Reserve.
We have witnessed the results of these investments when the
tremendous participation now of Guard and Reserve forces in all
recent overseas contingency operations, as well as disaster
relief and major training events throughout the United States.
I think it is of tremendous importance to all of us that the
Reserve forces and Guard forces are used in this manner. We
still, however, have some problems, problems about tempo,
recruiting and retention, and modernization infrastructure
demands, and it is not going to be easy to deal with it.
My partner will be along in a little while. We will listen
to his statement, but there is no question that we are going to
try and assess your priorities and make sure that they are
fully met. Each of your organizations continue to contribute a
great deal to the total force. Let me start off first by
calling on General Plewes.
General Plewes. Mr. Chairman, thank you for the opportunity
today to talk to you on behalf of the citizen soldiers of the
Army Reserve.
Last month, the Army Reserve celebrated its 93rd birthday.
This is a force that began with 160 doctors, and we have not
forgotten our roots even as we have grown and matured. We
remain an organization of trained professionals with civilian-
acquired skills and talents to serve the Army, and we are able
to protect and sustain ourselves in danger.
We are very busy these days, and we are proving every day
that you can mobilize quickly and deploy swiftly. Wherever the
Army has gone in recent years, the Balkans and Central America,
the Gulf, East Timor, so has the Army Reserve. As of this year
we have sent over 15,000 members of the Army Reserve to Bosnia
and Kosovo. Today, over 2,000 of us are deployed around the
world, offsetting the operational tempo of a very busy Active
Army.
To meet this high operational tempo, the soldiers and units
of the Army Reserve work very hard to be trained and ready. As
a matter of fact, our readiness levels are the highest in our
history, up 8 percent over the last 2 years alone. We are
showing also that we are able to recruit a force of high-
caliber citizens we need to accomplish our missions, and we are
able to retain proven soldiers we need to meet our growing
responsibilities.
After several years of a difficult recruiting environment,
we met our recruiting and retention goals in fiscal year 2000.
As I speak today, at the mid-point of fiscal year 2001, we are
exceeding those goals. We are involved in transforming our Army
into a more deployable, more lethal force. Additionally, we are
taking on new missions and consequence management and
information operations, and we take on these new missions with
confidence.
The civilian-acquired skills of our Reserve soldiers put
them on the cutting edge in the latest of technological
innovation. We are inventorying those skills and making them
available to the Army, with the understanding that these
civilian skills are precisely what we need to counter the
growing threats to our national security.
Our citizen-soldiers are doing great things. Our challenge
is to provide them with the tools and support they need and
deserve. One way is to increase full-time support. This is a
critical item and critical to improve our readiness. There is a
direct correlation between full-time manning and readiness, and
Congress knows this.
Last year, Congress added 300 Active Guard and Reserve
soldiers and 650 military technicians to our force this year,
and we thank you. This is a great help, but we are still short
of what we need to meet our validated requirements for full-
time support. We also need to have compatible and modern
equipment to perform our missions alongside of the Army.
We have developed creative methods to increase the life of
what we have, including an initiative to place a good part of
our equipment in long-term controlled humidity storage, but
there is only so much we can do on our own. Resourcing
equipment, capitalization and modernization is essential to
keep us the relevant force that we are today.
Our soldiers in the Army Reserve deserve good facilities in
which to train and work. That is too often not the case. Our
facilities are aging, and we are not putting the best face on
the Army in the 1,100 communities in which we serve across this
great country. We must work to make infrastructure
improvements. This quality-of-life issue impacts on recruiting
and retention and readiness and soldier morale. Our
construction and real property maintenance programs
unfortunately have needed the support of Congress every year.

PREPARED STATEMENT

Again, we appreciate your commitment to our soldiers. I
thank you for the opportunity to brief you and I look forward
to the opportunity to answer any questions you might have.
[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL THOMAS J. PLEWES

INTRODUCTION

Mr. Chairman, members of this committee, thank you for the
opportunity to testify on behalf of the more than 360,000 men and women
serving in Army Reserve units and as individual mobilization assets--
all soldiers of The Army. The United States Army Reserve, now 93 years
young, enters the first century of the new millennium as an
indispensable and strategically responsive force, an essential
component of The Army.
The opportunity to testify before this subcommittee comes at a time
of new challenges in which we are transforming our force in support of
the Chief of Staff of the Army's Vision. The Army Reserve is no longer
a force in reserve; it is integral to all Army operations today. Our
task through the next decade is to remain flexible and responsive to
the needs of our Army. ``We Can Do!''
At the outset, I wish to convey my sincere appreciation to this
subcommittee for its sustained, consistent, strong support of citizen-
soldiers. Providing the opportunity to discuss the challenges we are
faced with is another demonstration of your concern for our Reserve
forces and how well they can fulfill the missions assigned to them.
The Army Reserve, the Army National Guard and the Active Army are
full partners in the fully focused American Force that is the most
responsive ground combat force in the world. Wherever the Army has
gone, so has the Army Reserve. Wherever the Army is, so are we.
This is not rhetoric but plain truth: the U.S. Army today cannot
perform its missions or meet its mission goals without the Army
Reserve. We are being utilized more frequently than ever before, an
indispensable Army partner, a new Army Reserve--one increasingly
committed to our national defense in several important ways.
The scope and variety of Army Reserve activities illustrate the
frequency that the Army Reserve is called upon as part of the Army in
answering the nation's needs. Army Reserve soldiers continue to take
part in every kind of mission we face at the beginning of the new
century. These missions range from combat operations to peacekeeping,
from disaster relief to major training events, both at home and abroad.
We support communities as a hometown organization. We honor our past,
but constantly prepare ourselves for the future.
The Army Reserve has played a vital Army role from major theater
war to training the entire force. Army Reserve soldiers supported NATO
operations in the former Republic of Yugoslavia and continue to support
peacekeeping operations in Bosnia, Kosovo, and Southwest Asia.
Additionally, Army Reserve civil affairs and logistics soldiers have
even supported the U.S. mission in East Timor.
The Army Reserve's key challenges are the same as the rest of the
Army--provide trained and ready units and soldiers. In order for the
Army Reserve to maintain its many capabilities and continue to meet the
requirements of the National Military Strategy, your continued support
is vital to secure critical resources for full-time support manpower,
recruiting and retention, equipment procurement and modernization,
information technology, and facility revitalization.

PEOPLE

Equal Opportunity
The Army Reserve is rich in diversity and gender mix. It's the
nation's most culturally diverse and upwardly mobile reserve force in
the military today. Minorities represent 40 percent of the soldiers in
the Army Reserve, and they have, on their own merits, been promoted
into the highest enlisted and commissioned officer ranks. This also
holds true for women, which comprise 24 percent of reserve strength.
Other impressive data include the facts that 57 percent of all the
Black officers, 42 percent of all the Asians officers, and 39 percent
of all the Hispanic officers in all the Reserve Components in DOD are
in the Army Reserve. Our high minority population thrives in an
environment that promotes the basic concepts of treating others with
``Dignity and Respect''. Our Equal Opportunity programs are well
resourced. The return on that investment is handsomely represented in a
force rich in cultural, ethnic and gender diversity.

RECRUITING AND RETENTION

An area of highest importance to the Army Reserve is recruiting and
retention. The Army Reserve is a major participant in supporting and
training a 21st century Army. This requires the best soldiers America
can provide. In this regard, we are most appreciative of the help your
committee has provided us. We certainly would be remiss if we did not
thank you for the attention you have paid to our recruiting needs in
recent legislation. With your help we were, for the first time in
several years, able to meet our recruiting mission in fiscal year 2000,
and at the mid-year point of fiscal year 2001, we have exceeded our
mission.
The Army Reserve, in partnership with the United States Army
Recruiting Command (USAREC), recently conducted a thorough review of
Army Reserve Recruiting. This review has helped us forge a stronger
relationship with the Recruiting Command and has streamlined our
processes to support the symbiotic relationship between recruiting and
retention. To that end, we are doing the following:
--We are seeking to ensure that all Army Reserve soldiers are
involved in recruiting and retention activities--we all are a
part of the Army's recruiting efforts.
--We are removing mission distracters allowing the Recruiting Command
to focus on their core competency of recruiting non-prior
service applicants.
--We are focusing on life cycle personnel management for all
categories of Army Reserve soldiers, troop unit members, and
soldiers in the Individual Ready Reserve. We are ensuring that
career counselors talk to Army Reservists about joining the
Active Guard Reserve (AGR) program, training to become Warrant
Officers, or Commissioned Officers, and we are sharing
opportunities available in our troop units.
--Our retention program seeks to reduce attrition, thereby improving
readiness and reducing recruiting missions.
--And we are jointly working with the Recruiting Command to ensure
AGR personnel assigned to that command are given leadership and
professional growth opportunities.
This fiscal year we commenced these activities by transferring
responsibility for the prior service mission from the Recruiting
Command to the Army Reserve. This transition will occur in a phased
process that culminates in fiscal year 2003. Tenets of this transfer
include: establishment of career crosswalk opportunities between
recruiters and retention transition NCOs; localized recruiting,
retention and transition support at Army Reserve units and increased
commander awareness and involvement in recruiting and retention
efforts.
We expect to reduce attrition and improve recruiting efforts by
reducing no-shows to initial active duty training, highlighting all
Army Reserve personnel life cycle opportunities and improving delivery
of recruiting promises. In Phase I of the prior service mission
transition, we transferred 61 recruiters from USAREC and assigned them
to Reserve Centers within the southeastern United States and Puerto
Rico. The assignment of new Retention NCOs will allow the Army Reserve
to lower its attrition significantly and to ensure prior service
soldiers are provided opportunities in our units, and assist our
commanders in delivering recruiting promises. With the beginning of
Phase II, the total Army Reserve Retention and Transition Division
(RTD) mission will increase to 10,000 prior service transfers. We will
continue extensive collaboration with USAREC to ensure a smooth
transition of these responsibilities.
To support these efforts, the Army Reserve uses the non-prior
service and prior service enlistment bonuses, the Montgomery GI Bill
(MGIB) Kicker and the Student Loan Repayment Program in combinations to
attract soldiers to fill critical MOS and priority unit shortages.
Program funding must be sufficient to attract and retain both prior and
non-prior service soldiers. The Army Reserve must be able to provide a
variety of enlistment and retention incentives, for both officer and
enlisted personnel, in order to attract and retain quality soldiers.
Our new retention program is a success. Faced with an enlisted
attrition rate of 37.5 percent at the end of fiscal year 1997, we
adopted a corporate approach to retaining quality soldiers. Retention
management was a staff responsibility before fiscal year 1998. In a
mostly mechanical approach to personnel management, strength managers
simply calculated gains and losses and maintained volumes of
statistical data. Unfortunately, this approach did nothing to focus
commanders on their responsibility of retaining their most precious
resource--our soldiers.
To correct this shortcoming, the Army Reserve developed the
Commander's Retention Program. A crucial tenet of this program places
responsibility and accountability for retention with commanders at
every level of the organization. Commanders now have a direct mission
to retain their soldiers and must develop annual retention plans.
Additionally, first line leaders must ensure all soldiers are
sponsored, receive delivery on promises made to them, and are provided
quality training. In this way, the Commander's Retention Program
ensures accountability because it establishes methods and standards and
provides a means to measure and evaluate every commander's performance.
Since the introduction of the Commander's Retention Program, the Army
Reserve has reduced enlisted attrition by nearly 5 percent. The
enlisted attrition rate in fiscal year 2000 was 28.9 percent. However,
persistent pressure from increased job market competition that is
intensified by a robust economy makes it difficult to maintain this
degree of improved retention. Consequently, funding delays and
projected program shortages threaten our goal of continuing to reduce
attrition.
The Army Reserve also is experiencing a company grade officer
shortfall. Retention goals focused commanders and first line leaders on
junior officers, as well.
Our retention program seeks to reduce attrition, thereby improving
readiness and reducing recruiting missions. Our retention efforts bore
fruit earlier this year with a 1,200 non-prior service recruit mission
reduction to USAREC. Given our current strength posture and attrition
outlook, another mission reduction is being assessed.
The Army Reserve will successfully accomplish its 43,000 recruiting
mission for fiscal year 2001 while achieving the Department of the Army
and Department of Defense quality marks. Next year our enlisted
recruiting mission will stabilize at about 42,000 due to the success of
our retention efforts. The accomplishment of the recruiting mission
will demand a large investment in time on the part of our commander's,
our retention NCOs, and our recruiters as they are personally involved
in attracting the young people in their communities to their units.
However, the same environmental pressures that make non-prior
service recruiting and retention difficult affects prior service
accessions. With the end of the defense drawdown we have seen a
corresponding decrease in the available prior service market as
reflected in the IRR. This has meant greater training costs, due to the
increased reliance on the non-prior service market, and an overall loss
of the knowledge that comes when NCO leadership fails to transition to
the Army Reserve. Consequently, the Army Reserve's future ability to
recruit and retain quality soldiers will be critically dependent on
maintaining competive compensation.
Additionally, the young people of today need to be made aware of
the unique opportunities available in the different military
components. The best way to get this message out is to advertise
through the mass media. Special attention needs to be placed on the
recruiting budget, especially for advertising, to meet our requirements
in the next several years. Funding our critical advertising needs is
imperative if we are to be honestly expected to meet our recruiting
goals. Your continued support of our efforts to recruit and retain
quality soldiers remains essential if we are to be successful.

READINESS

Over 84,000 Army Reserve soldiers mobilized and served in Desert
Storm. We were ready then, and are ready today. We continue to improve
Duty Military Occupational Skill Qualification (DMOSQ). The Army Chief
of Staff set a goal for the Reserve Components to achieve and sustain
an 85 percent DMOSQ and Professional Development (PDE) qualification
level by fiscal year 2005. Recent increases in funding have raised both
DMOSQ and PDE qualification rates by several percentage points. The
Army Reserve is projecting that DMOSQ rates will climb to 85 percent by
fiscal year 2005 and NCOES qualification rates will achieve 85 percent
by fiscal year 2004 due to programmed increases to our funding level.
We also continue to aggressively manage and monitor soldiers attending
DMOSQ to achieve this goal. Your continued support of our mutual goal
to have a trained and ready force remains essential to our success.
Unit readiness improved 8 percent in the past two years. Force
Support Package (FSP) units average 88 percent deployable readiness.
The Army Reserve's readiness status continues to improve. As of January
2001, 75 percent of our units meet deployment standards, an 8 percent
increase over the previous two years. At the same time, the readiness
level of FSP units remained constant. The Army Reserve continues to
achieve a high number of units rated deployable, despite having the
lowest level of full-time support of any reserve component. Today's
readiness levels are a testimony to the Army Reserve's ability to adapt
and succeed in our assigned mission.

RELEVANCE

As I testify today, we have over 1,400 Reserve soldiers supporting
contingency operations in Operations Joint Forge and Joint Guardian
(Bosnia and Kosovo) in the European Theater. These Reservists comprise
the latest rotation in support of operations spanning five years and
totaling over 16,000 troops, and we remain heavily employed. Overall in
fiscal year 2000 the Army Reserve deployed over 71,000 soldiers to 64
countries, and we provided a total of 3.5 million mandays in the United
States and abroad. Employments were worldwide from Central America and
Southwest Asia to places like East Timor. Furthermore, the Army Reserve
did this at the same time that it achieved its highest readiness status
in history. As of January 2001, 82 percent of our units reported being
combat ready, up from 79 percent just two years ago. Much of this
achievement was the direct result of your support to improve our full-
time manning and provide the funding required for our operating tempo
and training requirements.
We are a force sized and ready to fight full-scale war as well as
support smaller scale contingencies. We bring trained units who can get
to where they are needed quickly and then perform as a seamless part of
the Army team. We bring professionals from the civilian world, leaders
and experts in many fields, with skills and abilities the Army may not
have or cannot afford to develop or sustain. We are as accessible as
any component of any service, ready to respond to the needs of the
National Command Authority.
The Army Reserve continues to support Active Army exercises,
operations, and training worldwide. Some of the major exercises and
training events supported included: BRIGHT STAR, NEW HORIZONS,
Operation JOINT GUARD, Operation JOINT FORGE, and many National
Training Center/Joint Readiness Training Center rotations.
For the last year, Army Reservists have been deployed
simultaneously to two troubled parts of the world, in Europe for
Operation JOINT FORGE (Bosnia) and JOINT GUARDIAN (Kosovo) and in
Southeast Asia for Operation STABLISE (East Timor).
Worldwide deployments are nothing new for the soldiers of the Army
Reserve. Since 1995, more than 16,000 Army Reservists have participated
in Operations JOINT ENDEAVOR, JOINT GUARD, and now JOINT FORGE, either
in Bosnia or in support operations in neighboring countries, and in
Operation JOINT GUARDIAN in Kosovo. The Army's reliance on the Army
Reserve's capabilities, especially in such areas as civil affairs,
medical, engineering, logistics, transportation, military police,
postal, public affairs and psychological operations, will ensure the
Army Reserve will be in the Balkans as long as the Army remains there.
When not working alongside their active Army, Army National Guard
and sister services, Army Reserve soldiers honed their always-in-demand
skills on exercises.
More than 2,000 soldiers from 46 units took part in the annual
TRANSLOTS exercise in June, using landing craft to unload equipment and
then truck supplies to the ``front lines''. For the first time, this
annual transportation exercise was run in conjunction with the annual
ROVING SANDS exercise, a joint-theater air and missile defense exercise
that involved more than 18,000 troops from several nations. More than
half of the units for TRANSLOTS were from the Army Reserve, to include
the lead unit for the exercise, the 143rd Transportation Command from
Orlando, Fla. Army Reserve units were also significantly involved in
ROVING SANDS.
Hundreds of Army Reserve Military Police soldiers from the 77th and
99th Regional Support Commands trained to handle enemy prisoners of war
by setting up and operating two internment facilities and a corps level
internment operation during Exercise PLATINUM SWORD 2000 at the Army
Reserve installation at Fort Dix, N.J. Prior to conducting this hands-
on exercise, the soldiers prepared with a simulation exercise hosted by
the Battle Projection Group of the Army Reserve's 78th Training Support
Division. All of the Army's Internment/Resettlement brigades are Army
Reserve units.
Army Reserve soldiers trained overseas, as well as in the United
States. For the first time since 1995, U.S. soldiers, sailors, airmen
and Marines returned to the Philippines to conduct the BALIKATAN
exercise with the Philippine Armed Forces. Army Reservists played key
roles in this exercise, to include an Army Reserve officer serving as
the U.S. co-exercise director for the combined force.
As has been demonstrated by our ever-present use in operations and
exercises, so, too, does the Army Reserve's role in contributory
support demonstrate that the Army Reserve is no longer a ``for
emergency use only'' organization.
We are utilized in every way, contributing daily to the Army. This
support reduces operational costs, increases efficiency and provides
excellent production-based training opportunities. Our soldiers benefit
from this contributory support by performing challenging, time-
sensitive missions. Soldiers do not like make-work missions. They want
to do something meaningful something, which has a benefit and a
purpose, which offers a challenge. We have moved from a training model
of ``train, then do'' to ``train and do.'' Army Reserve soldiers rise
to that challenge constantly.
Army Reserve Materiel Management Commands conduct year-round
resupply operations for active Army units in Southwest Asia and the
National Training Center in California. Army Reserve intelligence
centers at Fort Gillem, Ga., and Fort Sheridan, Ill., provide strategic
analysis for the Army on a full-time basis. This seamless support of
real-world missions clearly demonstrates how effectively Army Reserve
units integrate into the Army.
Contributory support helps the Army focus its active forces on
their primary warfighting tasks. Another way we help the Army
concentrate on warfighting is in our core competency of training.
Through focus on our part of the training function, we help the
Army return soldiers to combat divisions. Army Reserve soldiers are
fully integrated into every aspect of training. Our soldiers provide
quality training to soldiers and units from all components.
Army Reserve Institutional Training Divisions provide skill,
leadership, and professional development training. They also provide
basic combat and one station unit training at Army Training Centers.
Army Reserve Training Support Divisions provide collective lanes and
simulation training to units of all three Army components.
The Army Reserve Readiness Training Center (ARRTC) at Fort McCoy,
Wis., which provides a myriad of training support to all components of
the Army, is developing a well-earned reputation as a center of
training innovation. Army Reserve, as well as Army National Guard and
Active Component soldiers, can now graduate from a Military
Occupational Skill (MOS) producing school by taking an interactive,
distance-learning course, developed and taught by ARRTC, using off-the-
shelf civilian equipment.
Another innovation at ARRTC is the mirror site classroom (so-called
because it ``mirrors'' the training offered at the Army Computer
Science School at Fort Gordon, Ga.) used to provide security
certification instruction to information system administrators. ARRTC
conducts this training with a ground-breaking single classroom set-up,
using a single set of computers, thus saving scarce resources and
serving as a model for future planned mirror sites.
The Army Reserve is well placed to benefit the Army in finding
innovative ways to do business because of the civilian acquired skills
of our soldiers. Our soldiers bring their civilian acquired skills,
talents and experience with them. This has been true from the beginning
of the Army Reserve: the very first Reservists were civilian doctors
who could be called up in time of emergency.
Civilian technological advances are taking place at a dramatic
pace. Army Reserve soldiers who take part in these advances in their
civilian jobs are ideally placed to bring them into the Army for its
benefit.
To better capitalize on the ``citizen'' part of ``citizen-
soldier'', the Army Reserve is collecting information on the civilian
skills of its soldiers, skills acquired outside the Army and thus
perhaps unknown to it.
Army Reservists can now input those skills into the Civilian
Acquired Skills Database (CASDB) at the Army Reserve Personnel Command
(AR-PERSCOM). By going to the website at www.citizen-soldier-
skills.com, soldiers can enter those skills they obtained from civilian
training or work experience. Soldiers who volunteer to register their
civilian acquired skills are afforded the opportunity to serve in
duties outside of their traditional branch or MOS. CASDB gives
commanders at all levels the means to identify those soldiers with
specific skills to meet special needs. Those skills and talents can
then be used to benefit the Army Reserve, the Army and the nation.
Using our skills in the information area is one part of our strategy
for assisting the Army to become a more strategically deployable and
responsive force. By leveraging advanced communications and information
technology, we can conduct split-based support operations. Army Reserve
units can operate from home station to accomplish missions in forward
locations utilizing this technology, thus reducing lift requirements.
We are evolving our support organizations to build a reach-back
capability for logistics, intelligence, and training support, thereby
reducing the deployed logistical footprint.
We will also reduce lift requirements by strategically stationing
Army Reserve equipment and forces, capitalizing on our forward-
stationed Reserve units and soldiers, such as the 7th Army Reserve
Command in Europe and the 9th Regional Support Command in the Pacific.
Since Army Reserve power projection units have key roles in moving
the Army overseas and receiving deployed units once they arrive, it is
vital we get our own equipment--that not already strategically
positioned--overseas quickly. An innovation now underway to better
facilitate deployment response times is the Strategic Storage Site
(SSS) Initiative. Our goal is to maintain 37 percent of our equipment
in these sites. Besides improving equipment readiness and maintenance
operations, this equipment, located at strategic ports around the
country, will be immediately ready for deployment. The initial
Strategic Storage Site is a 150,000 square foot facility at Gulfport,
Miss. Six to seven SSS facilities are planned.
Consequence Management
The Army Reserve is ready to answer our Nation's call at home, too.
Should terrorists strike the American homeland, Army Reserve units and
soldiers, possessing a variety of capabilities, would be immediately
available. These units include chemical detection and reconnaissance
companies and medical and medical support organizations, all ready to
support civil authorities should disaster strike. As should be
expected, we train for this worst-case eventuality diligently. One such
training exercise involving Army Reserve units, the Air Force Reserve,
other Defense Department and U.S. agencies, as well as state and local
agencies, was CONSEQUENCE MANAGEMENT 2000, held last May at the
Regional Training Site--Medical at Fort Gordon, Ga.
The Army Reserve is ideally placed for civil support. Our units are
stationed in Hometown, U.S.A., with our soldiers located in 1,200 Army
Reserve Centers in towns and cities all across America, putting the
Army's footprint in every part of our country. They are part of
America's communities because those communities are their communities.
Our soldiers are the local doctors, nurses, teachers, lawyers, police
officers, Little League coaches and soccer moms and dads, who enable
the Army Reserve to respond with a multi-faceted capability. We provide
key emergency preparedness leaders. Army Reserve Civil Affairs units
contain 97 percent of the Army's expertise to rebuild shattered
infrastructure--social, civil and physical. Military Police units can
shelter up to 56,000 displaced persons. The Army Reserve, ready to
respond to a chemical incident, contains 63 percent of the Army's
chemical capability. Today, the Army Reserve has the largest chemical
decontamination capability within DOD. The Army Reserve is currently
training 100 out of a total of 127 decontamination platoons and 8 of
the 15 reconnaissance platoons called for in Defense Reform Initiative
Directive 25.
Our medical professionals are working closely in DOD and among the
interagency community to leverage our capabilities in Weapons of Mass
Destruction (WMD) Consequence Management. Residing within the Army
Reserve are 68 percent of the Army's medical assets. The Army Reserve
contains 50 percent of resourced Mortuary Affairs units, 83 percent of
Psychological Operations units, as well as Aviation, Logistics,
Engineer and Signal units, which are essential capabilities for WMD
Consequence Management. The Army Reserve stands ready to support WMD
Consequence Management operations in combat, in the homeland or
overseas in support of our coalition partners.
The challenge of defending America's Homeland continues to grow.
Although the Army Reserve is not a ``first responder'' organization, it
is ready to provide assistance to support and sustain those
organizations that do respond first. The Civil Support mission requires
capabilities resident in the Army Reserve.
Civil Support and Weapons of Mass Destruction (WMD) operations are
combat support and combat service support intensive. Army Reserve core
capabilities enable the Army to provide rapid support that complements
the Federal response that sustains local responders.
As a community-based force, the Army Reserve is--by definition--
America's people. We are a reflection of the values and traditions
embodied in our culture. Those values and traditions are what make the
Army Reserve, the National Guard and the Army strong, able to meet the
Nation's missions for the past 225 years and continuing into the new
millennium. The men and women of the Army Reserve, all of whom
volunteered to be ``twice the citizen'', have taken on the sacrifices
to serve the Nation. In their hands is the future of the Army Reserve.
Information Operations
We use Information Operations (IO) to defend our own information
and information systems while disrupting those of the enemy. IO ensures
that our leaders have the information they need, when they need it, in
a form they can use to win the fight and protect America's vital
interests.
These are not new concepts. The Army has long understood the
importance of controlling the decision cycle. Units with IO
capabilities that intercept or interrupt communications, that collect
and analyze information about the battlefield and that influence the
attitudes and will of the opposition, are a legacy in the Army Reserve
structure. The Army Reserve provides a wide variety of experts who
accomplish missions, such as Civil Affairs, Psychological Operations,
Public Affairs, Military Intelligence and Signal. The Land Information
Warfare Activity (LIWA), the National Ground Intelligence Center and
the Joint Reserve Intelligence Program now are utilizing Army Reserve
units, facilities and personnel to conduct Information Operations.
The Army Reserve also is building additional capability to
reinforce Army information and LIWA operations. The Army Reserve Land
Information Warfare Enhancement Center directly expands the scope and
sophistication of LIWA information capabilities. When complete, one-
fifth of LIWA manpower will be Army Reserve soldiers. The Defense
Information Systems Agency has created a 22-member Joint Web Risk
Assessment Cell. This cell will monitor and evaluate Department of
Defense web sites to ensure no one compromises national security by
revealing sensitive defense information. Five members of this cell,
whose civilian skills are particularly suited to this hard skill
requirement, are Drilling Individual Mobilization Augmentees of the
Army Reserve.
Further, the Army Reserve is actively carving its niche in this
evolving area of cyber warfare by creating the Reserve Information
Operations Structure. This organization will be activated to provide
contributory support to the Army's Computer Network Defense and
information assurance efforts. Army Reserve Information Operation
Centers (IOCs) identify and respond to viruses and intruders in Army
computer networks. Currently, Army Reserve IOCs are forming in the
National Capital Region, Massachusetts, Pennsylvania, California, and
Texas, and satellite units can be found in over a dozen large cities.
Information Operations support the Army's portion of the Defense
Information Infrastructure to ensure the availability, integrity and
confidentiality of information systems.
Counter Drug Operations
The Army Reserve provides intelligence, linguistic, transportation,
maintenance, and engineer support to drug law enforcement agencies and
unified commanders-in-chief in an ongoing program in effect since 1989.
The Army Reserve supports local, state and federal law enforcement
agencies in operations designed to reduce the flow of illegal drugs
both within and outside of American borders. Feedback from High
Intensity Drug Trafficking Area directors was overwhelmingly positive.
The Army Reserve also participates with the Drug Demand Reduction
Program to help reduce the demand for illegal drugs and alcohol abuse
through education and through deterrence by randomly testing our
soldiers on a regular basis. We received a program funding increase to
raise our testing level to more closely match the Active Component
testing level. The increased funding also allows the retention of those
civilians most critical to program administration.

RESOURCING

Resourcing is a difficult subject to discuss at this time because
we don't as yet have complete details of the Defense portion of the
President's Budget pending completion of the ongoing strategic review.
However, I do wish to discuss several challenges we face in providing
the Army Reserve the resources it needs. At the outset, I would like to
emphasize that many of our resourcing challenges are a consequence of
our being victims of our own success. Successful operations lead
additional successful operations down the road. This increases
operating tempo and personnel tempo costs and puts stress on personnel,
equipment and facilities with bills that ultimately must be paid.

Modernized Equipment Procurement is a Challenge for the Army Reserve
The compatibility of current Army Reserve equipment with the Active
Component is a great challenge. As a result of incremental
modernization of Army units, the Army Reserve equipment compatibility
and unit interoperability require constant attention. The dynamic
global environment requires that military forces have the added
flexibility of modern equipment systems. To meet challenges of future
operating environments and the wide range of potential threats, the
United States will require an agile, world class Army capable of rapid
response and dominance across the entire spectrum of operations in a
joint, interagency, and multinational environment. Increasing demands
signify the Army Reserve must be properly equipped to perform the
mission. Moreover, the increased use of Reserve forces in support of
operational missions has highlighted the importance of having
compatible and modern equipment. The Army Reserve must be seamlessly
integrated into contingency operations and wartime scenarios. Key to
this integration is ensuring equipment is both operationally and
logistically compatible. Without complete interoperability, the
capacity of the Army Reserve to offer combat support and combat service
support would be degraded, and the effectiveness of the force would
suffer.
The Army's goal to improve compatibility incrementally, within the
constraints of the Total Obligating Authority becomes a question of
affordability. Because the Army Reserve is dealing with limited
funding, creativity in developing ways to stretch these funds and
extend the life of existing equipment is essential. The Army Reserve
increasingly relies on limited overhaul and re-build programs of
existing equipment to extend service life, to reduce operating costs,
and improve system reliability, maintainability, safety, and
effectiveness. Army digitization initiatives may accelerate
incompatibility and obsolescence of equipment when supported forces are
digitized and Army Reserve forces are not.

Military Construction
The Army Reserve Installation Community proudly sustains two of the
Army's major Installations and 12 Regional Support Commands. These
regional commands function as ``virtual installations'' with facilities
in 1,200 sites across all 50 states, most U.S. territories, and in
Europe. As of this fiscal year, the Army Reserve military construction
backlog is $2.25 billion. We are constructing on average only 5-6 new
facilities per year.
Army Reserve infrastructure is deteriorating, and this adversely
affects soldier training and readiness on a daily basis. Quality, well
maintained facilities provide Army Reserve units with the means to
conduct necessary individual and collective training, to perform
operator and unit maintenance on vehicles and equipment, and to secure,
store, and care for organizational supplies and equipment. These
facilities also provide other important benefits. Fully functional and
well-maintained training centers have a positive impact on recruiting
and retention, unit morale, and the readiness of the full time support
personnel who work in the facilities on a daily basis. In addition to
supporting the quality of life of units and support staffs, Army
Reserve facilities project an important and lasting image of America's
Army in the local community.

Sustainment, Restoration and Modernization
Historically, Army Reserve Sustainment, Restoration and
Modernization (formerly known as Real Property Maintenance) has been
inadequately resourced. To train our citizen soldiers, we use more than
45,000,000 square feet of widely dispersed Reserve Centers and support
facilities worldwide. This equates to more square footage than Forts
Hood and Sill combined, with Fort Belvoir thrown in for good measure.
Like these posts, we experience inherently the same challenges, but in
a different setting.
For today's Army Reserve soldier, the impact of poor facility
conditions is even more acute. Overcrowded, inadequate and poorly
maintained facilities seriously degrade our ability to train and
sustain units and weaken soldier morale and esprit de corps. Years of
inadequate resources have brought to this state of deterioration and
disrepair. For eight of the past ten years, we've been functioning on
less than 40 percent of required funding to sustain existing
facilities. Couple these facts with the advancing age of the inventory,
greater mission demands, and a shifting population; it's easy to see
that we are in a facilities death spiral unless resources are
immediately applied.
Most Army Reserve facilities consist of 1950's era, red brick, flat
roofed, tired looking structures that remain virtually the same as when
they were constructed. They're sorely in need of modernization or, as
in most cases, replacement. Our primary facilities, Army Reserve
Centers, are prominent symbols of The Army on ``Main Street America.''
They often create the first and lasting impressions of the entire Army
and stand as permanent ``billboards'' for all Americans to see.
However, we have hundreds of deplorable facilities that siphon off an
inordinate amount of our maintenance and repair dollars. Given current
Sustainment, Restoration and Modernization funding, we're unable to
break free from sustainment and begin improvements on our facilities.
Additional funding will prevent further facility deterioration and
premature aging, improve the environment in which our soldiers work and
train, promote and project a positive Army Reserve image in communities
across the country, and enhance recruiting and retention efforts for
all components of the Army. We're replacing the aging inventory at the
rate of five or six centers at a time, but it's not enough. We've
developed an overall strategy to modernize our Army Reserve facility
inventory in concert with the Army's Facility Strategy that establishes
a focused 30-year roadmap for active and reserve components to sustain
facilities and to focus modernization funding, principally military
construction, in 10 year program increments. The first modernization
increment calls for replacement of one-third of the Army Reserve
Centers but without resources the plans falls apart. We have the will
to succeed, but resources are the essential yet elusive key to success.

Recruiting and Retention Bonus Programs and Increased Army Reserve
Advertising
Recruiting resources pay dividends beyond the year of execution.
For example, Army Reserve advertising in fiscal year 2002 influences
potential recruits making enlistment decisions in fiscal year 2003-
2005. Thus, we must look at recruiting resources over time and not
limit consideration to the current or next fiscal year.
Resourcing the Army Reserve sufficiently to achieve its average
recruiting workload over the next several years enables the Army
Reserve to achieve its end strength. A steady, even flow of resources
ensures a better recruiting environment.
Media advertising costs continue to increase. Television is most
effective at targeting desired Army audiences because it dramatically
illustrates the Army experience through sight, sound, and motion.
Successfully meeting the recruiting mission, which we did in fiscal
year 2000, following several years of failure, comes from many complex
and rapidly changing factors. The recruiting advertising program,
however, is one of the few factors that we can control.

FULL-TIME SUPPORT

An increase in Full-Time Support (FTS)--Active Guard/Reservists
(AGRs) and Military Technicians (Miltechs)--is essential to improve
Army Reserve readiness. One of the greatest challenges facing the Army
Reserve today is an insufficient number of FTS authorizations to
support over 2,300 Army Reserve units in day-to-day operations. FTS
levels directly impact the readiness of Army Reserve units by providing
the additional training, command and control, technical, functional,
and military expertise required to transition from a peacetime to a
wartime posture. The FTS staff performs all the day-to-day support
functions for the unit. When FTS levels drop, this affects readiness
levels.
The Army has identified critical thresholds for FTS, based on the
minimum essential levels to prepare and maintain units to meet
deployment standards identified in Defense Plans. The fiscal year 2003
transformation of the Army's go to war structure includes eliminating
approximately 300 Title XI Active Army authorizations from Army Reserve
units. As a coordinated ``Army'' decision, the Army Reserve AGR
resource ramp will be accelerated by 300 beginning in fiscal year 2003.
The goal is to restore the loss of Active Army end strength from Army
Reserve units with AGRs while continuing to work towards improving the
overall unit readiness with increased full-time support.
Congress has been sensitive to the importance of FTS, and we are
grateful for the fiscal year 2001 Congressional increase in AGRs and
MILTECHs. This increase reduced the Army Reserve FTS shortfall by
almost a thousand (650 MILTECHs and 300 AGRs). Additional authorization
increases are essential for the Army Reserve to meet acceptable
readiness standards.

SUMMARY

For 93 years, the United States Army Reserve has served as a
community-based federal force of trained and ready units and
individuals supporting The Army, here and abroad. We are adaptable,
relevant and an integral part of The Army. We stand ready to answer the
call and with that bring the support of Hometown, USA to the forefront,
demonstrating the resolve of the American people. The citizen-soldiers
of the Army Reserve are proud of their country. They share a deep sense
of satisfaction and accomplishment in the peace and stability they help
create on behalf of all Americans. We are grateful to the Congress and
the Nation for supporting the Army Reserve and our most valuable
resource, our soldiers--the sons and daughters of America. Thank you.

Senator Stevens. Thank you very much. We have been joined
by my partner here. Would you like to give us your opening
statement, Senator?

STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. Thank you very much, Mr. Chairman. I would
like to join you in welcoming our witnesses this morning, and I
think we all know that since the very beginning of our Nation
we have depended upon our citizen-soldiers. At that time, they
were State militias, the forerunners of our National Guard, and
I think most of our school kids are well aware of the
Minutemen. You are their successors. I look upon the Reserves
and the Guard as an essential part of our defense, one that
deserves our full support, and should not be and cannot be
short-changed.
Over the years, there have been disagreements between
active and the Reserve forces. I am pleased that most of these
problems are past history, but there are many other concerns.
We find that it is still difficult to convince the active
component to procure new weapons for the Guard and Reserves.
All too often you have been getting the left-overs. I am
certain you know that with our budgetary picture of today, and
with transformation in the works, it is going to get a bit more
difficult to get more weapons. I hope we can do so in this
cycle.
Needless to say, military construction remains a real
problem, and here again I am certain the chairman can come up
with something. Our Reserve forces are being called on to serve
more often and in more challenging missions, but it is
difficult to get the full-time support that they require.
So Mr. Chairman, I thank you for holding these hearings,
and I look forward to hearing the testimony of our witnesses.
This is an important part of our defense.
Senator Stevens. Senator Dorgan, do you have a comment?
Senator Dorgan. Mr. Chairman, I have, as perhaps you do,
two other subcommittees meeting at the same time, and let me
thank the officers of the Reserve and National Guard for being
here. We get a lot of bang for the buck, as I think the
chairman and others have said. It is an awfully good
investment. We thank them for their service to our country, and
I am anxious to hear their testimony today.
Senator Stevens. Thank you.
Gentlemen, we have already heard from General Plewes. We
would now like to call on Rear Admiral Totushek.

STATEMENT OF REAR ADMIRAL JOHN B. TOTUSHEK, CHIEF,
NAVAL RESERVE AND COMMANDER, U.S. NAVAL
RESERVE FORCE, DEPARTMENT OF THE NAVY

Admiral Totushek. Thank you, Mr. Chairman, members of the
committee. Thank you for allowing me the opportunity to talk to
you about some important issues that are affecting the Naval
Reserve today. A few months ago, I had the pleasure of briefing
my top five priorities to our Chief of Naval Operations,
Admiral Vernon Clark, a former Naval Reservist himself.
In March, I had the honor of briefing the House Armed
Services Personnel Subcommittee on my highest priority, which
is manpower. Today, I am pleased to be before you to talk about
each of my top five, manpower, training, equipment
compatibility, force-shaping, and fleet support.

MANPOWER

Allow me to explain a little bit about my priorities,
starting with manpower. I have stated many times that whatever
else we will do, it will not matter much unless we can recruit
and retain a well-trained career force. This is key to our
success, and it is why we are offering bonuses for reenlistment
extension. A Montgomery kicker bill increase of $200 per month
for undermanned ratings, a program to allow conversions to
undermanned ratings and benefits, such as space-available
flights.
Clearly, recruiting remains a constant priority of mine in
an economy with a record-low unemployment rate, and where the
perception is that the active force and by extension the
Reserve force is shrinking. The fact is, the Naval Reserve
offers career-building jobs with extraordinary benefits to
qualified people. Our challenge is to identify them, introduce
them to the opportunities we offer, sign them up, and meet our
end strength targets.
To do so, we have added more than 90 Reserve recruiters,
tripled our advertising budget to $8 million annually,
individually contacted service members scheduled to leave duty,
built ties between the active and Reserve recruiters, and
better defined the career progression for my recruiting
professionals.
In addition, we are adding new nonprior service programs
that targets medical and seabee skills. My most pressing
funding needs are in the areas of recruiting, advertising, and
additional bonus money to entice sailors to change from our
overmanned ratings to those that are undermanned.
With regards to my training priority, we have Naval
Reservists drilling in every State in the Nation. Some are
close to their gaining commands in naval facilities, but the
majority are not. It is vitally important that we provide
realistic training that meets the Navy needs, whether our units
are in Alaska or Nebraska.

TRAINING

There are some promising developments in the works using
new technologies, but we need to continue to think innovatively
to conduct more practical training. Additional duty training
(ADT) school funding will be needed to give our selected
Reserve in all States the opportunity to satisfy their training
requirements and to be able to advance in rate. Lastly, we need
to increase inactive duty training travel (IDTT) funding so
that our heartland reservists can visit their gaining command
every quarter.

AIRCRAFT UPGRADES

Shifting gears to equipment and information technology (IT)
compatibility, the two critical funding priorities of the Naval
Reserve for the near term are aircraft upgrades and information
technology improvements. When completed, these initiatives will
provide the Naval Reserve force much-needed interoperability.
On the air side, that means replacing my aging C-9 skytrain
fleet. In April, we received the first C-40A clipper, and we
will receive an additional two C-40's by August of this year.
The new aircraft will allow us to continue our mission of
providing 100 percent of the Navy's worldwide in-theater medium
airlifts in support of the fleet, at the same time ensuring the
safety of our sailors and Marines, while meeting the new noise
and emissions standards. Our goal is to replace all 27 of our
aged C-9 aircraft, which will require a procurement rate of
three per year.
In addition, two of our four F/A-18 Hornet squadrons will
benefit from the purchase of 28 upgrade kits that will improve
radar systems, armament controls, weapons-station wiring and
cockpit indicators. We are pursuing funding to purchase
additional kits for our third squadron.

INFORMATION TECHNOLOGY

On the IT front, information technology affords us new
possibilities for improving efficiencies. For example, we have
embarked on IT upgrades that will streamline the process of
getting the right sailor to the right place at the right time
every time. Under the New Order-Writing (NOW) System
applications for active duty will become much more automated,
which will generate orders and travel itinerary with a
dramatically shorter lead time.
Correcting deficiencies, and maintaining existing IT Legacy
systems built on eighties technology continues to place a
strain on my Operations and Maintenance (O&M) appropriation. We
need to invest in new systems with data bases that are
compatible. We are a key player in the Navy-Marine Corps
Internet (NMCI). We are working with Navy to ensure that the
Reserve NMCI needs are met. However, additional dedicated
investments in O&M funds need to be made to enable our upgrade
of IT systems to take advantage of NMCI.

FLEET SUPPORT PRIORITIES

Lastly, but no less important, my force-shaping and fleet
support priorities. In some ways, the Naval Reserve is in an
enviable position. The active duty Navy has an increasing need
and appetite for Reserve skills. Many reservists possess skills
gained in the civilian workforce for which there is no direct
operational counterpart in the active force, and we work
closely with active manpower personnel on a daily basis to
better shape my Reserve force to meet fleet needs.
Though mobilization remains our primary mission, we have
provided close to 2\1/2\ million man days support to the fleet
in fiscal year 2000, and for fiscal year 2001, Congress added
$13 million to ADT training for fleet support, and $23 million
to Annual Training, which has allowed unprecedented levels of
assistance to the fleet. Additional ADT fleet support funding
will likewise be needed this year to meet anticipated demands.
In summary, Mr. Chairman, the Navy's ability today to tap
into its Reserve force is the reward of prudent investment in
Reserve people, equipment, IT, facilities, and training. As
with Navy, additional funds will be needed to support the
challenged Reserve programs I have just outlined to ensure that
we will be able to continue essential day-to-day peacetime
support to the fleet, and preserve the capability to surge
decisively in a time of war.

PREPARED STATEMENT

Thank you again, sir, for allowing me the opportunity to
appear before the committee, and I look forward to any
questions you may have.
[The statement follows:]

PREPARED STATEMENT OF REAR ADMIRAL JOHN TOTUSHEK

INTRODUCTION

One of my greatest satisfactions from my tour as Chief of Naval
Reserve is the acknowledgement by the Active Navy that the Naval
Reserve is crucial to their mission success. As this Subcommittee
knows, there had been reluctance by many to accept the fact that active
duty missions cannot be accomplished without the Reserve components.
Indeed, beyond the value of their military specialty training and
training for mobilization, Reservists provide an essential link to
American society. In many parts of the country, Naval and Marine Corps
Reservists are the only representatives of the Department of the Navy.
Yet despite our noteworthy accomplishments, we find ourselves at a
paradoxical crossroads, because our own recruiting and retention
efforts have been challenged by a near full-employment economy, when,
at the same time, the active force is relying more heavily on our
Reserve support to reduce stress on active PERSTEMPO. With an expanded
role to provide trained and equipped, cost-effective support to the
fleet, and an aging fleet of Reserve aircraft and ships, I believe
strongly that now is the time when we must make further investments in
the Reserve Forces of the United States.
I am confident that we are strengthening our management, increasing
our recruiting and retention efforts, and continuing to equip and
modernize our Naval Reserve Force to the best of our abilities: all to
meet the Navy's day-to-day challenges and maintain readiness for
wartime missions. As I briefly describe the status of our Reserve
Force, I will also explain my ``Top Five'' priorities, which are the
core issues I am focusing on to fully achieve the goals I have set for
the Naval Reserve Force of the future. As I discuss these priorities in
detail, you will notice that they closely align with the top priorities
of our Chief of Naval Operations (CNO).

PAYING DIVIDENDS TODAY!

As I consider the status of the Naval Reserve Force in relation to
the mission of our active force, I am reminded again and again--
sometimes quite starkly--that the world is still a dangerous place. As
actions in the Middle East over the past few months have shown, our
active and reserve Sailors put themselves at risk every day in support
of national policy objectives. The unsettling events around the world
clearly illustrate the need to maintain well equipped, trained, and
ready Armed Forces. But that capability does not come cheaply.
Naval Reserve Sailors are on difficult assignments--and on the
front lines--in some of the most hazardous areas where our Navy
operates. In the last year alone, we have responded to the call to
service by providing more than 2.5 million mandays of assistance to the
fleet. In response to three concurrent Presidential Reserve Call-ups
and to other crisis response operations, we are at work today in flash-
point regions such as the Balkans and the Arabian Gulf.
In supporting counter-narcotics operations around the world, for
example, Naval Reservists over the past year contributed 54 percent of
all the Navy's days spent underway and 41 percent of all naval flight
hours flown in support of the War on Drugs. Although our authorized end
strength has dropped to 88,900 Full-Time Support and Selected
Reservists from a high of 152,789 in 1990, we are fully employed and
are conducting daily fleet support operations around the world. There
is no shortage of work for Naval Reservists in their units or in the
Fleet.
Without Naval Air Reserve squadrons, Naval Surface Reserve Force
guided missile frigates, mine hunters and mine countermeasures ships,
or the dedicated augment units and staffs that constitute the Naval
Reserve, the active Navy simply could not accomplish its missions.
Fleet exercises could not take place without Naval Reservists. Routine
logistics support of forces deployed around the world would be
impossible without Naval Reservists. Sustained peacekeeping missions
could not be conducted without Naval Reservists.
Fortunately, where our skills are required by the fleet for
exigencies, the Reserve Force today is better equipped and more
dedicated than at any time in the past. A substantial portion of
certain critical missions can only be accomplished by Naval Reserve
surface and air assets. Here are just a few of the areas where the
Naval Reserve has become virtually indispensable: 100 percent of the
Navy's organic airlift capability; 100 percent of adversary support
flight hours, which simulate enemy aircraft for aviators preparing for
deployment; 100 percent of Inshore Undersea Warfare assets; 99 percent
of all Naval Control of Shipping assets; 93 percent of all Cargo
Handling assets; and 60 percent of all Navy Construction Battalion
forces.
Today's Naval Reserve Sailors maintain full-time operational
missions, serving seamlessly alongside active forces in such specialty
areas as intelligence, special warfare, public affairs, medicine and
dentistry. They operate fleet hospitals, aviation squadrons and mine
warfare forces.
By any standard, you will find that the Naval Reserve provides this
country with unsurpassed value. Our authorized 88,900 Full-Time Support
and Selected Reservists represent about 20 percent of the Navy's total
personnel strength at a marginal cost of only 6 percent of the Navy's
total operating budget. We say it over and over again, but it bears
repeating: the Naval Reserve is an astonishing bargain at only six
percent of the Navy's operating budget.

TOP FIVE PRIORITIES

A few months ago, I had the pleasure of briefing my top five
priorities to our new CNO, Admiral Vern Clark. For this fiscal year, I
have set the following priorities: Manpower, Training, Equipment
Compatibility, Force Shaping and Fleet Support. If we are able to
execute our plan in these areas, we will make significant progress in
continuing the Naval Reserve as a world-class organization. Let me
explain a little about some of our initiatives.

Manpower
I have stated many times that no matter what else we do well, it
won't matter unless we can recruit and retain a well-trained career
force. This is key to our success. It is why we are offering bonuses
for reenlistment and extension; a Montgomery GI Bill kicker increase of
$200 per month for undermanned ratings; a program to allow conversions
to undermanned ratings; and other benefits such as space-available
flights.
We are taking steps to ensure that our Sailors have the highest
quality workplace environment, that they are recognized and rewarded
for their work, and that they have input into improving their work
lives and running our force more efficiently and effectively.
Clearly, recruiting remains a constant priority in an economy with
a record low unemployment rate, and where the perception is that the
active military force--and, by extension, the Reserve Force--is
shrinking. The fact is that the Naval Reserve offers career-building
jobs with extraordinary benefits to qualified people. Our challenge is
to identify them, introduce them to the opportunities we offer, and
sign them up.
To do so, we have added 90 more Reserve recruiters; detailed 30
enlisted personnel into two-year recruiting billets; tripled our
advertising budget to $8 million annually; individually contacted
service members scheduled to leave active duty; built ties between
active and reserve recruiters; and better defined the career
progression for reserve recruiters. In addition, we are planning to add
a new non-prior service program that targets medical and Seabee skills.

Training
There are Naval Reservists drilling in every state in the nation.
Some are close to their gaining commands and Naval facilities, but a
large number are not. It is vitally important that we provide realistic
training that meets the Navy's needs, whether our units are in Norfolk
or Indiana. To that end, we've been able to increase funding to provide
for unit travel, and we've added special funding for schools. There are
some promising developments in the works using new technologies, but we
need to continue to think innovatively to conduct more practical
training. Forcing a Reservist to sit in a classroom for 16 hours a
weekend is forcing them out of the Naval Reserve.

Equipment Compatibility
To ensure that our Reserve Force equipment is interoperable with
the active force, we have begun replacing and upgrading Naval Reserve
air assets, and are working to set in motion substantial upgrades to
our IT systems.
On the air side, that means replacing our aging fleet of C-9
Skytrains. In April, the first C-40A Clipper was delivered and three
additional C-40A's will be delivered by August of this year. The new
Clipper will allow us to continue our mission of providing 100 percent
of the Navy's worldwide intra-theater medium airlift in support of the
Fleet, while at the same time ensuring the safety of our number one
resource and most valued asset, ``our people''. The C-40A delivery
begins the process of increasing safety, improving capability and
meeting environmental requirements. Our goal is to replace all 27 of
our aged C-9 aircraft.
Two of four of our F/A-18 Hornet aircraft squadrons will benefit
from the purchase of 28 upgrade kits that will improve radar systems,
armament controls, weapons station wiring and cockpit indicators. We
are pursuing funding to purchase additional kits for our F/A-18
aircraft.
Information technology affords us new possibilities for improving
efficiencies. For example, we are embarked on IT upgrades that will
streamline the process of getting the right Sailor to the right place
at the right time, every time. Under the New Order Writing (NOW) system
that we're working on, applications for active duty will become much
more automated and approved by the local command, which will generate
orders and travel itineraries within a much shorter period of time.
Similarly, travel expense vouchers would be submitted electronically,
resulting in rapid payment of claims to our Reservists.
Correcting deficiencies in the existing IT systems, built on 1980s
technology, has absorbed one-third of the Naval Reserve discretionary
funding in the past year. We are building a unified information
technology system that will eliminate existing barriers to Fleet
support, and which is essential to the Navy Marine Corps Intranet
(NMCI). We are a key player in NMCI and are working with the active
forces so that NMCI can meet our unique needs.

Force Shaping
The Naval Reserve is working closely with Fleet manpower personnel
to better shape the Reserve Force to meet Fleet requirements. Force
shaping tools include the use of bonuses, targeted recruiting and
retention efforts, and programs to transition Sailors from overmanned
to undermanned ratings. Reservists are being matched to specific job
requirements, and this allows the Navy to determine, at any given time,
specific skill requirements and where Reserve personnel are most
needed.
In late 1998, we introduced into the Naval Reserve a continuous
improvement initiative. Drawn from industry and academia, it is based
on a concept called ``Leading Change,'' and is built around time-tested
procedures for improving the effectiveness of large organizations. For
two years now, my Executive Steering Committee has been hard at work on
this undertaking.
``Leading Change'' is profound in its scope. It involves nothing
less than the systematic analysis of, and structured improvements in,
the Naval Reserve's fundamental ways of doing business. The road has
been long, but we have charted a course with distinct and measurable
goals, in the context of a clear vision for tomorrow's Naval Reserve.
The result will be a Naval Reserve much more responsive to the needs of
both the Reservists and the Fleet. We are well on the way toward
achieving that goal.

Fleet Support
The Naval Reserve contributed nearly 2.1 million man-days in
support of national defense during fiscal year 2000. More than 2,000
Reservists participated in fleet exercises outside the continental
United States while 1,100 Naval Reservists participated in exercises
stateside. Operationally, Naval Reservists 37,239 workdays of
contributory support to Fleet Air Mediterranean alone. Naval Reserve
air assets flew in support of Operation NORTHERN and SOUTHERN WATCH,
participated in counter drug operations in the Caribbean theater, and
supported Navy's aircraft carrier deployments. In addition to providing
Navy's entire air adversary training, the Naval Reserve provides 100
percent of Navy's intra-theater logistics lift.
Throughout the year the Naval Reserve safely airlifted more than
4.8 million pounds of cargo and 2,635 passengers in direct support of
carrier battle group (CVBG), amphibious ready group (ARG), and other
naval and allied units in the Mediterranean and Southwest Asia.
Additionally, Reservists filled key billets on the Commander Fleet Air,
Mediterranean (COMFAIRMED) staff in functions ranging from watch
standing to deputy commander. At any given time, Reservists are
performing annual training around the globe in such places as Korea,
Japan, Italy and Spain in support of Navy current operations. Notably,
following the bombing of the U.S.S. Cole, a Reserve C-20 and C-9
responded immediately to airlift Navy divers and a Naval Criminal
Investigative Service team to Yemen to assist in recovery and port
security operations. In addition, Navy Coastal Warfare (NCW) Group 2
Reservists were recalled to active duty at the request of Commander in
Chief, Central Command (USINCCENT) for ongoing force protection
operations on the Persian Gulf. In some ways, the Naval Reserve is in
an enviable position: the active duty Navy has an increasing need, and
appetite, for Reserve skills. Many Reservists possess skills gained in
the civilian workforce for which there is no direct occupation
counterpart in the Active forces. For fiscal year 2001, Congress added
$13 million to Active Duty Training for Fleet Support and $23 million
for Annual Training, allowing for increased levels of assistance.

AN ENVIABLE FORCE

The Naval Surface Reserve and the Naval Air Reserve forces deploy
assets that would be the envy of many individual nations.
Let's take a look first at the Surface Naval Reserve Force, which
includes many commissioned and augment units. The ship assets are as
follows: 8 Perry-class Guided Missile Frigates; 1 Newport-class Tank
Landing ship; 1 Mine Countermeasures Command, Control and Support ship
(U.S.S. Inchon); 5 Avenger-Class Mine Countermeasures ships; and 10
Osprey-class Coastal Minehunter ships.
Other Surface Naval Reserve resources include many other essential
specialties, such as mine warfare forces; explosive ordnance disposal
mobile units; expeditionary logistics support; cargo handling
battalions; construction battalions; joint and unified command staffs;
Fleet training teams; allied commands and staffs; mobile inshore
undersea warfare; Merchant Marine; medical; dental; fleet hospitals;
public affairs; special warfare; legal; and special boat units. It's an
extraordinarily impressive list of professional warriors and support
personnel!
The Naval Air Reserve Force operates some of the most sophisticated
aircraft anywhere, including numerous commissioned and augment units.
The Naval Air Reserve aircraft inventory as of April 1, 2001 consists
of the following:
--27 high-speed, medium-lift transport aircraft: the C-9 Skytrains,
(being replaced by the C-40A Clipper)
--18 C-130 Hercules transport aircraft
--6 C-20 Gulfstream long-range, high-speed, medium-lift transport
aircraft
--6 C-12 King Air, light, twin-engine, turbine-driven aircraft
--4 EA-6B Prowlers used for tactical electronic warfare
--8 E-2C Hawkeye early warning radar aircraft
--22 F-5 Tigers, used for air-to-air adversary training
--48 F/A-18 Hornets, for interdiction, adversary, close air support
and air combat
--16 HH-60H Seahawk helicopters used for combat search and rescue
--8 MH-53E Super Dragon mine countermeasures helicopters
--8 UH3H Sea King logistics helicopters (being replaced by the CH-60
Knighthawk)
--48 P-3C Orion land-based maritime patrol aircraft
--5 SH-2G Super Seasprite ASW helicopters (being replaced by the SH-
60B Seahawk ASW helicopter)
--8 SH-60B/F Seahawk ASW helicopters.
Other Naval Air Reserve assets include a range of specialty units,
such as fleet logistics support; fleet information warfare; strike
warfare; airborne countermeasures; combat search and rescue;
intelligence and cryptology; mobile maintenance facilities; audio
visual and combat camera documentation; tactical support; mobile
operations control; carrier group and air wing staff augment units;
naval meteorology and oceanography; tactical air control and squadron
augmentation units.
It's easy to see how the Fleet becomes dependent on its Reserve
Force when our men and women represent such a diversified array of
professional talent who seamlessly blend into our active forces.

FISCAL YEAR 2001 FUNDING OUTLOOK IMPROVED

Our operations, maintenance and personnel funding levels for fiscal
year 2001 are much improved, thanks to Navy support and Congressional
adds. As a result, we have increased the number of days of overseas
Annual Training and Special Training for Fleet support, and added more
funding for attending professional development schools.
A small policy initiative also helps us honor those who sailed
before us. As our retired shipmates and World War II veterans pass
away, Naval Reservists, as the Navy's representatives in thousands of
communities, increasingly have been called upon to assist in providing
funeral honors. It is gratifying that we have received additional
funding to support such a noble cause.

CONCLUSION

Our new CNO, who was once a Naval Reservist himself, has first-hand
knowledge of the importance of maintaining a strong Navy and Naval
Reserve. As Admiral Clark remarked at the beginning of his tenure in
July: ``The way ahead involves focusing on the Fleet; organizational
speed and agility; commitment to our proven strengths and values; and
commitment to our people as the Navy's most important resource.''
We underscore what the CNO says about our One Navy team:
``In a nutshell, this is who we are: credible, combat-ready,
forward-deployed naval forces, manned by well-trained Sailors motivated
by a sense of mission and a desire to serve, committed to their Navy as
their Navy is committed to them. We sail anytime, anywhere as powerful
representatives of American sovereignty.''
Every member of the Reserve Force--our Selected Reserve, our Ready
Reserve and our Retired Reserve personnel, more than 700,000 in all--
takes pride in our assignments, and in the opportunity to serve.
Today's Naval Reserve Force is sought after and relied upon by the
Fleet, yet still dynamic enough to be constantly re-evaluating itself
for more productive and more efficient service in the future.
At the beginning of a new decade, and a new national
administration, every Reservist should take stock of what we are: a
cost-effective organization of mission-ready men and women. Our
hallmark words: We are ready when called!

Senator Stevens. Thank you very much, Admiral. We have been
joined by Senator Cochran. Senator, do you have an opening
statement?
Senator Cochran. Thank you. I am glad to be here with you
today to thank those who are appearing to testify before our
committee for the good work they are doing. I know their
budgets are tight and they are being asked to do more and more
to share the responsibility for keeping peace in the world and
also maintaining security of our United States.
We are grateful to you for your continued work in that
regard, both the Reserves and the National Guard, and it is
good to have the component heads here today all together to
talk about your funding needs for the next fiscal year. I want
to be sure we have the money in our bill that will support what
you need to do your job. That is what the purpose of the
hearing is today.
Thank you very much, Mr. Chairman.
Senator Stevens. Senator Feinstein, do you have any
comments?
Senator Feinstein. Thanks, Mr. Chairman, no. I will await
questions. Thank you.
Senator Stevens. Thank you very much.
Major General McCarthy.

STATEMENT OF MAJOR GENERAL DENNIS M. McCARTHY,
DIRECTOR, RESERVE AFFAIRS DIVISION, U.S.
MARINE CORPS RESERVE, DEPARTMENT OF THE
NAVY

General McCarthy. Mr. Chairman, members of the committee,
it is my privilege to report to you on the status and future
direction of your Marine Corps Reserve, and to thank you for
your support as a real contributor to our total force. I
appreciate very much the opportunity and the honor to do that.

WAR-FIGHTING CAPABILITIES

The foundation of the Marine Corps is its war-fighting
capability. Whether the war-fighter's mission is to seize the
high ground, secure the beach, maintain air superiority, or
provide humanitarian relief, the Marine Corps active and
Reserve components routinely join forces to accomplish whatever
missions are assigned.
The value of the Marine Corps Reserve is measured in our
ability to effectively augment and reinforce the active
component, regardless of scenario, geography, or time frame. If
we are to sustain the Marine Corps Reserve's war-fighting
capability, we need the resources to maintain a high level of
operational readiness.
The Marine Corps readiness is a primary concern. Our
Reserves, like the active forces, needs adequate skills
training, professional military education, administrative
support, and well-deserved benefits. The challenge we now face
lies in recruiting and retaining a dedicated, talented pool of
Marines who will commit to both the present world operational
tempo and be prepared for whatever the future may hold.
To meet this challenge, the Marine Corps, both active and
Reserve, is focusing on four pillars of readiness. First, the
Marine Corps values its Reserve Marines and their families, and
we must develop family-oriented programs that will enable us to
meet our recruiting goals and to enhance our retention.
Equitable pay and benefits reward the Corps' most precious
asset, our Marines.

LEGACY WEAPONS SYSTEMS

Second, the Marine Corps must find ways to maintain and
upgrade Legacy weapons systems, and to adequately budget for
the associated operational cost The operating cost of our
aircraft are increasing, and some require upgrades to meet
today's requirements. Adequate funding ensures crew
performance, unit morale, and most importantly, mission
readiness.
Third, we are experiencing higher operational and
maintenance cost at our training facilities around the country,
yet that infrastructure cannot afford any more downsizing.
Inadequate and environmentally outdated training facilities
make the job of recruiting and retaining dedicated Marines even
more difficult. Inadequate training facilities jeopardize
mobilization, readiness training, and mission readiness.
Finally, the Marine Corps' effort to replace aging systems
and equipment is an ongoing process. We must find ways to
modernize our inventories and budget accordingly without
jeopardizing current mission readiness. Timely modernization
will ensure our capability to continue to defend national
interest.
Keeping the right number of Marines is vital to the total
force concept, and to the unwavering relationship between the
active and Reserve forces. The foundation of the Marine Corps
will be preserved if we recruit and retain talented and
dedicated Marines. When you look at the Marine Corps Reserve,
you see the Marine Corps, because our blueprint for the future
is the same.

PREPARED STATEMENT

Thank you very much, and I look forward to responding to
any questions that the committee may have.
Senator Stevens. Thank you, General.
[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL DENNIS M. MCCARTHY

Senator Stevens, Senator Inouye, and distinguished members of the
Committee, it is my privilege to report on the status and future
direction of your Marine Corps Reserve as a contributor to the Total
Force. On behalf of Marines and their families, I want to thank the
Committee for its continued support. Your efforts reveal not only a
commitment to ensuring the common defense, but also a genuine concern
for the welfare of our Marines and their families.
The Marine Corps Reserve continues to make an extraordinary
contribution, both at home and abroad. As part of our Total Force,
Reserve Marines augment and reinforce the Active Component, performing
a variety of missions including providing civil affairs expertise in
the Balkans, aviation support in Southwest Asia, and logistics support
in Central America. Reserve Marines and units participated in a variety
of exercises in locales as distant and varied as Germany, Romania,
Egypt, Macedonia, Korea, Thailand, and Australia. To quantify this
effort, Marine Forces Reserve (MARFORRES) deployed approximately 3,200
Marines and 1,200 Short Tons of equipment, via strategic lift, to
support our National Military strategy during fiscal year 2000. Force
deployments during the first two quarters of fiscal year 2001 show the
same level of effort.
Marine Reserve units and individuals participated in at least 75
percent of the counternarcotics missions assigned to the Marine Corps
in fiscal year 2000. In the United States, they trained to maintain
readiness for mobilization, and conducted community service projects in
their hometowns, thereby strengthening the link between the military
and our society. We continue our contribution to Marine Corps
operational planning as we review and implement even more options for
greater premobilization Reserve integration with active units.
My intent today is to quantify the state of the Marine Corps
Reserve with respect to the Corps' Four Pillars of Readiness: Marines
and their families, legacy systems, infrastructure, and modernization.
During my comments today, I will discuss the status of many programs. I
should note, however, that the programs I will discuss, and the
associated funding levels may change as a result of the Secretary of
Defense's strategy review that will guide future decisions on military
spending. I ask that you consider my comments in that light.
Overall, our budget has been barely adequate to sustain the
readiness of our Marines. We have been maintaining readiness at the
expense of modernization and maintenance of our infrastructure. Recent
spikes in the cost of utilities have put even this fragile balance in
jeopardy.

MARINES AND THEIR FAMILIES

The Marine Corps role as we enter the new millennium demands that
the Marine Corps Reserve be a ready, willing, and able contributor to
the Marine Corps' Total Force effort. Reserve Manpower Augmentation is
required in order to meet the Reserve commitment as a capable, ready
partner in America's force in readiness. Reserve manpower augmentation
consists of ADSW and a reassessment of the remaining Quadrennial
Defense Review (QDR) reductions in the Marine Corps Reserve. The Marine
Corps Reserve is no longer only a force for mobilization for Major
Theater War but is now a daily use force. We are using the Reserve for
manpower augmentation to Active and Reserve staffs, units, and exercise
forces with short-term, fulltime personnel to plan and perform
training, administration, maintenance and logistical support not
otherwise available through existing manpower levels or traditional
Reserve participation (drills and annual training). These additional
personnel are also of absolute necessity in maintaining our ability to
plan and participate in operational tempo (OPTEMPO) relief operations,
Joint and Combined Exercises, and essential combat, combat support, and
combat service support training. MARFORRES has traditionally provided
150,000 workdays per year in support of the Active Component--we
doubled that to well over 300,000 in fiscal year 2000. Our expanded
measures for OPTEMPO relief, including the two important actions of
recurring security deployments to Guantanamo Bay and the assumption of
the (United American States (UNITAS) deployment to South America in
alternating years, contribute to ADSW requirements outpacing available
resources.
The second issue affecting the first pillar of readiness is the
QDR. Although the last QDR initially led to tangible improvements, it
also resulted in a reduction in our end strength that essentially
removed the flexibility in meeting the personnel demands inherent in a
robust operational tempo. One of the major factors facilitating Reserve
readiness is the significant investment of active duty manpower in full
time support of the Reserve. The QDR directed reductions of active duty
support of the Marine Corps Reserve, particularly the Active Reserve
program, are challenging our ability to maintain readiness and meet
requirements for Reserve employment. Eighty-one percent of the QDR
Reserve reductions will have been taken by the end of fiscal year 2001
but any further reductions would negatively impact our ability to
provide OPTEMPO relief and maintain Reserve readiness.
Internal Marine Corps reviews, including the Fiscal Year 1999 Force
Structure Planning Group and Fiscal Year 2000 General Officers Future
Group determined that the 1997 QDR Reserve reductions require a minor
adjustment. An adjustment would stem the degradation of the Marine
Corps Reserve's capability to provide OPTEMPO and PERSTEMPO relief to
Active Marine Forces, maintain sufficient Full Time Support at our
small unit sites, and retain critical aviation and ground equipment
maintenance capabilities. Our plan calls for maintaining overall
Selected Marine Corps Reserve (SMCR) end-strength at 39,558 (including
2,261 Active Reserves) through fiscal year 2003.
The most sacred honor we can provide veterans is that of a military
funeral. The active duty staff members and Reserve Marines at our 185
manned sites performed approximately 5,500 funerals last year, a 45
percent increase over 1999. We project a 39-40 percent increase per
year giving us potentially 7,500 funerals to support this year. The
steps that Congress took last year to allow Reserve participation at
the inactive duty drill rate for funeral honors duty have helped us
meet this growing obligation. Our current Reserve end strength supports
funeral honors at our small sites (where there are less than 10 active
duty Marines on staff), not as a primary duty, but as one of the many
tasks incident to training and administering the Reserve and providing
a military connection to the local community. As a result, we have
realized increased operations and maintenance costs associated with
vehicle maintenance and fuel for transportation of funeral honors
parties and for the cleaning and maintenance of dress uniforms.
Continued support for military funeral honors funding, in our Military
Personnel and Operations and Maintenance accounts, is critical to
ensuring mission success in this most worthwhile endeavor.
Recruiting and retaining quality men and women in the Marine Corps
Reserve continues to be a challenge in today's competitive environment.
The economy has been strong and young people are presented with
numerous alternatives to military service. Our mission is to find those
who choose to manage a commitment to family, community, a full time
job, and the Corps. While such dedication requires self-discipline and
personal sacrifices which cannot be justified by a drill paycheck
alone, adequate compensation and retirement incentives are an element
of attracting and retaining quality personnel.
Because many of our Reserve Marines serve first in the Active
component, we continue to man transitional recruiting stations at
Marine Corps bases and stations to begin the prior service recruiting
process before Marines leave active duty. I appreciate the
Congressional support for the increased educational benefits and
reenlistment and affiliation bonuses that help us attract these Marines
to join and stay in our units. The transitional recruiters are also the
portal of entry for a program of high value to the Commandant, ``Marine
for Life.''
The Marine For Life Program is being developed to achieve the
Commandant's vision of ``improving assistance for our almost 27,000
Marines each year who honorably leave active service and return to
civilian life, while reemphasizing the value of an honorable
discharge.'' The Marine For Life Program will enhance current
assistance by providing valuable sponsorship to these Marines as they
transition to civilian life. The Marine for Life Program will build,
develop, and nurture a nationwide network of transitioning Marines,
veterans, retirees, Marine Corps affiliated organizations, and friends
of the Corps. The program will foster a mutually supportive life-long
relationship between the Marine, his/her Corps, and the public that we
serve, thereby strengthening our ethos of ``Once A Marine, Always A
Marine.''
During the past fiscal year we achieved 103.4 percent of our goal
for prior service and 102.5 percent for non-prior service Marines. It
was not easy. Our retention rates for Reserve enlisted Marines staying
beyond their initial obligation are also improving. We do, however,
still have some work to do in keeping non-prior service Reserve Marines
satisfactorily participating for the full length of their obligated
drilling commitment. The incentives provided by Congress, such as the
Montgomery G.I. Bill (MGIB), the G.I. Bill Kicker (Kicker), enlistment
bonuses, medical and dental benefits, and commissary and PX privileges,
have all contributed to the stability of our Force. These incentives
have helped us find and retain capable, motivated, and dedicated
Marines. Continued Congressional support of these programs is critical
to attracting and retaining the high-quality individuals our Corps
needs for the future.
The MGIB and Kicker, which can provide up to $600 per month for
college, is the most popular incentive we provide to Marines but it
must compete with the National Guard's enticement of a full paid
scholarship to a state run college or university. I appreciate the
additional MGIB funding the Congress provided in fiscal year 2001. It
expanded our ability to offer the Kicker to more Marines in critical
billets and helped to level the field of competition between the Guard
and the Reserve Component.
Our Career Management Team (CMT) continues to expand its efforts to
support ``Career Reservists''--those Marine officers and enlisted who
have completed their initial obligation and remain affiliated. The CMT
staff is available to provide record reviews and counseling, career
guidance, and promotion information to assist and guide Reserve Marines
in making the best possible career decisions. Via the CMT website,
Marines can access CMT services as well as find and apply for open
Reserve billets and Active Duty Special Work (ADSW) opportunities using
the Reserve Career Management Support System (RCMSS) database. RCMSS
also allows units and the CMT staff to contact Marines qualified for a
particular job, and provides units visibility of Marines who are
actively seeking Reserve career options.
Our benchmark for achieving our goals is simple--``One Corps, One
Standard'' for all Marines, Active and Reserve. The Marine Corps Total
Force System (MCTFS), our single integrated personnel and pay system,
encompasses the records of all Marines in a single logical database. To
meet the unique requirements of the Reserve, we are constructing MCTFS
compatible automated systems to reduce costs and provide better service
to our Marines. An example is the Marine Corps Medical Entitlements
Data System (MCMEDS) that automated injury claims processing for
Reserve Marines, reducing paperwork and facilitating rapid
determination of entitlements for the injured Marine. We will shortly
field our Reserve Order Writing System (ROWS) to integrate our orders
request and writing systems, facilitate reconciliation of funding
obligations, and ultimately interface with MCTFS and the Defense Travel
System. It will expedite orders and travel processing, and smooth the
Marine's transition to active duty, guaranteeing timely orders and pay
actions. We actively participate in development of the Total Force
Administration System (TFAS), a Marine Corps program to update and
further automate our Manpower Management System.
The U.S. Navy medical, dental, religious, and naval gunfire support
furnished to MARFORRES also contributes to our personnel readiness.
There is a requirement for over 2,700 Naval Reserve officer and
enlisted personnel to support MARFORRES. I enthusiastically support the
Navy plan to fund a full 15 day annual training for these sailors in
fiscal year 2002 and out. Their training alongside the Marines that
they support is essential to the successful accomplishment of our
training and operational mission. The Navy also provides near total
manning for two Status of Resources and Training System (SORTS)
reportable Marine Corps commands, the Medical and Dental Battalions of
the 4th Force Service Support Group, as well as significant support of
air/ground combat elements. I will work with the Director, Naval
Reserve to maintain a minimum of C2 readiness.

LEGACY SYSTEMS

Our second pillar of readiness, legacy systems, represents the
equipment we will fight with today--our near term readiness. These
systems are currently ready due to the hard work of our Marines and the
assistance of Congress in providing additional resources for
maintenance and spare parts. The cost, however, of keeping this
equipment ready continues to climb. In a constrained environment,
maintaining the readiness of aging equipment competes with monies that
would otherwise be spent on modernization. While we must maintain our
equipment, we cannot afford to continue to do it at the expense of
modernizing the force.
Maintaining our aging equipment continues to challenge the Force.
Even though the Marine Corps is replacing some equipment and
modernizing others through extensive modifications, these initiatives
will take a few years to complete. Since the Reserve generally receives
new equipment and modifications to existing systems after the Active
force, the equipment we currently possess will continue to age and
require more frequent repairs. Lengthy repair cycle times greatly
reduce the amount of time that reservists have for annual training.
Time is a valuable commodity that is extremely limited in the reserve
environment. The more burdensome these repairs become to our units, the
more the quality of training will diminish.
To maintain current levels of readiness, we must have sufficient
operations and maintenance funding for corrective and preventive
maintenance programs. Due to topline constraints, the existing depot
maintenance backlog for MARFORRES equipment is growing. Corrosion
control funding is, as always, a high priority to all Marine Corps
units. Current funding provides relief, but the pending requirement for
corrosion control repairs to equipment located at our home training
centers remains a challenge. The aging of our equipment plays a major
role in this area. We are outsourcing and competitively bidding some of
our intermediate maintenance requirements as an innovative way to
stretch the maintenance dollar. Two success stories are UNICOR Federal
Prison Industries and the Anniston Army Depot, both of which provide
competitive costs and a timely turnaround of a quality product.''
We are experiencing higher maintenance costs for our heavy and
medium mechanized weapons systems--M1A1 Tanks, Assault Amphibious
Vehicles (AAVs), and Light Armored Vehicles (LAVs). Our 135 LAVs
particularly have experienced high operational tempo and a consequent
increase in maintenance requirements. We are procuring dehumidification
systems to prevent the detrimental effects of moisture intrusion on the
sophisticated electrical and optical components of these ordnance
vehicles. Nonetheless, a shortfall in maintenance funding continues to
exist.
Our aviation equipment is facing a similar situation. With the
exception of our KC-130Ts and CH-53E aircraft, many of our aircraft are
approaching block obsolescence. Our CH-46E averages over thirty years
old--some of our younger pilots are flying the exact same aircraft that
their fathers flew. Continued aviation modernization is a critical path
to future readiness.
While on the subject of aviation, I would like to discuss our
Flying Hour Program. In fiscal year 2000 MARFORRES executed 100 percent
of the programmed funding while flying 92 percent of the programmed
hours. If we execute our current fiscal year 2001 Flying Hour Program
without additional funds--either an increase to topline or through
reprogramming--our squadrons will not have enough funding to achieve
the desired Primary Mission Readiness. There will also be a decrease in
Mission Capable/Full Mission Capable rates and a potential 6-8 month
recovery time for the re-qualification of aircrews. The prospect for
such a stand down is a major readiness concern.
Until the gap between the cost of our aging ground equipment and
aviation fleet and the requirement for modernization is addressed with
additional resources, we will continue to realize exponential increases
in the levels and frequency of maintenance necessary to achieve
acceptable levels of equipment readiness. Meeting these requirements is
critical. In most cases the Reserve will operate its legacy systems
longer than the Active Component.

INFRASTRUCTURE

Investment in infrastructure has been a bill-payer for near-term
readiness for eight of the last ten years. Maintaining and modernizing
our training center infrastructure has become extremely challenging.
Under current construction plans, the 24 sites owned outright by
MARFORRES are on a schedule to be replaced once every 100 years. Our
costs for facilities operations and maintenance have increased 20
percent in less than 3 years. This fiscal year we are experiencing
unusually high utilities costs, both at sites we own and those where we
must reimburse a host. In November 2000 we were alerted that our
electricity and natural gas costs at our facilities on Marine Corps
Base Camp Pendleton would increase by 87 percent and 60 percent,
respectively. These increases, in conjunction with current maintenance
and repair of real property projects of more than $21.6 million, exceed
the annual resources programmed for training. Rising infrastructure
costs, largely beyond our control, challenge our finite resources.

MODERNIZATION

MARFORRES' top modernization priority is to upgrade our fleet of 48
F/A-18A aircraft (4 Squadrons) with Engineering Change Proposal (ECP)-
583. While our Marines and their F/A-18A's performed superbly last year
in the Bright Star exercise, these are the same type aircraft that
could not be employed in support of Kosovo operations due to the lack
of self-designating capability. ECP-583 is a hardware and software
upgrade designed to make the current aircraft compatible both
operationally and logistically with other F/A-18C/D models utilized in
theater by CinCs or Marine Air Ground Task Force Commanders. This
upgrade provides the capability to self-designate precision munitions,
to employ the newest generation of air-to-ground/air-to-air weapons,
and to conduct night operations. Although billed as a modernization
program, ECP-583 is also a readiness and sustainment issue linked
directly to the roles and missions these squadrons uphold in the Total
Force. This Total Force program also includes 28 Active Component
aircraft for a total of 76. The modernization of these F/A-18A's will
make these Active and Reserve aircraft capable, relevant, and fully
interoperable in support of the Total Force Marine Corps. Current
funding will upgrade 22 active and 22 reserve aircraft to full ECP-583
standards, while 32 aircraft await funding for their upgrades.
Our second modernization priority is upgrading the remaining 11 of
our 21 CH-53E helicopters with the helicopter night vision system
(HNVS). The HNVS improves the capability to navigate and operate at
night and during periods of reduced visibility and supports the full
operational and logistical integration of Reserve forces with Active
forces. Another top priority is the KC-130T Avionics modernization/
standardization which closely parallels the USAF C-130 modernization
effort. The current Reserve aircraft configuration is not compliant
with emerging Communication, Navigation, and Surveillance/Air Traffic
Management or mandated Navigation/Safety requirements. Funding these
and other modernization initiatives to maintain readiness and safety
will facilitate the effective integration of Reserve aviation assets
with the Active Component.
While fixed and rotary wing aviation modernization are the most
pressing needs of the Marine Corps Reserve, they must not eclipse vital
ground combat and logistics modernization that will ensure the Reserve
remains an effective combined arms team. The Marine Corps commitment to
Reserve modernization to expand Total Force capability is demonstrated
by our plans to field the High Mobility Artillery Rocket System
(HIMARS) to the Reserve to provide all weather fire support for major
theater war. As currently planned, the fielding of the Medium Tactical
Vehicle Replacement (MTVR) and the HMMWVA2 to the Marine Corps Reserve
is scheduled to be completed by 2004 and 2005, respectively. These
assets will materially increase the readiness posture of the MARFORRES.
We are continuing to work with Headquarters Marine Corps and the Marine
Corps Materiel Command to develop optimum Total Force fielding plans
for new equipment.
The Marine Corps Strategy 21 reaffirmed that Reserve Integration
Expertise is a core competency of the Marine Corps. Ready, rapidly
responsive Marine Reserve forces are a vital part of the Marine Corps
and provide depth, flexibility, and sustainment. Modernization of our
Reserve force should parallel the modernization of our Active force if
we are to ensure our Total Force is ready, when called upon, to fight
and win tomorrow's battles. Modernization of equipment, along with
investment in infrastructure has been a bill-payer for near-term
readiness for eight of the last ten years. We must reverse this trend
and invest appropriately in these critical areas.

FUTURE ROLES AND MISSIONS

The value of the Marine Corps Reserve has always been measured in
our ability to seamlessly and effectively augment and reinforce the
Active Component. All operational units of the Selected Marine Corps
Reserve have been assigned to a unified combatant commander and
apportioned to the CINCs for war planning and are, in fact, included in
major theater war (MTW) plans. In the event of an MTW our Reserve
commanders know: when and where they can expect to mobilize and deploy,
what missions and tasks they will be expected to perform, and which
Active Component commander will employ them in combat. Most Marine
Reserve units are identified to deploy in the earliest phases of a
conflict, to include units identified to fall in on Maritime
Prepositioned Shipping equipment. These facts clearly demonstrate how
important the Marine Corps Reserve is to the total Marine Corps MTW
planning effort. Although our primary roles will not change, current
global conditions will require increasing contributions from the
Reserve to support Total Force demands as contributors to exercises,
OPTEMPO relief, and actual operations.
Operational tempo relief missions will continue to provide
increased opportunities for reservists to support the Total Force
effort throughout the world. Requests for reserve support cross the
spectrum of unit type and capabilities. This past year we supported
contingency operations by providing a Civil Affairs detachment for
Kosovo and KC-130 support for both Operation Northern Watch and for
forward deployed Marine Expeditionary Units (MEUs), relieving Active
component aviation units of the missions. Additionally, our Air Naval
Gunfire Liaison Companies (ANGLICO) supported both east and west coast
MEUs in exercises within the United States and overseas.
Outside of the Continental United States Reserve deployments in
fiscal year 2001 are planned to support contingency operations,
bilateral exchanges, and to provide OPTEMPO/PERSTEMPO relief to the
active component. These units will conduct live-fire exercises and
participate in amphibious, jungle, mountain, and cold weather training,
which will enhance unit and individual skills, proficiency, and
readiness. This Reserve participation includes: six New Horizons
operations conducted in Central and South America, two Civil Affairs
detachments to Kosovo for a six month rotation each, two Dutch
bilateral exchanges in Curacao, an Australian exchange in support of
Exercise Gold Eagle, and numerous Partnership for Peace Exercises in
support of the European Command.
This year the Marine Corps Reserve is also supporting two
additional OPTEMPO relief efforts. We have deployed a provisional
security unit from the 23rd Marine Regiment to Guantanamo Bay, Cuba to
serve a four-month deployment, relieving the Marine Corps Security
Force Battalion of the requirement to send one of its FAST platoons to
perform that mission. We have been tasked to assume the Marine portion
of the UNITAS exercise. The goal of this initiative is to assign the
UNITAS deployment to the Reserve every other year. We will begin
training a reinforced company from the 23rd Marine Regiment, this year,
in preparation for the 2002 UNITAS deployment. A robust Special
Training (ADSW) account is a critical element in meeting the
requirements of the Total Force.
The Marine Corps Reserve at the beginning of the new millennium
must be able to adapt to new missions in response to future challenges.
The role played by our Reserve units in Weapons of Mass Destruction--
Consequence Management (WMD-CM) will not detract from their primary
mission of augmenting and reinforcing the Active Component. The Marine
Corps Reserve, already ``forward deployed'' in cities across America,
can play an important role in supporting civil-military responses to
crises.
Given that we are to continue to increase the employment of the
Reserve in support of Total Force missions, we must maintain current
readiness while ensuring resources are available for modernization.
Congressional support for increased use of the Reserve has been a key
element in our Reserve Marines and Sailors providing OPTEMPO relief and
training alongside their Active counterparts without impinging on other
resources. Your support permits us to meet commitments that may go
beyond the normal two week annual training period. While the historical
Reserve mission to augment and reinforce our Active Component remains
our focus, the demands of this and emerging missions will increase
operational challenges and amplify the need to effectively resource the
Marine Corps Reserve. With proper planning that takes into account the
specific demographics of the Marine Corps Reserve, and with adequate
resources, we can do more and still take care of our Marines. We are
not yet approaching the limits on the use of the Marine Corps Reserve.
We are ready today, but our readiness has come at the expense of
investment in our infrastructure, modernization, and quality of life
accounts. We are ever mindful that it has been Congress' consistent,
steadfast, and unfailing support that preserves our ability to answer
the Nation's call. The Marine Corps appreciates your continued support
and collaboration in making the Marine Corps and its Reserve the DOD
model for Total Force integration and expeditionary capability.

Senator Stevens. General Sherrard.
STATEMENT OF MAJOR GENERAL JAMES E. SHERRARD, III,
CHIEF, AIR FORCE RESERVE AND COMMANDER,
UNITED STATES AIR FORCE RESERVE COMMAND,
DEPARTMENT OF THE AIR FORCE
General Sherrard. Mr. Chairman, Senator Inouye, members of
the committee, I am indeed proud to be representing nearly
74,000 men and women of the Air Force Reserve, as we have a
chance today to discuss our challenges and some of our
accomplishments with you today.
Our Air Force Reserve is strong and continuing to grow
stronger, with your help. Particularly, I need to thank you for
funding the pay raise above the employment cost index; for the
additional recruiters you gave us last year for recruiting and
retention; incentives you gave us which allowed us to have
pilot bonuses for our Active Guard and Reserve (AGR) pilots; as
well as provisions for the Montgomery GI bill kicker--
additional dollars for our reservists.

EXPEDITIONARY AEROSPACE FORCE

Today, our citizen airmen are engaged in missions around
the world, stepping up to the task with enthusiasm and
expertise. We are an integral partner in the Expeditionary
Aerospace Force of our Air Force. In cycle 1, which was
recently completed, more than 14,000 members of the Air Force
Reserve were participants. As we engage in cycle 2, we have
more than 12,000 members either engaged or will be engaged
prior to completion of the cycle.
We currently have more than 5,000 members deployed, both in
the States and outside the Continental United States (OCONUS),
with almost 1,300 of them being out of the country.
As we face the future, I am confident that it will be the
people of the Air Force Reserve, working seamlessly with our
friends in the Air National Guard and our active duty partners,
to assure our continued success as we provide the world's most
premier Aerospace Force.
Before I mention some of our challenges, I would like to
discuss what I believe are some of the reasons we are so
successful. First, our people are the best, and as has been
mentioned by my colleagues, we are, in fact, a reflection of
the active force that we support. This is so key, because they,
too, are also the very best that we could ever hope to have in
our military.
We have in our fold a sufficient number of prior service
members, and their experience is invaluable. We have individual
mobilization augmentees who bring very, very specialized
skills, which is also essential to our success and our service.
A pivotal factor to our success to date, is our organizational
contract-management of reservists by reservists. The support
for families, civilian employers, of the Air Force, and the
Department of Defense (DOD), of communities and, most
importantly, of Congress, are vital to our success and that has
never wavered.

READINESS

We are a combat-ready force, ready for deployment, because
we have one tier of readiness in the Air Force. Our readiness
standards are, in fact, measured by the active force, while
training is controlled by Reserve members. We train and deploy
with our active force. We have comparable and interoperable
weapons systems, and we believe that our force is ready, at any
given moment, to extend our capabilities whatever the Air Force
needs may be.

RECRUITING AND RETENTION

Our challenges include, as has been mentioned by my
colleagues, recruiting and retention. Overall, our force
remains at over 80 percent prior service, with high-quality
recruits available. However, the active duty force drawdown is
at an end, and so therefore we are looking at additional
nonprior service members to fill our recruiting needs.
That pool of eligible service members for us to recruit is
faced with a good economy. They appear to have a lesser
propensity to serve, and have abundant opportunities both for
college tuition assistance and things of that type, which make
recruiting initiatives very, very important for us.
We need to have the ability to offer incentives which will
help us enhance retention of those members beyond the minimum
satisfactory years of service to achieve a Reserve retirement.
It is essential that we keep them for the maximum period that
we can, and budgeting for recruiting on retention incentives
and advertising are a top priority. Resourcing additional
recruiters, leased office space, and advertising are critical
if we are going to have our message placed out in the public
where, in fact, we can have the opportunity to address
potential nonprior service individuals.
Additionally, resolution of follow-on missions for our C-
141 unit-equipped organizations, completion of our KC-135E to R
engine conversion programs, the rising cost of O&M with an
aging fleet, modifications of aging equipment, and then
providing facilities and infrastructure which meet the needs to
enhance readiness in our training are all key challenges that
we face and will continue to face. We must ensure that we have
modernization initiatives which are compatible with the active
programs to include new systems and upgrade of current systems.

PREPARED STATEMENT

I thank you for the opportunity to present our story today,
and I look forward to answering any questions that you may
have.
[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL JAMES E. SHERRARD III

Mr. Chairman, Senator Inouye, and distinguished members of the
Committee, I appreciate the opportunity to appear before you today. I
would like to thank the Committee for your continuing support, which
has helped your Air Force Reserve address vital recruiting, retention,
modernization, and infrastructure needs. Your passage of last year's
pay and quality of life initiatives were especially important as your
actions sent an unmistakable message to our citizen airmen that their
efforts are truly appreciated.
I am pleased to tell you that the Air Force Reserve continues to be
a force of choice for the Air Force and the warfighting Commanders in
Chiefs (CINCs), whenever an immediate and effective response is
required to meet the challenges of today's world. We are ready in peace
or war, available for quick response, and able to stay the course when
called upon.
Air Force Reserve Command (AFRC) members are essential to nearly
everything we do today, and we intend to do more. Our day-to-day
involvement has increased markedly in recent years. The Air Force
Reserve participated in 11 contingencies in the 37 years between 1953
and 1990, and in the last ten years we have played a significant role
in more than 50 major operations. This is part of life in the Air Force
Reserve and we are proud to do it. From the end of Desert Storm until
the 1999 Presidential Recall for Operation ALLIED FORCE, and in every
instance since, we have met these obligations with volunteers. The Air
Force Reserve ethic of volunteerism is something we are very proud of,
believing it reflects the quality and enthusiasm of our people.
People are our most important asset. In an effort to retain our
best and brightest, we need to reward our people through compensation
and promotion and ensure they know their efforts are appreciated. We
need to look after their families while they are deployed and reach out
to their employers with our thanks for their support. We need to ensure
that there is open dialogue among the troops and from the troops to me
to make sure that we're doing our job the best that it can be done.
More than ever, we need to continue to partner with you to ensure we
maintain the strongest air force in the world. In the Air Force
Reserve, we put people first, emphasize readiness, and continue to seek
balanced, time-phased modernization and infrastructure programs.
The Air Force is a team--we train together, work together, and
fight together. Wherever you find the United States Air Force, at home
or abroad, you will find the active and Reserve side-by-side. You can't
tell us apart and that's the way it should be. The bottom line is that
when the Air Force goes to war, enforces a peace agreement or
undertakes prolonged humanitarian missions anywhere in the world today,
the Air Force Reserve will be there. During my comments today, I will
discuss the status of many programs. I should note, however, that the
programs I will discuss, and the associated funding levels may change
as a result of the Secretary of Defense's strategy review that will
guide future decisions on military spending. I ask that you consider my
comments in that light.
Fiscal year 1999 ended with a bang, as Hurricane Floyd plowed into
the coast of North Carolina. As the flooding peaked, AFRC coordinated
with Federal disaster response personnel to bring in five HH-60
helicopters from the 920th Rescue Wing at Patrick Air Force Base,
Florida to initiate rescue operations. Over the next six days, Reserve
rescue crews worked day and night, flying 59 sorties and pulling 215
flood victims from rooftops, trees, cars, and isolated areas of high
ground.
Another Reserve mission, Coronet Oak, faced a very difficult
transition in 1999. Coronet Oak is an operation that provides C-130s
from Air Force Reserve Command and the Air National Guard to U.S.
Southern Command to provide airlift support in the Caribbean, and South
and Central America. When America transferred the Canal Zone back to
Panama in 1999, this long-established operation had to look for a new
home. At first, only temporarily placed at Muniz Air National Guard
Base in San Juan, Puerto Rico, it was decided to go ahead and make
Muniz the permanent location for the operation. Far from ideal for a
number of reasons, Muniz was still more cost effective than other
locations because basic facilities were available that did not need a
huge infusion of money to make them operable. Still, the year was full
of growing pains as new logistics trails had to be developed, work-
arounds had to be initiated for some of the facility limitations, and
so on. The missions continued to flow without a break, though, and our
crews flew countless sorties in support of counter-drug operations,
embassy resupply, and a variety of airlift requirements.

HIGHLIGHTS OF 2000

It was another busy, productive, but challenging year for Air Force
Reserve aircrews. Natural disaster responses, the relocation of a long-
standing forward operating location, an election year surge in
presidential and congressional airlift support, the growing pains of a
new deployment concept, the taking on of new missions, the introduction
of a new weapons capability--the Air Force Reserve was there. Through
it all, our outstanding people met the challenges, found ways to
succeed, and proved beyond doubt that the Air Force Reserve is an
indispensable part of America's Total Force military.
Unfortunately, the heavy rains of 1999 also brought on a potential
medical crisis caused by a super-heavy mosquito infestation. In these
opening days of the new fiscal year, AFRC stepped to the forefront
again with another of its specialized missions, aerial spray. The 910th
Airlift Wing, Youngstown, Ohio is the only unit in the entire Air Force
to provide this critical mission for disease suppression, natural
disaster relief, oil spill dispersion, and invasive species management.
In the aftermath of Hurricane Floyd, the 910th's specially equipped C-
130s logged over 100 hours of flying time spraying 1.7 million acres in
Virginia and North Carolina for mosquito control. Again, a superhuman
effort by a small number of Reserve crews responding to the needs of
their fellow countrymen.
Fiscal year 2000, also saw the worst forest fires in U.S. history.
Within the Air Force Reserve, only one unit, the 302nd Airlift Wing at
Peterson Air Force Base, Colorado, is trained to support the U.S.
Forest Service's fire fighting efforts with the C-130 based Modular
Airborne Fire Fighting System. Last year, the fires were so bad that
the 302nd was called early in the season and stayed until rain showers
in September finally brought some relief.
From the end of July to early September, 302nd crews flying two
aircraft completed 154 sorties in California and Washington, dropping
over 400,000 gallons of fire retardant. The crews logged as many as
eight sorties per day, going back for load after load of retardant to
attack critical points in front of the raging fires. Their efforts have
continued to pay off long after the fires died out, as the retardant is
also a fertilizer that promotes the rapid regrowth of the fire-charred
terrain, helping to prevent erosion as the land comes back to life.
An ongoing mission the Reserve is involved with which has an impact
on people's lives throughout the world is the transportation of
humanitarian relief goods under the auspices of the Denton Amendment
Program. This program allows DOD transportation assets to move
humanitarian cargo for free on a space-available basis. In fiscal year
2000 the Air Force Reserve moved over 1.9 million pounds of Denton
cargo, flying 122 missions. AFRC is the top supporter of the Denton
program year after year. It provides good training opportunities for
our airlift crews while enabling them to make a positive difference
throughout the world.
Though the Expeditionary Aerospace Force (EAF) was a completely new
concept for the Air Force, the Air Force Reserve's tradition of
training to be a deployable force allowed a relatively seamless
transition to the EAF and its force projection packages, the Aerospace
Expeditionary Forces (AEFs). However, Reserve deployments in the past
primarily involved aircrew members and maintenance support personnel,
so it was an adjustment for some Expeditionary Combat Support (ECS)
personnel such as security forces, civil engineering and services. The
transition was not without its growing pains, but after the first few
rotations, predictability and timeliness of requirements had vastly
improved, transportation was much more efficient, and working
relationships between AFRC and the various active duty organizations
involved in the AEF process had greatly matured.
Despite the initial challenges, AFRC's transition to AEF support
must be considered a success by any measure. The command more than met
its initial requirements in aviation operations, and support from the
ECS side was notable regardless of the problems they faced. The
exceptionally strong participation by AFRC security forces was
outstanding, and greatly relieved the high deployment stress of their
active duty brethren. Overall, more than 14,000 Reservists deployed in
support of the AEFs by the end of cycle 1, a testament to the
readiness, patriotism, and proud professionalism of the Air Force
Reserve.
I would be remiss if I didn't mention the outstanding support from
our more than 12,500 Individual Mobilization Augmentees (IMAs). Found
in nearly every career field, IMAs augment active duty manning by
filling wartime surge and national security requirements. Due to
sustained high OPTEMPO, active component Air Force intelligence relies
heavily upon ARC intelligence personnel to meet peacetime, surge and
wartime requirements. This intelligence force provides approximately 40
percent of the overall Air Force intelligence capability. IMAs in Air
Force Material Command performed more than 530 projects, ranging from
humanitarian services to highly technical resolutions for major support
challenges. As with all our reservists, IMAs continue to proudly and
professionally meet the challenges of integrating seamless support.

RECRUITING AND RETENTION

While some progress has been made in recruiting and retention, my
principal concern today remains attracting and retaining high quality
people in an increasingly competitive economic environment. The
additional recruiting funding we received last year was sincerely
welcomed and we are grateful for your support. In spite of accessing
nearly 9,500 personnel, which is our highest number of accessions since
fiscal year 1995, we missed our recruiting goal by 14 percent in fiscal
year 2000. However, our production recruiters continue to lead the
Department of Defense in annual accessions per production recruiter
with an average of over 38 accessions in fiscal year 2000. Equally
important to Air Force Reserve Command's ability to meet the
requirements being levied on us is family and employer support. Their
sacrifice and continual support make it possible for our members to
carry out their duties in such a spectacular manner.

Recruiting
Historically, the Air Force Reserve accession mix has been between
80-90 percent prior service, with 75 percent of those drawn from active
duty Air Force. High prior service accession rates have contributed to
making us one of the most experienced reserve forces in the world.
Moreover, we have found that prior service personnel are more likely to
be retained until the 20-year point or longer, making the force more
stable. In the past, we recruited heavily from trained personnel
leaving active duty during the force drawdown and we are currently
accessing more than 21 percent of the active duty Air Force recruitable
separatee market. However, the end of the active duty drawdown demands
new recruiting strategies and expectations. By fiscal year 2001, active
duty accessibles (those eligible to join the Air Force Reserve) equaled
less than one-third of those who left active duty in the early 1990s.
If we cannot maintain high accession levels in the prior service
market, we'll be forced to increase our non-prior service (NPS)
accessions to meet manning needs. As it is, NPS accessions required to
meet our recruiting goal may soon quadruple, from less than 1,000 in
the early to mid-90s to more than 4,000 in the outyears. As college
enrollment and funding opportunities increase, the declining tendency
to enlist in the military, a smaller prior service pool as well as the
decrease in propensity to affiliate after leaving active service, our
reserve recruiters will continue to find innovative ways to reach the
NPS market.
Yet, we're making positive in-roads with the NPS market. We believe
there are many outstanding young people across America who want to
serve their country, but they prefer to do it from home and on a part-
time basis. These are the people we are after, especially the ones who
are attending college, either full or part-time. To help us attract
these candidates and retain our current members, we profess the value
of the Selected Reserve Montgomery G.I. Bill (SR-MGIB) that pays up to
$9,468 in total benefits. The SR-MGIB is non-contributory on the part
of the reservist, and to be eligible, members must agree to a 6-year
enlistment. As an added bonus, applicants who enlist in selected career
fields that are in short supply can qualify for the SR-MGIB Kicker that
pays up to an additional $350 per month. Our NPS numbers are steadily
climbing and we're pleased with the progress we're making here. On
another front, we're asking all our people to become ambassadors for
the Air Force Reserve. Officially, we call it the ``Get One Program,''
and this initiative recognizes reservists who are successful in
referring potential applicants to speak with one of our Air Force
Reserve recruiters. Studies have repeatedly shown that most people who
join the military already know someone who is a member and has good
things to say about their experiences.
As of April 2001 we are meeting our fiscal year 2001 recruiting
goal and are hopeful that we will achieve our goal of 10,064 despite
the earlier mentioned barriers. We need to increase our recruiting
efforts and refocus our advertising to compete. In fiscal year 1999, we
increased our recruiting budget to $5.4 million and our advertising
budget to $8.7 million. We have increased our recruiting staff by
nearly 10 percent, adding 30 recruiters to help bring our numbers up.
Congress has been very responsive in helping us with additional
recruiters and funds to do this. Together, these initiatives should
help us turn the tide.

Retention
While we continue to meet our overall command retention goal of 82
percent, the strong economy has had a significant impact on our ability
to retain personnel--particularly in critical skills. The economy will
undoubtedly continue to challenge us in attracting and retaining the
skilled professionals we need, so we must find new ways to strengthen
our retention rates particularly for full-time pilots and second term
enlisted personnel. While overall officer retention rates are healthy,
the current pilot retention rates do not reflect the projected
escalating attrition rates that will challenge all Air Force
components. Historically, pilots stayed until retirement, but recent
indicators reveal an increase in the number of Air Reserve Technician
pilots who are leaving early. As with the active component, increased
hiring by major airlines, high OPTEMPO and perceptions of better
civilian pay and working conditions are the reasons for leaving. The
USAFR predicts a pilot shortfall of 325 for fiscal year 2002 based on a
35 percent Active Duty pilot capture rate. A Rated Management Task
Force has been formed to study this issue and develop a Total Force
approach to solve it. We hope that some of the pay incentives, as well
as other enhancements such as improvements in scheduling predictability
that the EAF provides, an increased use of telecommuting to better
manage ancillary training requirements, protection of current benefits
and increased parity of benefits will help us solve this problem.
These initiatives should have an equally positive effect on
retention of our first term airmen. Our retention rate in this category
remained equal to our fiscal year 1999 rate this past year, probably
due to OPTEMPO concerns. We believe our plan to relieve some of the
turbulence associated with OPTEMPO should turn the trend upward. In the
future, we will continue to focus on achieving an equitable parity of
pay and benefits, as well as some other important initiatives.
In sum, the matter of recruiting and retention is the issue of
greatest concern to me, and we are taking positive steps to fix this
situation as I lead the Air Force Reserve in this new millenium.

OPTEMPO AND READINESS

As full participants in the Total Air Force, our readiness remains
good overall, and we are part of nearly every Air Force mission. One of
the keys to our success is the leverage inherent in a fully trained and
accessible force waiting on call. In reality, today's global situation
dictates that we serve as a peacetime augmentation force as well as a
ready, wartime force.

Readiness
The current Reserve Component force structure is of sufficient size
and composition to meet the wartime requirements identified by the
Bottom-Up and Quadrennial Defense Reviews. Reserve missions and roles
have expanded, despite decreasing end strength. We are trained and
resourced to meet our part of the National Military Strategy and
currently are programmed with enough forces to help prosecute two major
theater wars. Air Force Reserve units maintain readiness levels on par
with active duty units. More than 95 percent of Air Force Reserve units
are currently combat ready, closely paralleling our active force.
Reserve units have comparable equipment in quantities proportional to
their active duty counterparts and participate in day-to-day
operations, exercises, and training. In addition, Reserve units train
to active duty standards and receive regular inspections from their
gaining major commands. Historically, during operational readiness
inspections, 100 percent of the inspected Reserve units received
satisfactory or higher ratings, with most of these units rated as
outstanding or excellent.

Accessibility & Volunteerism
Volunteerism remains our mainstay. The Air Force Reserve and Air
Force lead the way in providing responsive Reserve forces to meet
service and national needs. In the Persian Gulf and Haiti, as well as
on-going operations in Turkey, Bosnia, Southwest Asia, the Caribbean
and Central and South America, the Air Force Reserve responds to all
requests for additional forces with volunteers only. And, while the
1999 Presidential Recall activated approximately 1,400 Reservists,
hundreds more volunteered as well.
The Air Force Reserve remains on the leading edge of volunteer
participation for peacetime operations, as demonstrated by the
implementation of the Expeditionary Aerospace Force (EAF). By using
volunteers, we minimize potentially adverse impact on readiness and
training, recruiting, and retention. Long range Aerospace Expeditionary
Force (AEF) scheduling allows our personnel to plan well ahead and to
volunteer for deployments that best fit their schedules, permitting
better management of PERSTEMPO. Reserve resources integrate with those
of the Air National Guard and the active Air Force to provide maximum
capability for our AEFs.
Of concern is the impact of OPTEMPO on our Reserve families.
Between EAF, other operations, exercises, and required inspections,
participation rates continue to rise steadily each year. The Reserve
set a record pace for OPTEMPO in 1999 as a result of Operation ALLIED
FORCE. Then, an average of nearly 3,000 Reservists deployed overseas
each month and worked more than 712,000 Military Personnel
Appropriation (MPA) mandays, the highest number since Desert Storm. In
fiscal year 2000, our average number of personnel deployed overseas
averaged nearly 1,700 per month. We began fiscal year 2001 at a lower
number but grew to over 2,000 deployed in March. This total does not
include the number of Reserve Personnel Appropriation mandays and other
training days that also were worked. There can be no doubt that the
days of the ``weekend warrior'' are long gone.
This level of participation provides unique challenges for the Air
Force Reserve. Aircrew members are participating an average of 125 days
per year, with some weapons systems averaging even higher. Unit
personnel average about 90 days and Individual Mobilization Augmentees
(IMAs) average 69 days per year. This is in addition to their civilian
jobs and comes at a time when the economy is supporting near full
employment.

Approaching limits
Our force is leaning forward to meet each new tasking as it occurs,
but this is not without cost. While we have received few complaints
from our Reservists' employers, our people tell us that their bosses
have started to question their participation. Our solution is to
provide as much notice as possible of impending deployments as well as
to educate our employers about the importance of their Reservists'
contributions. We strengthen our partnership with civilian employers in
several ways. We foster two-way communication between Reservists and
their employers, sponsor Employers' Days and support Employer Support
of the Guard and Reserve (ESGR) Bosslifts, all of which give civilian
employers the opportunity to see what their Reservist does when he or
she is away from work. We also have vigorously pursued feedback from
employers and they have expressed an interest in monetary relief. We
strongly support efforts to recognize the sacrifices of employers of
members of the Ready Reserve and National Guard. As long as we have the
backing of our Reservists' employers, we anticipate being able to
continue to meet future requirements with volunteers. But we must
continue to be able to manage the rotation of our forces and the length
of their deployments.
The Air Force Reserve is also aggressively pursuing ways to better
leverage the time of Air Force Reservists. We are building a
telecommuting program, restructuring our inspections program and
reviewing ancillary training requirements. Finally, we continue to
pursue the quality of life issues that are key to our people. As noted
earlier, our focus is on entitlements, improved lodging facilities,
family services, reducing personnel turbulence and parity of benefits,
regardless of length of orders.

Reserve Health Care Reform
While pay is only one reason people join the Reserve, there is more
involved in their decision to stay than just money. A number of
intangibles are part of the total decision process, most of which are
characterized as quality of life issues. Advances in Reserve quality of
life are in no small part the result of congressional interest. A
number of recent initiatives have lightened the burden a Reservist
carries. In 1999, medical care for members who are injured while on
inactive duty was clarified and extended in the fiscal year 2000 bill,
dental plans were expanded and the Secretary of Defense was given the
authority to waive Tricare deductibles for dependents of members called
to active duty for less than one year. The positive effect these
measures have had on the USAFR is enormous. It provides peace of mind
to our members to know that they and their families will have access to
health care when they need it most.
This past year demonstrated that the health care provided for our
Reservists has cleared some major hurdles, but still has a few to go. I
know that health issues have been the subject of several hearings this
year. We appreciate the Congress' continued interest in the welfare of
our members.

MODERNIZATION

For the past 30 years the C-141 has been the backbone of mobility
operations for the United States military in peacetime and in conflict.
In the very near future the C-141 will be retired from the Active Duty
Air Force. However, the Air Force Reserve continues the proud heritage
of this mobility workhorse. AFRC crews will continue to fly the C-141
through fiscal year 2006. It is crucial that we remain focused on
flying this mission safely and proficiently until follow on missions
are found.
With the release of the Mobility Requirements Study 05 (MRS-05), it
is still uncertain as to follow-on missions for our C-141 personnel.
Replacement missions must be more than the insertion of another
airframe. They must be a viable mission that includes modernized
equipment. I will continue to push for modernization initiatives to
keep AFRC the ``go to'' organization when conflicts arise.
One of the most challenging modernization issues concerns our unit-
equipped KC-135s. Five of our seven air refueling squadrons are
equipped with the KC-135R, while the remaining two squadrons are
equipped with KC-135Es. The KC-135E, commonly referred to as the E-
model, has engines that were recovered from retiring airliners. This
conversion which was accomplished in the early- to mid-1980s was
intended as an interim solution to provide some improvement in
capability while awaiting the conversion to the R-model with its new
high bypass turbofan engines and other system modifications. We
continue to look for support to modernize our remaining KC-135E fleet.
As AFRC moves into the future and we analyze our interoperability
with the Active Component (AC), a key issue is our ability to work
within the AC structure while providing like capability. AFRC has 127
C-130s including the E, H, J and the N/P models. Air Mobility Command,
as the lead command for C-130 modernization, has published a ``Road
Map'' detailing the fleet modernization schedule. Near term
modernization specifics for the AFRC C-130 fleet are additional
removable cockpit armor sets for deploying aircraft, traffic alert and
collision avoidance systems, and autopilot replacements. These
modifications target aircrew safety and survivability. Future plans
look to include forward-looking infrared for the HC-130 fleet.
In order to fly productive and effective missions as part of the
Total Force, the theater CINC requires aircraft equipped with a core
combat capability. We call this core capability the Combat Quadrangle.
The quadrangle's sides represent our four focus areas: 24 Hour
Operation Capability, Combat Identification Capability, Precision
Attack Capability, and High Threat Survivability. All of these core
capabilities are required to maintain combat compatibility with the
active forces before the theater CINC will allow AFRC participation in
theater. With shrinking budgets and reduced active duty force
structure, the Air Reserve Components face a challenging goal. Reserve
aircraft are poised to make significant progress in the near future.
For example, Air Combat Command (ACC) is upgrading the F-16 Block 25/
30/32 in all four core areas with Night Vision Imaging System (NVIS),
Situational Awareness Data Link (SADL), smart weapons, and the ALE-50.
The A-10s are also poised to make progress in satisfying the core
capabilities of the combat quadrangle. ACC is upgrading the A-10 with
much-needed new Attitude Indicators for safety of flight concerns. The
most promising development is the revamped precision engagement program
that will incorporate SADL, targeting pods and smart weapons capability
by 2006.
The 403rd Wing at Keesler Air Force Base, Mississippi, oversees
both the Weather Reconnaissance and ``Slick'' J-model conversions for
the Air Force Reserve Command. Once conversion is complete, the 53rd
Weather Reconnaissance Squadron will consist of 10 WC-130J models and
the 815th Tactical Airlift Squadron is scheduled to have 8 C-130Js.
Presently, there are four WC-130J models at Keesler undergoing
Qualification Test and Evaluation (QT&E). All 10 of the WC-130J
aircraft were to be at Keesler in the first quarter of fiscal year
2001, but discrepancies discovered during the QT&E are delaying AFRC's
acceptance of the aircraft from the manufacturer. AFRC is working with
the manufacturer to resolve the QT&E recognized deficiencies.
The acquisition of the LITENING II targeting pod marked the
greatest jump in combat capability for AFRC F-16s in years. At the
conclusion of the Persian Gulf War, it became apparent that the ability
to employ Precision Guided Munitions, specifically Laser Guided Bombs
(LGB), would be a requirement for involvement in future conflicts.
Without this capability, AFRC F-16s took a backseat to other fighters
that could employ LGBs. A joint effort with the Air National Guard
resulted in the fielding of a targeting pod equivalent or better in all
aspects to what active duty fighters were using. Delivery of this
targeting pod, LITENING II, began last spring, just in time to support
an AFRC F-16 deployment to Operation Northern Watch in support of AEF.
LITENING II affords the capability to employ LGBs effectively in both
day and night operations, any time at any place. This capability allows
AFRC F-16s to fulfill any AEF tasking requiring a self-designating
targeting pod platform, providing needed relief for heavily tasked
active duty units. This acquisition has put AFRC F-16s at the leading
edge of combat capability, second to none, and ready to deploy and
operate in any theater of operation.
In the early 1980s as an initiative to improve readiness in the
Reserve Components, Congress provided funding through an appropriation
called the National Guard and Reserve Equipment Appropriation (NGREA).
Public laws and legislative language provided that this equipment
appropriation would be intended to enhance readiness and combat
capability, and to resolve the modernization issues of the reserve
forces. The Air Force Reserve Command quickly put it into use as the
primary source for modernizing its fleet of aircraft. It procured new
weapon systems, miscellaneous and special operations equipment. With
NGREA, the AFRC was able to fix many shortcomings in many operational
aspects. However, several years ago, the Department of Defense
initiated a shift in the equipping philosophy by encouraging the
Services to be more responsive in funding the equipment needs of its
Reserve components. This requires the Air Force to be more cognizant in
the budget process by providing the necessary equipment and
modernization funding for the Reserve and Guard. As the implementation
of this initiative took place and NGREA levels declined as planned
(from as high as $362 million in 1992 to as low as $5 million in fiscal
year 2001).
With potential elimination of NGREA, modernization and relevant Air
Force Reserve mission capabilities and combat readiness remain top
priorities in a very tightly constrained fiscal environment.

NEW MISSIONS

New missions picked up by AFRC this year support Air Force Material
Command (AFMC) with their Test Support and Depot Flight Test
requirements. As Reserve Associate programs, AFRC provides personnel to
man these two programs while the aircraft and equipment will be owned
by AFMC. The Test Support program at Edwards Air Force Base involves
flight testing of new aircraft modifications and equipment. The Depot
Flight Test program involves the flight testing of aircraft that are in
the maintenance depots for periodic maintenance and overhauls. These
are excellent missions for the Air Force Reserve as they take advantage
of the high experience levels generally found with Reserve personnel.
To date, AFRC has approximately 75 percent of these new positions
filled, and operations procedures and agreements are still evolving,
but we are looking forward to a long and successful Reserve presence
with these important test missions. Congressional support of these
mission transfers in the fiscal year 2000 Defense Acts was instrumental
in starting these efforts successfully.
In another first, the Air Force Reserve became active in the
operational test process last year as well. The 403rd Wing at Keesler
AFB is working hand-in-hand with the Air Force Operational Test and
Evaluation Command and Air Mobility Command (AMC) as operational
testing required to bring the new C-130J into the inventory continues.
The C-130J has many improvements over the older variants of the C-130.
Updated engines provide greater power and fuel efficiency and the
modernized avionics are a great step forward for this workhorse of our
airlift fleet. Changes in the cabin area have also reduced the time and
effort involved in loading and unloading cargo. The 403rd Wing's 53rd
Weather Reconnaissance Squadron is also working with AMC's 33rd Flight
Test Squadron to complete operational testing on the Weather
Reconnaissance version of the C-130J to replace their aging aircraft.
The 944th Fighter Wing, Luke Air Force Base, Arizona, is scheduled
to transfer from Air Combat Command to Air Education and Training
Command (AETC) with student training planned for July 2001. This
conversion is the result of an identified F-16 Formal Training Unit
(FTU) shortfall that was addressed at the 1996 Aircrew Management
Summit. The unit will provide Total Force support for the active duty,
Air Force Reserve and Air National Guard that is needed to accomplish
F-16 formal training requirements and satisfy the determined FTU
shortage.
AETC undertook a study to assess the feasibility of Air Reserve
Component Formal Training Unit associate units and approved a program
at Corona Top in June 1999. This concept made more active duty fighter
pilots available for operational assignments while retaining an
experienced Reserve Instructor Pilot cadre to train students in the F-
16. Activated in January 2000, the 301st Fighter Squadron operates
under the integrated associate concept which requires a manpower and
administrative commitment from the USAFR while flying hour, aircraft
and facilities are provided by the active duty.
The 94th Airlift Wing (AW) at Dobbins ARB, Georgia, transferred
from Air Mobility Command to Air Education Training Command in October
1999. The unit converted from a Combat Support coded mission to a
Training coded mission. It was determined that the Air Force needed
additional C-130 FTU capability and AFRC could provide that support.
With a significant portion of the tactical airlift mission in the Air
Reserve Components, the additional schoolhouse-basing requirement was
necessary. The unit conducts comprehensive C-130 training for both the
H-2 and H-3 models and is already producing students. With an fiscal
year 2003 production goal of 72 pilots, the 94th AW will also train
navigators and flight engineers, all to augment the Total Force.
In fiscal year 2000, Air Force Reservists joined the 414th Combat
Training Squadron, the ``Aggressors'', as associate members. The
program established a Reserve associate organization collocated with
the elite 57th Wing at Nellis Air Force Base, Nevada. The Aggressors
provide expert simulation of potential threat systems and tactics
during the advanced composite force training conducted on the Nellis
ranges over Southern Nevada. The most notable of these exercises is the
world-renown Red Flag. The objective of adding reserve personnel is to
retain corporate knowledge pertaining to adversary threat and
operational expertise in the Aggressors. Additionally, it allows the
Aggressors to select from an expanded resource pool to enhance the
training received by the Combat Air Force.
Two USAFR full time enlisted positions were established with the
Thunderbird Demonstration Team at Nellis in fiscal year 2001. These
individuals perform aircraft maintenance duties of Crew Chief and
Aircraft Specialist. This mission is considered associate in nature as
the reserve personnel are assigned to the Thunderbirds and integrated
within the unit.
Today's Air Force Reserve Space Program is an operationally
integrated space force that will continue to grow in a robust, highly
technical environment. The Air Force Reserve 310th Space Group is the
first Air Force Reserve organization totally dedicated to leveraging
Air Force Reserve talent to space operations. They will continue to
meet the challenge of providing leadership and a vision of future Air
Force Reserve space operations involvement.

FINAL THOUGHTS

In summary, Air Force Reserve Command is committed to meeting our
people, readiness and modernization challenges, so we remain a fully
integrated partner with the Air Force. Reservists with the support of
their families and civilian employers enable AFRC to be fully combat
capable and meet its worldwide commitments.
Mr. Chairman, I thank you and your committee once again for your
assistance in making us part of the worlds best Air Force, the USAF. I
appreciate the opportunity to meet with the committee today to share my
views with you and I look forward to answering any questions you might
have for me.

RECRUITING NONPRIOR SERVICE PEOPLE

Senator Stevens. Thank you very much. Each of you has
mentioned in a way the possibility of acquiring people who have
no prior military service, and I was wondering about that the
other day. Do you have sufficient tools and authorization to
reach out and attract young men and women to come in who have
no prior service and give them training so they could, in fact,
be part of a deployable force within a period of time, and what
is the cost of that, compared to the cost of acquiring someone
with prior service? General Plewes.
General Plewes. We are going under a change right now. In
the past, we did about 50 percent prior service and 50-percent
nonprior service. This year we are exceeding our goals in
regard to the nonprior service folks by about 122 percent and
missing our goal on recruiting prior service by 80 percent. We
are at 80 percent of where we should be. We are undergoing a
shift there, and it has, as you mentioned, some very
interesting and important consequences for us. First of all, it
increases the training load in our initial entry training base,
and we are now competing with the National Guard, which is
going through the same kind of a change, and the active force
for training slots in the highest times of activity during the
year.
Senator Stevens. Take us through that, General. What do you
do if you attract someone--let us say they are out of high
school and a year in college. What do you do with them when
they sign up?
General Plewes. We give them up to a year to schedule
themselves to go into the regular training program, which is
the same training program that the active force does.
Senator Stevens. How long does that take?
General Plewes. That is usually a 4-month program, and it's
up to 6 months in some cases.
Senator Stevens. They have to work out an opportunity to
leave their employment?
General Plewes. That is correct.
Senator Stevens. There is no other way to do it at night
and weekends?
General Plewes. No, sir. We have a split options program
where they can do it over the course of two summers, if they
are going to school, for example, and we make it easy for them
to do that. Otherwise, they do essentially the same thing to
get into the service as the active duty soldiers do, but that
does have repercussions for us. First of all, it increases our
training bill.
Senator Stevens. Tell us about that, too. How does it
increase the cost?
General Plewes. Because the prior service folks that come
to us are previously trained, they already have the training
and the skills they need. They just easily come over to us and
enter our units. So the folks who are nonprior service have to
be not only recruited from recruiting stations around the
country, but they have to be provided, initial entry training.
Then the units have to train them in their additional skills
when they get back. It does increase the training bill.
Senator Stevens. We are not talking about specialists now.
We are not talking about medical people. This is just a general
comment.
General Plewes. It is a general comment across the board.
Senator Stevens. For riflemen?
General Plewes. That is correct.
Senator Stevens. Admiral, what is your experience?
Admiral Totushek. We are a little bit different. We have
got a unique situation where we recruit nonprior service people
only if they have a skill that we can use in the Navy. We do
not go out and get a generalist. We are looking for specific
skills.
Senator Stevens. What do you do when your enlistments fall
off?
Admiral Totushek. The enlistments of the nonprior service
people?
Senator Stevens. The prior service people.
Admiral Totushek. That is why we are out there in this
market, because we cannot--if you take the people that leave
active duty every year, throw out the ones that are too senior
or do not fit the skill set we are looking for, if we recruit
every one of them we would not make our goal, so we have got to
be in this market, and that is why we are in that market, but
not in as big a way as some of the other services.
In our particular service, because they have the skill
already we need, we take them to a nonprior accession school
that is 2 weeks long, and then we spend the rest of the year
working with them in their centers to turn them into a sailor.
Senator Stevens. Thank you. Let us move along. General
McCarthy, what do you do?
General McCarthy. The Marine Corps Reserve, since it is
organized exactly like the active, or almost exactly like the
active component, has essentially the same demographics, so it
is primarily a first-term force.
Senator Stevens. Can you become a Marine Reserve without
prior service?
General McCarthy. Yes, sir. About 65 percent of the
drilling reserves are nonprior service.
Senator Stevens. How long does it take them to become
qualified?
General McCarthy. Over all, it takes about 9 months to a
year, but they go through exactly the same recruit training,
they go through exactly the same initial training, the initial
combat training and so forth.
Senator Stevens. It is the same assignment, then, with the
marines, right?
General McCarthy. Exactly.
Senator Stevens. Why would I not just join the Marines if I
was going to do that?
General McCarthy. Many change their mind after they go to
boot camp and switch over and stay on active duty, which is
fine with us, but many want to come back to their home town.
They want to pursue a career or go to college. We do not have
an exact number on it, but we think that about 35 to perhaps up
to as high as 40 percent of the Marine Corps, of the enlisted
Marines in the Marine Corps Reserve are college students, but
they take a year off, they go to recruit training, they go to
initial combat training, get a skill, and then come back and
start their education.
Senator Stevens. What is the age limitation of getting in
the Reserves, in the Marines?
General McCarthy. Sir, I believe it is 28, but I ought to
take that question for the record to be 100 percent sure.
[The information follows:]

Generally, the maximum age that Non Prior Service
applicants can enlist in the Marine Corps Reserve is 28 years
of age, inclusive. Our policy is that an applicant must be
accessed onto active duty in the Marine Corps Reserve prior to
their 29th birthday. Commanding Generals of the Marine Corps
Recruiting Regions may waive the maximum limit up to age 35.

RECRUITING

Senator Stevens. General Sherrard.
General Sherrard. Sir, as I mentioned in my opening
statement, we are about 80 percent prior service. That is
really the key to our success, because we are able to grab that
highly experienced member and bring he or she into our force
and they step up as a full combat-ready individual on day one.
Senator Stevens. Is that true for other than pilots? Do you
have greater administrative----

NONPRIOR RECRUITING

General Sherrard. Yes, sir. We accept them across the
board. But as I previously mentioned, the low number of prior
service is a real issue for us. In the early nineties there
were some 50,000 members eligible who were separating from the
Air Fore. Today it is about 15,000, and we are in competition
with the Air National Guard, as well as with the other Reserve
components for those members. Thus, we are being forced to go
look at that nonprior service individual in much greater
numbers than we ever have in the past, and that does, exactly,
as General Plewes said, it does drive up our training costs. It
extends the time for that member to attain the combat-readiness
level necessary for them to be ready and able to deploy with
the units.
So we have got to make certain that we retain those members
we have today, and then for every active duty member that
separates, we need to do our dead level-best to have an
opportunity and a place for them inside our force, and make
certain our entitlements and the benefits make an attractive
offer for them. With the economy being so good, there are a lot
of opportunities out there for them to go and engage in and not
bring that real investment that we have made, that the American
taxpayers have made in those individuals, back into our Reserve
force to be used.

PILOT RETENTION

Senator Stevens. It was about 18 months ago we were told
the reenlistment rate for pilots had turned around. We used to
get about 60, 70 percent of them on the first time for
reenlistment, and we were told it was about 27, 29 percent
actually reenlisting. Did you do any studies? How many of those
did you pick up in the Reserve, if they did not stay on the
Active Air Force? Did enough of them keep contact with you?
Were you able to recruit enough of those people into the
Reserves to maintain the strength?
General Sherrard. We maintained our strength. We could
certainly take more. We did not get them all, and that is the
battle. We are retaining about 83 percent retention on our
pilots. It runs around 84 percent of our----
Senator Stevens. Back up.
General Sherrard. Excuse me, sir?
Senator Stevens. That is back up. We were told it was very
low. Oh, this is Reserves, pardon me. I was talking the Regular
Air Force now.
General Sherrard. We try to bring as many active duty
separates into our fold, as possible. I do not have actual
numbers, sir, which show you how many of those we hired. I will
tell you, depending on the organization and the locale, there
are some that have waiting lists and others that have vacancies
today, but in our Reserve force today we are roughly 200 pilots
under what our requirement.
But the important thing is, retention, and retaining those
members so that we do not lose them. We are seeing, as I said
earlier, there has been an increase in recent years for
members, when they get 20 satisfactory years they are willing--
or are stepping up and saying ``I have to depart, I cannot
afford to give you the time that you are asking for me to
continue to operate.'' So we need to have some type of
incentives, not only pilots, but across the entire spectrum, to
carry those members to the max extent possible inside their
career, whether it be their mandatory separation, or if they
are enlisted their high year tenure date.
Senator Stevens. I do not want to belabor this now, but it
looks like we are going to have to start some innovative
concepts, perhaps even a summer school type thing for college
students between their semesters so they can take a summer and
in 90 days become a part of the Guard and Reserve forces. We
have got to do something innovative, I think, to pick up the
pace of attracting these young people if we want to expand the
way it looks like we are going to have to expand in the near
future.
Senator Inouye.
Senator Inouye. Thank you. I would like to follow up where
you just left off. There was a time, and we hate to admit this,
when recruiting was not that difficult, when the economy was
bad, or when there was a hot war going on there were those who
wished to avoid the hot war by getting into the Reserves. I can
understand that, but today we have a different situation.
For example, a recent study indicated that a little over 5
percent of our population between the ages of 18 and 65 have
seen any military action, put on the uniform. Over 94 percent
of our people between the ages of 18 and 65 have never put a
uniform on and, as a result, you have most of our employers
with a little or no military background and, as such, may have
some difficulty really appreciating what military service is,
as far as our country is concerned.
Add to this another dimension, that the new military is
becoming high tech. A few days ago, I went to an exhibit here
in the Senate which showed the infantry rifleman projected for
10 years from now. He looked like a spaceman, you know, with
the Star Wars helmet and body armor, and all of this, and
obviously he happened to be someone who knew something about
high technology if he is going to fire a rifle around the
corner through some kind of scope.
When you add all of these things--I must congratulate you
for what you have done in your recruiting so far, but as the
chairman has indicated, I think the time is coming when
recruiting the proper man and woman for the positions you have
is going to become almost impossible. I for one have seriously
thought about the possibility of reinstating the draft again.
Senator Stevens. I thought you were going to say
reenlisting again.
Senator Inouye. The studies I have seen would indicate that
we are at a very crucial point. All the services are now taking
the leap forward to become modern, and if you are going to be
compatible with the active forces you will have to keep up with
them. I do not know if the budget calls for that.
Add to this another element that was not in place 15 years
ago, the operational tempo, the op tempo of the Army, for
example, in the Guard and Reserves, I think it is 20 times what
it used to be 15 years ago, and I cannot imagine what the
employers are saying to themselves.
So when you add all of these up, I think the chairman is
right on target, we had better sit down and figure out, how we
are going to get these men and women to fill these slots. You
know, we are not just looking for category 4's now. We cannot
be satisfied just with category 3's, so Mr. Chairman, I think
we have got to do something.
Senator Stevens. It calls for some innovation, it really
does.
Senator Inouye. Senator Dorgan had to leave the hearing,
but he had a few questions he would like to submit.
Senator Stevens. Yes, sir.
Senator Cochran.

TAX REFORM

Senator Cochran. Mr. Chairman, thank you. One thing that
occurs to me that we can do in this debate on our tax reform
issue is include the provision that I have heard is needed in
the Reserves, and this may apply to the National Guard as well,
for people who are going to drill and incur out-of-pocket
expenses for bills or lodging and the like, I understand that
those that are not reimbursed now cannot be deducted from
income tax, but to make those deductible would be a benefit
that might keep somebody going to the drills and staying in the
Guard and Reserve who might drop out. Is that a consensus among
the Reserve forces today?
Admiral Totushek. If I could speak for the group, I would
say it is. It will be a cost to the Guard and Reserve, because
we recruit an individual, but we retain the family, and any
break we can give them will get that family to want to stay.
Senator Cochran. But as I understand it, too, that
legislation that we have pending in our Finance Committee here
in the Senate, and I am cosponsor of it, also provides a tax
credit to employers as incentive to let them employ somebody
and still not suffer unnecessary financial harm, because that
person is going to be away from work from time to time. Is that
something that you think is also needed?
General Plewes. Yes, sir. I will just comment on that, if I
could. First of all, our employers are doing wonderful things
for our soldiers. We have very few cases in which there are
issues between employers and soldiers. But there is a cost to
the employer when the soldier is deployed, and that cost
includes, not only the cost of the substitute for that
employee, but also the lost productivity. A tax credit would, I
think, go a way toward taking care of that.
Senator Cochran. There are two parochial issues in
procurement that have been brought to my attention. We have a
Raytheon plant in our State and we were told that two of the
highest modernization priorities, one in the Army and the other
for the Marine Corps, is in the hands of this company that make
these modernization changes.
One has to do with the aircraft in the Marine Corps,
upgrading the air control radar that provides information and
helps you better protect troops in the field during battle. Is
this something that is an unfunded need for the Marine Corps
that we should consider putting in our bill?
General McCarthy. Sir, the aircraft upgrade is for our F-
18A models, to enable them to fire precision-guided munitions,
and we are in the process right now of upgrading those aircraft
a few at a time. Both the active component and the Reserve
component have aircraft to be upgraded, and as it stands right
now we still have both active and Reserve component aircraft
that require that upgrade.
Senator Cochran. I understand, too, that the Army has a
Sentinel battlefield radar where you are trying to modernize
and upgrade that. That is also something that I think the
contractor in Mississippi could provide. Is that a need that is
unfunded in this budget request?
General Plewes. I will have to get back to you on that,
sir. It is not part of the needs of the Army Reserve. I believe
it is part of the active force, and I will have to get back to
you on the funding.
[The information follows:]

SENTINEL BATTLEFIELD RADAR

Although the Army Reserve does not have any requirement for
the Sentinel, the Total Army requirement is 228. Of that
number, 140 have been funded.

Admiral Totushek. If I could, the Naval Reserve is
upgrading our F-18's as well. It is a similar, same contractor
item that we need to upgrade our F-18's as well, so it is an
unfunded need for us.
Senator Cochran. That is good to know. Thank you, Mr.
Chairman.
Senator Stevens. Senator Feinstein.

TERRORISM

Senator Feinstein. Thanks, Mr. Chairman. Gentlemen, I
wanted to confine my time to the issue of terrorism. Last
month, Senator Kyl and I, as the chair and Ranking Member of
the Terrorism Subcommittee of Judiciary, heard the Hart-Rudman
report, and their belief, that commission's belief is that the
largest single threat we face is a major terrorist incident in
this country.
The 27 National Guard Weapons of Mass Destruction Civil
Support Teams are supposed to be the backbone in the United
States defense system in the case of a terrorist attack on
American territory. They are supposed to be active by this
spring, and yet their preparedness and management has been
criticized by a whole host of Government reports. In addition,
DOD has certified them as, quote, not ready, unquote.
The main criticism, as I understand it, is that these teams
would arrive too late at an incident to really be effective.
What is your assessment of the criticism, and what can be done
to improve the preparedness of these Civil Support Teams? Any
one of you that wants to go first would be fine with me.
General Plewes. The next panel may be able to more
specifically address the issues with the teams that are being
established, but all of us have capabilities within the Reserve
components that are necessary if we are to make a national
response to some of these threats.
For example, in the Army Reserve I have 70 percent of the
Army's chemical, which equates to over half of the Nation's
chemical defense in our force. I have over 70 percent of the
hospitals as well. We are training with and supporting the
National Guard in these matters, and I believe that we are at
the first step, only the first step of being prepared in these
areas.
Senator Feinstein. So these teams, in your view, are not
ready?
General Plewes. I cannot assess whether those teams are
ready. I will say that the teams are the first step, and that
there is a very large component of Reserve support behind them.
So there are two different things I think we can look at here.
Senator Feinstein. Does anyone else want to comment on
that?
General McCarthy. I would just comment again, the teams are
not within either my purview or expertise, but like the Army
Reserve, the Marine Corps Reserve is, as they say, forward-
deployed all over the country, and so it is prepositioned to
provide assistance, and we consider that one of our missions,
and something that we have resources that can be put at the
Nation's disposal and, like everybody else, we have a long way
to go in terms of preparing for that, but that is clearly an
issue that we are engaged in.
Senator Feinstein. Well, now I am really concerned, because
clearly, if you gentlemen do not know, the chances are that the
support efforts are not available, and are not going to be very
effective, and I am very concerned, because both from my
Intelligence Committee briefings as well as what we have done
in Judiciary, we are not ready to respond to any kind of a
major terrorist act, and there is no real attribution, nor is
there anyone really in charge that I can see at this stage. So
my concern is that if the Guard is going to be the heart of
this sort of national support effort, and you gentlemen are the
head people, what are you going to do?
Senator Stevens. Senator, if I may, the Guard will be up
next. These are the Reserve forces.
Senator Feinstein. Is not the Reserve involved in that as
well?
Admiral Totushek. Not directly. That is what we are trying
to say.
Senator Feinstein. Then I must apologize to you.
Admiral Totushek. But the point is, we all do have
capabilities. Part of the issue, as you kind of touched on it
there is who is in charge, and it starts off to be a Federal
Emergency Management Agency (FEMA) kind of issue, and if it
becomes nationalized and those Guard teams kick in, any of us
who happen to have forces in that area would be put on notice
to provide forces, depending upon the size and the scope of the
catastrophe.
Senator Feinstein. Because what I do is, I go back to my
days as mayor. If there were to be a major terrorist attack, I
would need somebody to pick up the phone on a national level
and say, I need help, and I need it right now. I mean, it is
hard to believe that I would call FEMA for that to be able to
really mobilize. Whether it is a military response or a Federal
Bureau of Investigation (FBI) response, that response has to
happen right away.
Senator Stevens. Senator, if I may interrupt again, those
are the hearings going on upstairs right now, our committee and
Armed Services and Intelligence, and I think Commerce to some
extent, and we are trying to find out--there are 46 different
agencies now charged with some portion of the response to
disasters, and we are trying to find out----
Senator Feinstein. I know that, Mr. Chairman. I have had
those briefings in the Intelligence Committee. I am aware of
it. I have also read all of the reports.
Senator Stevens. We are trying to work out answers to your
questions. We are trying to work out, with the administration,
an answer to your question of who should be in charge, but if
we may, we could go right to the Guard forces and you could ask
that question of them, because they are the ones that currently
have the assigned responsibility, if that is all right with you
gentlemen, and you Senators, we will excuse you gentlemen and
we will be back to you after we listen to the Guard perhaps
sometime.
I do want to have this dialogue, though, about enlistments,
and I want to suggest to you we may have to convert some of
your positions to civilian positions, and let you bring people
in without putting them through this training process,
particularly in the IT area, the medical area, and other areas,
and see what we can do to give you additional people that you
do not have to train, but they are going to do things in
peacetime, and you can concentrate on training people for
wartime.
Thank you very much, gentlemen. We will talk to you later
if we may.
We would like to call up the Guard, and Senator, I do not
mean to interrupt you or in any way be offensive, but that
hearing, we have got 4 days of hearings with this committee and
Armed Services, and you are a member of two of those
committees.
Senator Feinstein. Yes, and we have had the briefings, and
they have been disappointing at best.
Senator Stevens. Thank you very much to the Reserves.
National Guard Bureaus

STATEMENT OF GENERAL RUSSELL C. DAVIS, U.S. AIR FORCE,
CHIEF, NATIONAL GUARD BUREAU
Senator Stevens. We are now going to hear from the
leadership of the National Guard, Lieutenant General Russ
Davis, Chief of the National Guard Bureau, Major General Roger
Schultz, Director of the Army National Guard, Major General
Paul Weaver, Director of the Air National Guard.
I congratulate you, General Schultz, on your third star.
General Weaver, I understand this may be your last appearance
before us. We want to go on record immediately to thank you for
your dedicated service and for your assistance to this
committee over the years. We look forward to your statements
here today, and I believe that if you could--I have to chair
that other hearing at 11:30, so Senator Inouye will continue
this, but we would appreciate it if you could keep your
statements as short as possible, and we will go immediately to
Senator Feinstein so she can ask her questions.
Senator Feinstein. Thank you. I will not repeat it, but if
you gentlemen can respond, that would be terrific.

WEAPONS OF MASS DESTRUCTION

Senator Stevens. The question is, who is in charge?
General Davis. Well, we just had a statement yesterday.
Prior to yesterday, the Assistant to the Secretary of Defense
for Civil Affairs, or Civil Support was the position that was
in charge of weapons of mass destruction in any of the
incidents and all the operations relating to that. There were
some other subordinate agencies within the Department of
Defense who are working in conjunction with that position.
Yesterday, it was announced that all those activities would
move to the Assistant Secretary of Defense for Special
Operations and Low Intensity Conflicts.
Senator Feinstein. Can you comment on the Civil Support
Teams, and the reports that have come out saying that they are
not ready, and that they were due apparently to be ready and
deployed this spring?
General Davis. Yes, ma'am. There are a number of issues
associated with that. The Department of Defense Inspector
General, they report, after having gone out and talked to the
teams, and looked at their equipment and made some assessments,
those, some 26 issues came out of that. One of the issues dealt
with the issue of doctrine training, to what standard, and to
do what, as a specific mission.
These teams were really designed to do three things, to get
to an area and assess what was there, if it were a chemical,
radiological, or biological incident, to determine what the
agent was, and to pass that information back, number 1.
The other thing they were to do is advise on the kinds of
measures that you take. If it is a biological incident, say, as
an example, smallpox or something like that, know which
agencies are available to assist, and the local population, if
it is in a city, or if it is in county, they would go and they
would assess what is there and then they would advise them, if
it is biological, you need medical personnel, you need this,
because they have medical personnel on these teams.
These teams are 22 people, and they are highly trained
folks who have been training for about 2 years, and they have
met all of the training standards that we have established for
them. We are working our way through some additional issues.
Unique for this operation, ma'am, are things like, we tried to
put together these teams in a 2 to 3 year period.
The norm for establishing a brand-new operation like that,
with the training and the equipment, and teaching people to
operate the equipment, is about 5 years, to establish the
doctrine, get all the training programs, get them certified and
that kind of a thing. In an effort to fast-track, or what is
called spiral development in the research and development
community, in order to do that, you are doing a lot of things
simultaneously, and we missed a few beats in the process of
that.
The report deals with the fact that we have some equipment
which has not been certified. It is a mobile analytical lab. It
is a vehicle, and into that we put in equipment, a gas
spectrochromography, or something like that. What you do is,
you hold it out and it will give you an analytical, both in
terms of what the agent is, the quantity, that is the relative
strength, which will give you an indication of what you need to
be doing, whether it is deadly or not.
One of the difficulties with this piece of equipment, it is
designed to connect to a communications vehicle, which will
give it communications, satellite communications and back-
reach. What we would hope to do is analyze what is on the site
and then send it back--if it is biological, send it to, say,
the CDC, the Centers for Disease Control, and they would verify
it, but that is a secondary verification.
The equipment was not certified. Most of the pieces of
equipment individually were, but when you put them all together
they did not quite operate the way they should, and that is
what the team wrote up, and that is one of the reasons the
teams were not certified, but as far as individual people go,
they have done the training that was required.
There was some discussion in the report about how they were
evaluated. They did an external evaluation where the United
States Army sent some teams out and gave them some scenarios
after they had received individual training, institutional
training, and what we call collective training, where they all
get together as a team and train, and as a result of that, the
Army said they felt they were ready.

STATUS AND LOCATION OF CIVIL SUPPORT TEAMS

Senator Feinstein. Unless the other gentlemen have a
response in addition, let me ask this question. When will the
teams be ready, and how are they going to be geographically
deployed when they are?
General Davis. I will handle that, if you do not mind,
ma'am. We do not know exactly when the teams will be certified.
That report--and it has been adopted by the Department of
Defense, and the Army and the Guard are working very closely
together as a part of a team to make sure that we have all of
those requirements met.
The result of that report puts us on two courses of action,
number 1, to get the teams certified first and foremost, and so
we are working with the Inspector General, we are working with
the United States Army, and we are working with some
subordinate commands within the United States Army and
Department of Defense to see and make a final determination of
what needs to be done, what are the next five, six, eight, ten
steps that need to take place, and then what do we need to do.
We are in the process of working that out. We have much of
our work already done, but there are meetings ongoing, I
believe later this week--I want to say Thursday, ma'am, I
believe, to continue to work that, so that part will get the
teams certified. We are hoping that will get done sometime in
the next 60 to 90 days.
Senator Feinstein. And then will the teams be
geographically distributed?
General Davis. The teams have already been geographically
distributed, at least for the first 27 teams, ma'am. We
initially received 10 teams for the National Guard. We put
those teams in the 10 FEMA regions, the Federal Emergency
Management Agency regions around the country, because that is
really how we are, at this point at least, designed. The
Federal response to anything that happens, we do it by FEMA
region.
Those initial 10 teams were put into place, and we used a
150-mile radius of action for deploying those teams. It was
very quickly decided that those were not enough teams, because
we were not covering enough of the population. Seventeen
additional teams were given to the Guard, and through a
Department of Defense program they looked at such things as, in
locating the next 17 teams, where would they be in relationship
to the first 10, the population base they would cover, as they
were trying to cover the maximum population for the United
States, the geography of getting a team to some of those
locations, and so there were about four or five factors that
were included.
As a result of these factors being applied, the decision
was made on the basing of the second grouping of teams, some
17, and those 17 teams are in the process, they have completed
their individual training, a lot of the institutional training,
and they are working their way through the collective training.
Of the 17 teams, 12 have completed their training at Fort
Leonard Wood, training on the equipment, and then finding out
what they need to do. We have two additional teams that are out
there now who will wrap up their training at the end of this
week, and we have three additional teams. Those have already
been decided on in terms of geography.
If I might, ma'am, the next part of this program following
certification will be to go out and look at the entire program,
what we call a program review, and other things they will look
at is, how many teams do we need in our country, or they will
try to make an assessment of that.
There were five additional teams that were allocated last
year. It is the department's approach to do this study,
comprehensive review of the teams to decide if we have enough
teams, do we need more, and where should they go, so these five
teams will not be deployed or designated until that study is
complete, and that study should be complete about 1 August,
ma'am.
Senator Feinstein. Thank you very much. Thanks, Mr.
Chairman.
Senator Stevens. I am glad you asked the questions. We need
to keep these things clear as to how we are proceeding. I think
this is the most important issue we have with the Department of
Defense and the executive branch as a whole, is how can we
assist to make sure we have the capability to deal with the
potential threat that seems to be increasing as far as weapons
of mass destruction. Thank you, Senator.
Gentlemen, General Davis, would you like to summarize your
statement?

SUMMARY STATEMENT OF LIEUTENANT GENERAL RUSSELL C. DAVIS

General Davis. Mr. Chairman, distinguished members of the
committee, I thank you for the opportunity to come and testify
before you and make a presentation, very short. We have
submitted an official statement for the record, posture
statement, but I would like to summarize a few of the things
that are going on in the National Guard.
I will talk in general summary about the National Guard and
specific programs we do at the national level, and then Major
General Schultz on my right will talk to the Army Guard issues,
and Major General Weaver on my left will talk to the issues
that impact on the Air Guard, and then we will all be prepared
to handle any questions you have.
But increasingly, the National Guard is playing a
significant role in our national defense, particularly since
the drawdown of the active components has started in the early
nineties, where they have drawn down in the area of around 38
to 40 percent. The National Guard has played an increasing role
with respect to providing forces to the Commanders-in-Chief
throughout the world.
As a result of this activity, and our being a force
provided to both the United States Army and United States Air
Force, our people are very busy. We have increased the tempo
with which we operate about 50 percent above what we were doing
last year. You talked to some of those issues, and we have some
statistics in terms of retention, but we would suggest that we
are not--we are not--being overtasked.
We need to look at how we are tasking our folks, and
General Schultz will talk to most of those issues, but as we
have engaged in activities in peacekeeping in Kosovo and
Bosnia, to include last year, where we had the 49th Division
over there as the command and control element for Task Force
Eagle, some 6,000 people we had over there from 11 different
countries, and our two-star Division Commander was in charge of
that operation.
For the first time since the Korean War we have had a Guard
commander in charge of active Guard and Reserve forces deployed
forward, plus the soldiers of 11 nations in that multinational
brigade. The Air National Guard has flown missions in Northern
Watch and Southern Watch. Their tankers participated in the
Allied force, and the airlifters are working on a continuous
basis, and so we are very heavily engaged in both the Army
Guard and in the Air Guard.
In the Army Guard, as an example, we had our first battery
of Patriot missile personnel in Riyadh, and they are being
guarded, by the way, by the Minnesota National Guard, those
patriot folks from Alabama, and that is kind of a first for us,
too, as we deployed forward our combat forces of the National
Guard.
While at the same time we are doing this, what we call our
Federal mission, taking care of the issues of augmenting the
Army and Active Air Force, we are still doing missions at home.
We have folks out on the line, bagging sand. Just recently in
North Dakota and up in Minnesota as a result of the Red River,
and certainly down along the Mississippi River. I happen to
have an association with Iowa, and we have had that happen a
number of times, and I spent a little time over there myself
working issues, but fires, floods, hurricanes, those kinds of
issues, the Guard is out there responding.
President Bush said recently that because of the nature of
the threat, the National Guard will be used in some different
ways than maybe we have been used in the past, and we encourage
that and we support that. We will transform our forces to meet
whatever challenge is there.
We have done that in the past for 364 years, sir. We have
had situations occur where we have had to change the nature of
the Guard, from the early days of the muskets to the modern
days of Apache Aircraft and Patriot missiles to F-16's, and our
first line tankers, KC-135's, but we need to continue to
modernize our equipment, and we need to be allocated resources
for these new missions, and we talk about resources, it comes
in the form of, number 1, perhaps dollars, but as importantly,
full-time manning.
We have to have full-time manning, the people to do the
job, to take care of the soldiers and airmen and make sure they
are paid, to make sure the equipment is kept up to standard
between the drill weekends, between those active duty periods
when our soldiers and airmen show up. We need to make sure that
we continue to modernize that equipment that they have.
Much of the equipment we have, as is true in the active
component, was purchased a number of years ago, so we need to
add dollars to that. The previous panel talked to
modernization. We have got to do that, and recapitalize those
assets so we will have first-line assets.
As we become more expeditionary in the Air Force, and as
the Army transforms to keep pace with what the active component
Army is doing, and allying their forces to remain relevant and
ready, we have got some challenges, but we want to continue to
serve our communities, our States, and the Nation, and that is
what the Guard is for, and that is what we think we can do.
Homeland security, I will talk about that a moment. As that
emerges, I would suggest we have been in the homeland security
business in the National Guard for 364 years, protecting our
country. If we go back to the Nike missile era of the late
fifties and the sixties and early seventies, we had that
mission in the Army National Guard. Air defense of our
continental United States was done by the Air National Guard,
so we know we can participate in that mission and be a part of
that, and we do not think we have to modify our forces a lot.
Certainly we will have to make some modification of them, but
we think we can do it.
In the area of counterdrug we have an excellent program
where we go out and we interdict drugs as they come into the
country, and we work very closely with law enforcement
agencies. In the process of that we go to schools and work
demand reduction programs to try to teach kids the horrors and
pain that is caused by drugs, and we have some programs there.
We have youth programs, and one where we have a science-
based program called Star Base, where we go out and emphasize
science and mathematics in schools. We have another program we
call our Challenge program. It is a 22-week residence program
for kids 16 to 18 years old, high school dropouts who have an
opportunity to turn their lives around. We have a 6-month
program and then there is a year-long mentorship program
following that. That is another program that has been
excellent, I think, for the country.
We are involved in doing some things in the State
partnership program, where we have aligned States in the United
States with countries in the former Soviet Union and former
Warsaw Pact, and we are working issues with those. It starts as
a military program and has expanded in a number of other areas,
and we would be happy to talk about that later.
The Reserve Component and Automation System (RCAS) is a
true success story. We revamped that program in about 1995 and
moved on with that. That is a program for the Army National
Guard and the Army Reserve, where we put together programs so
that we will be able to more quickly and more ably manage our
organizations.
As a result of that program and the infrastructure that was
put in place, we have a distance training program, where we are
able to go out and train some of our soldiers without them
having to come into the armory, or certainly go off to schools,
the same thing in the Air Guard, and we have put together about
two-thirds of the classrooms that we will need and require for
that.
Just in summary, I want to say since Desert Shield and
Desert Storm we have increased our operational tempo quite a
bit. It is having some impact, but as we look at it
statistically, not a significant impact. We are busier this
year than we were last year. We are trying to figure out how to
do that best.
We are concerned about the length of deployments, and we
are working some issues in that arena, but we think we are
probably a pretty good force for the Nation because of our
cost. We only pay our soldiers and airmen when they show up for
work. We have a small cadre of folks who are there full-time.
The last item that I would like to talk about is military
construction. We have a number of facilities in the Guard, our
quality of life is where the soldier and the airman works, so
that is very key to him or her. We do not have facilities like
recreation and child care and that kind of thing, although we
are looking at child care, because it has a similar impact on
the National Guard.
Our diversity program--we want to make sure that we have
opportunities for all of our people--is going very well.

prepared statement

I thank you for the opportunity to make my opening
statement, and I would defer to General Schultz.
[The statement follows:]

Prepared Statement of Lieutenant General Russell C. Davis

NATIONAL GUARD POSTURE STATEMENT FOR FISCAL YEAR 2002
AROUND THE WORLD, THROUGHOUT OUR STATES, WITHIN OUR COMMUNITIES

EXECUTIVE SUMMARY
Today, more than ever before, the National Guard is actively
engaged in national defense. Since the drawdown of active component
forces in the early 1990's, the National Guard has been a significant
provider of forces to the Commanders in Chief around the world.
Currently, over half of all Army and Air Force personnel are retained
in the reserve components.
In fulfilling this role as a force provider, the National Guard has
transformed from an organization designed for mass mobilization in the
unlikely event of a major global war to an integral member of the Total
Force, actively engaged in peacekeeping and combat operations around
the world. When the Texas National Guard sent its 49th Armored Division
to Bosnia last year, it marked the first time since the Korean War that
a Guard unit had headquarters command over active component soldiers.
The Air Guard also works side by side with the active component, as F-
16 fighter jets patrol the no-fly zone above Iraq on a daily basis.
In addition to deployments in support of federal missions, the
National Guard also plays an important role in each of the states and
territories. As part of its unique ``dual-mission'' responsibilities,
Guard units routinely respond to protect life and property in state
emergencies such as riots, floods, fires, earthquakes, ice and
snowstorms. Homeland Security is an increasingly prominent element of
the threat to America's national security.
The National Guard has recently taken significant steps to focus on
this important mission as we continue to evolve and remain a ready,
capable and relevant force in responding to our national security
needs. With the help of the Congress, Department of Defense, Joint
Chiefs of Staff, and the Services, the National Guard is building and
identifying the tools, the organization, and the unique training
requirements to help meet this evolving threat. As future capabilities
are identified for Homeland Security requirements, the National Guard
is ready to adapt to the evolving needs of our nation.
The National Guard faces many challenges as we begin this new
century. As President Bush has recognized, ``[a]s threats to America
change, [the National Guard's] role will continue to change.''
Transforming our force structure to meet evolving and emerging threats,
modernizing our equipment, allocating limited resources among numerous
missions, and attracting and retaining qualified people to serve are
formidable challenges. The Army is moving to ``lighter'' forces; the
Air Force has become an ``expeditionary'' force. The National Guard is
adapting, as a total force partner, to support these initiatives. While
we continue to evolve in order to meet the needs of the Services, the
commanders, and our states and territories, the National Guard will
remain relevant and ready to serve our communities, states and nation.

OUR STRATEGIC VISION

National Guard Bureau Vision
To ``provide for the common defense'' * * * of the nation, the
National Guard Bureau provides the leadership and resources required to
set the standard for the world's premier reserve force, the National
Guard of the United States. Our destiny is to respond to current and
future worldwide commitments of the National Security Strategy with
community-based, dedicated citizen-soldiers and airmen; well trained,
organized, and supported with state of the art technology and
equipment.
This vision provides the framework for the premier reserve force in
the world. Providing for the ``common defense'' requires local,
national, and global deployments of military personnel and equipment.
When our national interests are threatened, the involvement of citizen-
soldiers and airmen insures the full commitment of our Nation.
``For a people who are free, and who mean to remain so, a well-
organized and armed militia is their best security.'' Thomas Jefferson,
in his 8th annual message to the Congress, November 8, 1808

CONNECTED WITH AMERICA

National Guard in Our Communities
We are first and foremost an institution of people--soldiers,
airmen, civilians, and families. The National Guard is the military
face of the nation representing a familiar presence in almost every
community in America. Our greatest strength emanates from the diversity
of our force--diversity of education, political affiliations,
vocations, social and economic status, race, color, creed and age. More
Americans connect their vision of the military with the local National
Guard than any other service. Guardsmen and women are our neighbors,
friends, co-workers and relatives. The professionalism, dedication, and
trust of the nation in our military starts with the local Army National
Guard armory and the Air National Guard unit. People from all walks of
life fill the ranks of the National Guard and, as such, provide a
direct connection to over 2,700 local communities across the nation
where Guard facilities are located. We share a common conviction and
purpose built upon a bedrock set of values: integrity, loyalty,
selflessness, compassion, family, dedication, service, and patriotism.

National Guard Serving the States
This community connection brings a unique perspective to the
culture of the National Guard making it the prime choice for emerging
national priorities like Homeland Security and such core missions as
National Missile Defense, countering Weapons of Mass Destruction,
Counterdrug support, and support against cyber-terrorism. Commanded by
the state governor in peacetime, Guardsmen bring critical skills and
resources to bear during state emergencies. Whether fighting forest
fires, protecting our communities from the ravages of floods, or
assisting local and state civil authorities recover from a terrorist
attack, the National Guard is ready and trained to preserve life and
protect property.

National Guard Around the World
Since the organization of its oldest units in 1636 in the
Massachusetts Bay Colony, the National Guard has participated in every
national conflict. The colonial period saw Guard activities largely
confined within the nation's borders while later 19th century conflicts
found the Guard contributing to the nation's defense both at home and
abroad. The first half of the 20th century witnessed the establishment
of the modern Army National Guard, with Guard soldiers participating in
both World Wars. The Guard's evolution continued in the years following
the Second World War with the creation of the Air National Guard. The
Guard fought in Korea, Vietnam, and the Gulf war. During the 1990s, the
Guard's role dramatically increased to a ``Total Force'' partner at
home and throughout the world.

STRATEGIC INTEGRATION

A Corporate Entity Shaping National Security Solutions
To provide cost-effective, well-trained, and relevant military
reserve forces, the National Guard must be a peer participant in the
development of national security strategy. The National Guard Bureau is
uniquely positioned, in this regard, as a Federal organization that
resources and regulates the reserve components (the Army National Guard
and the Air National Guard) of two military departments. To be a
significant force multiplier in this area, the National Guard Bureau is
engaged in the processes that formulate national security strategies as
well as national military strategies.
The National Guard Bureau is represented in the Quadrennial Defense
Review effort. This effort explores possible national security
strategies and their implications on military force structure. Aligning
possible strategies against the perceived risk to the nation and
identifying financial and force structure implications is essential in
building a table of security options for civilian decision makers. By
participating in this process, the National Guard ensures its rich
history, traditions, and core competencies will be incorporated into
all strategy options.

A Joint Entity Coordinating with the Chairman, Joint Chiefs of Staff,
Joint Staff
The National Guard Bureau does not direct the military operations
of the Army National Guard or the Air National Guard. However, under
Section 10501, Title 10, United State Code, the National Guard Bureau
is the channel of communications between the military departments and
the 54 states and territories. To ensure timely, complete coordination,
the National Guard Bureau staff communicates with the Chairman, Joint
Chiefs of Staff, and Joint Staff personnel. Joint training exercises
are coordinated to insure the inclusion of Guard personnel and
equipment and to maximize the training opportunities for National Guard
personnel as full partners in the total force.
The Chief, National Guard Bureau meets periodically with the
Chairman, Joint Chiefs of Staff. Members of the National Guard serve
full-time on the Joint Staff. Substantive policy issues pertaining to
the National Guard are coordinated with the Guard representative to the
Chairman, Joint Chiefs of Staff. National Guard members are working in
a collective manner throughout the Department of Defense to create a
seamless total force.

A Connected Entity Contributing to the Quadrennial Defense Review
The Congress has mandated that we review our defense direction
every four years. The review addresses our assessment of the perceived
threat, strategies to meet the threat, and the ensuing force structure
to implement the strategy. The Department of Defense will use the
congressionally mandated Quadrennial Defense Review for 2001 as a tool
to help determine our national defense priorities. The role of the
National Guard in that review is to be fundamentally supportive of the
parent service components in addressing the review. However, there are
some parts of the threat that are especially relevant to the National
Guard as a state institution.

HOMELAND SECURITY

With respect to Homeland Security, we agree with the April 2000
statement of the U.S. Commission on National Security/21st Century that
``The National Guard--successor to the militia, and acknowledged in the
Second Amendment as the historic defender of the Republic--must be
trained and equipped to assume, among its other responsibilities, a
significant role in defending the homeland in the 21st century.'' The
National Guard looks forward to taking part in defining its role in
securing the homeland. Although not the only mission of the full
spectrum of forces the National Guard provides to our National Security
Strategy, the Guard currently supports Homeland Security through its
National Missile Defense, Countering Weapons of Mass Destruction and
Terrorism, and Counterdrug efforts.
The Army defines Homeland Defense as ``Protecting our territory,
population and infrastructure at home by: Deterring and defending
against foreign and domestic threats. Supporting civil authorities in
crisis and consequence management. Helping to ensure the availability,
integrity, survivability, and adequacy of critical national assets.''
We believe Homeland Security in a National Guard context includes a
response to weapons of mass destruction to include biological and
chemical agents. We believe it is linked to the air defense and air
sovereignty of our nation and protection against the threat of rogue
missiles. We would also add countering drugs as a component of the
threat to our citizen's security. Protecting information operations is
another important facet of this defense.
Homeland Security is a national program that will be executed at
the local level. It requires federal funding and national standards,
but local administration in a peacetime environment. No one has more
experience at interfacing with local and community government agencies
than the National Guard. We have had decades of experience coordinating
with local responders, and working in interagency environments. The
Guard has provided military aid to civil authority on a regular basis,
in natural disasters and emergencies all across our nation. The
National Guard can use its forward-deployed strengths and its core
competencies to best advantage in this mission.
The U.S. Commission on National Security/21st Century report takes
a comprehensive look at this vital mission and identifies many areas
the Guard can play a major role. The National Guard is a trained,
organized, equipped and disciplined force in almost every community in
America. That embedded capability offers a large part of the solution
to national coverage. This mission will require some additional
organization and specialized training and equipment to supplement what
is already at hand. We are already making solid progress in that
direction with our Civil Support Teams. Those teams will be deployable
assets able to respond across state lines.
The Department of Defense, through the Quadrennial Defense Review
of 2001, is working to align its structure, resources and systems to
counter these new threats to our homeland. This process must produce
deterrent strategies and response capabilities for the best interest of
our nation. The National Guard, as a participant in the QDR process, is
working closely with the Department of Defense to create cost-effective
solutions for Homeland Security.
The National Guard Bureau is positioned to offer solutions that
transcend single-service solutions. Quadrennial Defense Review
solutions supported by State Adjutants General as well as multiple
services will provide workable alternatives. Working to this end, the
National Guard remains committed to support and implement full-spectrum
solutions to our national security challenges.
Homeland Security is a work in progress--developing a definition,
written doctrine, and finding ways to resource this national concern.
We know that the Guard will play a significant role. Currently, the
National Guard is already heavily involved in missions that constitute
the heart of Homeland Security.

National Missile Defense
The end of the Cold War brought a relaxation of tensions between
America and the Soviet Union and reduced concerns about nuclear war.
Unfortunately, the spread of ballistic missile technology and weapons
of mass destruction to new parts of the world has accelerated. The
danger posed by this proliferation prompted a shift in objectives for
the Strategic Defense Initiative program in early 1991. Keeping with
this reorientation, the name of the Strategic Defense Initiative Office
was changed to the Ballistic Missile Defense Office in 1993. This
organization's goals now include developing systems to defend the
United States against limited missile attacks and protecting deployed
U.S. forces and American allies against shorter- and mid-range
ballistic missiles. The decision to reorient the U.S. missile defense
program was validated by the Gulf war, which demonstrated the
increasing need for these capabilities.
This year President Bush will determine whether to deploy a limited
National Missile Defense (NMD) against ballistic missile threats to the
United States from states that threaten international peace and
security. The decision will be based on four factors: whether the
threat materializes, the status of technology and the proposed system's
operational effectiveness; the implications for the overall strategic
environment and our arms control objectives; and affordability. The NMD
program is currently structured so that an initial capability for
defending all 50 states against limited ballistic missile attack could
be available in 2005, with expanded capabilities ready in 2006-08.
The National Guard Bureau has established an office cell to support
the National Guard's role as the ``force provider'' for the NMD system.
Two states, Alaska and North Dakota, are under consideration for
possible fielding of a new missile defense warning and interception
facility.

Countering Weapons of Mass Destruction and Terrorism
The unique dual state and federal role of the National Guard sets
it apart from any other military organization to fulfill the special
requirement of supporting Weapons of Mass Destruction (WMD) emergency
responders and consequence management. In this important role, the
National Guard is in the process of validating and fielding 32 full-
time Civil Support Teams (CSTs) as authorized by Congress. States that
do not have these full-time CSTs will have CSTs made up of traditional
Guard personnel. These traditional CSTs will receive training and
provide a partial response capability. The Guard is also planning
additional, relevant training and equipment for other Guard units,
which will be used for the reconnaissance of chemical, biological and
radiological events, and patient decontamination.
The mission of a CST is to: Assess a chemical, biological,
radiological or nuclear event in support of the local incident
commander; Advise civilian responders regarding appropriate actions;
and Facilitate requests for assistance to expedite arrival of
additional state and federal assets to help save lives, prevent human
suffering, and mitigate property damage. These teams will respond as a
part of a state emergency response, deploy outside the state to assist
another state or mobilize in a federal support role.
The National Guard is developing a plan to task organize existing
units within each state to form a Joint State Task Force Headquarters
for Consequence Management. This headquarters will have responsibility
to develop the consequence management annex to a state's emergency
response plan. In addition, it will act as the interagency coordinator
for conducting community readiness exercises to assess the state plan.
The National Guard has also provided Distance Learning Network time for
all emergency responders to receive training. Additional resources must
still be focused to more effectively manage and enhance the national
and state terrorism response assets identified above. The National
Guard will work to assist state and federal agencies in conducting
coordinated training and exercises so that we are prepared to respond
in the event of terrorist activity in our homeland.

National Guard Counterdrug Program
The National Guard is an organization grounded in hometown America,
and each Guardsman and woman knows that our neighborhoods and schools
are also battlefields where the struggle is waged one precious life at
a time. Our members participate and support a number of proven drug
demand reduction programs nationwide that focus on community coalition
building, substance abuse education, youth mentoring, anti-drug message
broadcasting and distribution, leadership development within vulnerable
groups, and the promotion of high standards of citizenship.
In our federal role, we support the Commanders-in-Chief by
detecting and monitoring attempts to smuggle narcotics into the United
States. Members of the National Guard fly fighter aircraft to identify
suspected and known drug smuggling air and sea craft in the Caribbean;
collect and report near-real-time narco-trafficking intelligence;
provide radar support to the U.S. Customs Service Air and Maritime
Interdiction Coordination Center and the Joint SOUTHCOM Surveillance
Reconnaissance Operations Center; and provide mechanical and logistics
support to contracted radar sites in Colombia and Peru.
Within the United States, the National Guard supports various
federal, state and local law enforcement agencies, task forces, and
community-based prevention organizations. Law enforcement agencies
greatly depend on the National Guard for specialized military equipment
and highly trained soldiers and airmen, without which many interdiction
operations would cease. During fiscal year 2000 approximately 3,600
soldiers and airmen with skills in foreign languages, intelligence
analysis, map-making, communications, engineering, diving, marijuana
eradication, transportation, logistics, cargo inspection, and surface
and air reconnaissance were involved in counterdrug operations.
The National Guard has established goals and strategies to guide
our efforts as we provide support to law enforcement agencies. The
first goal is to increase cost effective, guard unique support by
increasing the use of specialized or emerging technology, such as
military aircraft and thermal imaging devices. The second goal of the
National Guard Counterdrug Program is to reduce the drug threat within
our communities by increasing the level of support to High Intensity
Drug Trafficking Areas, state and local task forces, and local
community coalitions. The third goal is to enhance the quality of our
workforce by stabilizing the State Plans Budget to support the 4,000
personnel authorized by Congress, and increase the amount of training
for counterdrug personnel.
As we move into the new millennium, the National Guard will
continue to provide valuable support to various federal, state and
local law enforcement agencies, task forces, and community-based
prevention organizations in hopes that drug use will continue to
decrease.

Preventive Defense
Another federal role of the National Guard is that of Preventive
Defense. We are uniquely positioned to promote democratic practices
abroad and find ourselves in frequent demand for overseas nation-
building programs. Under the auspices of the National Guard's State
Partnership Program, National Guard personnel participate in various
command sponsored engagements. The National Guard participates in
programs such as the North Atlantic Treaty Organization's Partnership
for Peace program, European Command's Joint Contact Team Program,
Southern Command's Traditional CINC Activities Program, and similar
activities sponsored by the Office of the Secretary of Defense, the
Joint Staff and the State Department.
National Guard personnel, and the militia system under which they
operate, are models for the role of a military in a democratic society.
They provide an influential example of how a military force can be
effective while demonstrating military subordination to civil
authorities and illustrate how a military force of the people remains
committed to the people. The wealth of civilian skills our Guard
members take overseas--and the diversity of non-military professions
they represent--are also important, giving our men and women a
versatility and credibility as goodwill ambassadors that no other
American military arm can match.

The State Partnership Program
The purpose of the State Partnership program is to build long-
standing institutional affiliations and people-to-people relationships
with nations currently establishing democratic military organizations.
By using National Guardsmen in their dual roles as citizen-soldiers,
the partner nation's military leaders encounter highly trained and
cost-effective members of the United States Armed Forces. Guardsmen
serve as role models in making a compelling case for the ideals of
democracy, professionalism, and deference to civilian authority. They
also demonstrate the necessity and economy of Reserve Components with
the ability to react immediately to civil and military emergencies.
Much of the Guard's success in promoting democracy abroad is the
result of the State Partnership Program. To date, thirty-two states,
two territories and the District of Columbia have joined as Partners or
Associate Partners in extending the hand of friendship from grassroots
America to thirty-two countries that would emulate our ways and
institutions. Foreign military personnel and political leaders visit
our country to observe how the National Guard operates within the State
and Federal framework. National Guard members reciprocate by visiting
the partner country and providing detailed information on civil-
military topics like search and rescue, medical support, disaster
response, military law, and family programs. Importantly, these are
more than just military-to military contacts. By involving governors,
mayors, and their staffs, state legislators, and the families and
friends of our Guardsmen and women in building these bridges of
friendship, we promote political ``buy-in'' on national security
strategy at the local level. We also foster cooperation between the
federal and state government in other productive ways.
Sharpening the military skills of our Guardsmen and women while
demonstrating their ability and willingness to enhance the quality of
life for hemispheric neighbors is just one benefit of this timely and
innovative engagement. We are firmly committed to sustaining this
effort which has our Guardsmen and women helping to shape emerging
democracies, and preparing for and improving readiness by engaging in
international events and activities, and responding as our national
security needs require.

READINESS AND RELEVANCE

Citizens First: Warriors When Called
Citizen involvement in national defense is critical to the
longevity and health of democratic government. It is a reinforcing
thread in the fabric of democracy itself. How the leadership defines
our national security interest, in the end, is validated through the
support of the people. Our rich heritage of Guardsmen and women
involved in national defense is rapidly taking on new dimensions. As we
transform our organization, we must insure that we recognize, respect,
and protect our citizens' ``commitment to serve.'' Only by preserving
this commitment can we attract the needed personnel to our ranks and
retain them in service throughout a productive career.

Preserving the Commitment to Serve
We entrust a tremendous responsibility in our young men and women
and are committed to ensure that such trust is not taken for granted.
Today's National Guard provides a number of quality of life programs
designed to ensure we recruit, train, deploy and retain the quality
force our country deserves.
The National Guard is struggling with recruitment and retention
issues primarily due to the increasing number of active-duty days
required to support contingency operations around the world. Because
Guard duty is a second job for most of our personnel, the increasing
number of deployments creates unique retention problems with civilian
employers. The National Guard has taken steps to retain our personnel
through Aviation Continuation Pay and special salary rates for
aviators, as well as authorizing special pay and enlistment bonuses for
critical specialties.

Recruitment and Retention
Army National Guard: In fiscal year 2000, the ARNG had success in
enlisted personnel recruiting and retention, accessing over 100 percent
of its goal of 54,034. However, while officer accessions were up 11.8
percent from fiscal year 1999, officer end strength fell 908 officers
short of the goal of 38,308. This shortfall was due to a higher than
expected loss rate among ARNG officers. The ARNG is working vigorously
to identify the reasons for these higher than projected losses by
conducting telephonic and mail surveys with departing officers.
The ARNG initiated an accelerated National Guard Bureau (NGB)
Officer Candidate School (OCS) Program in 1996 that has proven very
successful. This accelerated program cuts 11 months off the traditional
OCS course duration--eight weeks versus 13 months. This is particularly
beneficial to states experiencing large company-grade officer
vacancies. The NGB has been programming about 80 students per year for
the last five years. The class size doubled to 160 students in fiscal
year 2001 due to forecasted training requirements submitted by the
states.
In addition, Cadet Command authorized 800 Guaranteed Reserve Forces
Duty contracts for the Army Reserve Components for fiscal year 2001.
This is the first year that Cadet Command has established a separate
mission for Reserve Component accessions. The ARNG will receive
approximately 500 new accessions from this program.
The ARNG also supports the Army's initiative for Selective
Retention Boards that will allow selected captains and majors to be
retained so that they may reach 20 years of active service. Further,
the ARNG also supports the Army's initiative to select captains for
promotion who do not possess a baccalaureate degree or military
education certification. The actual promotion to the next higher grade
will become effective at such time as the individual provides proof of
civilian or military education requirement completion.
Air National Guard: The ANG met its fiscal year 2000 recruiting
goal by accessing 11,936 new members. Coupled with fewer losses
(10,873), the ANG was able to attain a fiscal year 2000 end strength of
100.1 percent. However, beginning fiscal year 2001 with an increase in
congressionally programmed end strength of over 1,300 personnel
(106,678 to 108,022), the ANG starts fiscal year 2001 at 98.8 percent.
Additionally, the ANG is projecting 11,785 losses for fiscal year 2001,
making their recruiting goal an astonishing 13,620.

Full-Time Support
A major strength of the National Guard and its contributions to
national defense continues to be the National Guard Technician and
Active Guard and Reserve (AGR) programs. The full-time Guard cadre must
be a ready and relevant force that is well trained, organized, and
equipped with state-of-the-art technology. Also, sufficient numbers of
full time personnel must be provided to ensure that the numerous
mission requirements and modernization goals can be met. The uniformed
members of the Guard's full-time force, including Technician and AGR
personnel, continue to be readiness multipliers and an important pillar
of support to national, state and local requirements.
Although progress in full-time support has been made, we face
challenges in a very competitive marketplace. Full-Time Support
personnel are the single most critical readiness enabler, providing
stability and institutional knowledge at every level of command. Full-
Time Support functions include administrative, payroll, supply,
training, maintenance and recruiting support at the unit level. Other
functions include AC/RC integration management, and coordination of
CINC requirements, mobilization and pre and post mobilization training.
Current and future operations depend on a fully integrated force
with the flexibility to respond quickly to meet rapidly changing
operational requirements. Additionally, the current frequency and
number of operational deployments causes the Army and Air Force to rely
to a greater extent on the National Guard to meet its commitments to
the National Military Strategy. Full-Time Support personnel are
critical links to the interoperability of the National Guard and the
active components.

Transforming Our Organization
As we begin the 21st century, the National Guard reflects upon our
service over the last hundred years. America entered this century
without the ability of powered flight and yet, in little more than 60
years, placed a man on the moon. The National Guard has also undergone
dramatic changes over this century. We have transitioned from a force
focused on crisis response at home to a full partnership with the
active components in defending our national security interests around
the world.
Of major concern to the active components is the dramatic increase
in operations tempo and deployments. Many Commanders-in-Chief support
additional funding and equipment for the National Guard so that the
Guard may better assist them in meeting their worldwide operational
requirements. Many believe that increased reliance upon Guard and
Reserve forces to augment, reinforce, and support missions has become
the norm because of personnel reductions in the active components.
Meeting the demands placed on our military in light of available
resources is a challenge for the Department of Defense. Today, more
than ever, the National Guard is a significant part of the solution.
The National Guard is a cost-effective and capable force-multiplier. We
provide over half of the Army's combat assets and about 37 percent of
the Air Force aircraft for less than 5 percent of the national defense
budget. Additionally, over half of Army and Air Force personnel are
retained in the reserve components.
Key to our ability to remain a ready and relevant force is
obtaining adequate resources to continue our transformation. National
Guard priorities include equipment modernization, adequate facilities
and recruiting, training, and retaining quality soldiers. Because of
the increased reliance on upon Guard and Reserve forces, funding these
priorities is essential to ensure America's continued military
superiority.

The Army Transformation
The Army is transforming based on the emerging security challenges
of the 21st century and the need to respond more rapidly across the
full spectrum of operations. As an integral part of the Army, the Army
National Guard (ARNG) will transform as well. One ARNG brigade is
expected to begin transformation prior to fiscal year 2008. In the
current plan, the entire ARNG will transform by fiscal year 2032.
Before transformation is complete, the portion of the ARNG not yet
transformed will form the Legacy Force. The Legacy Force is the
strategic hedge that provides the essential capability to support the
National Command Authority and warfighting Commanders In Chief. The
active Army will cascade the most modern equipment to the ARNG.
Selected legacy formations in both the active and reserve components of
the Army will be recapitalized to enhance key armored and aviation
systems as well as improve light force survivability. The ARNG Combat
Support and Combat Service Support forces will also transform to meet
the changing support requirements of the transformed Army.

Expeditionary Air Forces
Last fall the Air Force implemented the most significant change
since its inception over fifty years ago--the Expeditionary Air Force
(EAF) construct. This change affects the fundamental ways the Air Force
organizes, operates, and even relies on the Air National Guard. Under
this structure Active, Guard, and Reserve flying and support units are
assigned to an AeroSpace Expeditionary Force (AEF). Ten AEFs are
organized with the ANG playing a significant role.
By accepting ten percent of the total AEF tasking, the ANG will
contribute close to 25 percent of its complete force structure every 15
months. The benefits to this new level of involvement and integration
with the Air Force are many. It will bring predictability and stability
to our people who must manage family concerns and civilian employment
responsibilities. This is truly a great ``total force integration''
success but it also brings with it some challenges. We must make this a
positive experience for all our men and women as well as their
families, employers, and communities.
As the Air Force and Department of Defense recently noted in a
report to Congress: ``Simply stated, the Air Force could not perform
its expeditionary mission without the contributions of its Air National
Guard and Air Force Reserve forces. They contribute 71 percent of the
tactical airlift, 67 percent of the strategic tankers, 62 percent of
the strategic airlift, and a significant portion of other Air Force
capabilities critical to its expeditionary capability. In addition to
providing expeditionary support, the Air Force Reserve is the sole
provider of unique capabilities such as aerial spraying and hurricane
tracking, while the Air National Guard provides the nation's airborne
air defense capability. The seamless integration of the Guard and
Reserve into the Total Force is a crucial step toward realizing the
full potential of the EAF.''

Modernizing Our Equipment
To meet the needs of the new century, the Guard must modernize its
equipment. Modern, mission-capable equipment is an essential element to
maintaining readiness. State-of-the-art weapons, aircraft,
communications, and other equipment are necessary for Guard units to
interface and operate seamlessly with their active component
counterparts. Although we have come a long way in the last several
years in upgrading systems, much still remains to be done.

Army National Guard (ARNG)
The goal of the ARNG modernization strategy is to provide for a
compatible and interoperable force. This force will be capable of
fulfilling state, national and international missions in war and peace.
Providing modern equipment with associated training and logistics
support to the ARNG is integral to maintaining the quality force the
nation expects.
The Army Transformation announced by Army Chief of Staff General
Eric K. Shinseki and briefed to Congress in fiscal year 2000 proposed
sweeping changes to aviation force structure. The Transformation will
impact ARNG aviation in every state, not only in personnel and
aircraft, but also in facility construction and qualification training
for aviators and maintainers. Simultaneous with the restructuring, the
Army will accelerate the retirement of legacy aircraft (AH-1, OH-58A/C
and UH-1) resulting in the divestiture of the AH-1s in fiscal year 2001
and the OH-58A/Cs and UH-1s in fiscal year 2004. Implementation of the
retirement plan within these time frames depends upon transferring
older aircraft (AH-64s and UH-60s) from the active Army to the ARNG.
The ARNG has proposed limited retention of AH-1s, OH-58s and UH-1s so
that valuable aviation personnel skills can be retained pending
acquisition of replacement aircraft.
The aging AH-1 and UH-1 fleets have rapidly become an expensive
maintenance burden. Long-term modernization plans called for the AH-1
to be replaced by the AH-64A/D Apache Longbow and the UH-1 to be
replaced by the UH-60L Blackhawk. The retirement of the UH-1 in fiscal
year 2004 may leave the states without sufficient utility aircraft to
execute state contingency missions such as disaster relief responding
to floods and earthquakes, as well as fire fighting.
Significant fire support modernization initiatives included the
M109A6 Paladin, a 155 mm artillery system, the Multiple Launch Rocket
System (MLRS) and the Highly Mobile Artillery Rocket Systems (HIMARS).
By the end of fiscal year 2001, the ARNG will have 18 Paladin
battalions. The ARNG divisional battalions still require Paladin for
modernization. The fielding of the HIMARS to the ARNG is tentatively
scheduled to begin in fiscal year 2005.
The Javelin is the Army's medium weight manportable Infantry anti-
armor weapon system and replaces the Dragon medium anti-tank weapon.
The current budget fields the Javelin Command Launch Unit to all of the
ARNG's eSBs and Special Forces (SF) Groups. Fielding will begin in
fiscal year 2004 and be completed in fiscal year 2006. A second phase
of fielding is planned, but is not yet fully funded.
The ARNG is programmed to receive 1,034 M1078 Light Medium Tactical
Vehicles (LMTVs) to modernize high priority units. The ARNG will
receive the first of 380 LMTVs by the fourth quarter of fiscal year
2001. The next phase will start in fiscal year 2007 and conclude in
fiscal year 2008.
M1 Abrams Modernization: Efforts are currently underway to upgrade
tanks in the eight eSBs from M1A1s to M1A1AHs and in the non-eSB Guard
units from the 105 mm equipped M1 tank to the 120 mm M1A1. This will
provide armor units with greatly increased firepower and survivability
while eliminating ammunition compatibility issues with the rest of the
Army.
Bradley Fighting Vehicle Modernization: Congress appropriated money
in fiscal year 1999 for the procurement of the M2A2ODS Bradley Infantry
Fighting Vehicle (BIFV) for the ARNG. This initiative, along with the
cascade of older Bradleys into ARNG Divisions, will assist the Guard in
moving along in its modernization strategy to ultimately have a pure
fleet of BIFVs.
The ARNG has assumed the corps level air defense artillery role
with the activation of nine Avenger battalions. All nine corps Avenger
battalions are fully fielded with the weapon system. The remaining
eight corps Avenger battalions will be fielded with the Forward Area
Air Defense Command, Control and Intelligence System and Sentinel
radars from fiscal year 2001 through fiscal year 2003.
The continued fielding of Single Channel Ground Airborne Radio
System (SINCGARS) radios is a key component in interoperability with
the Army. The fielding plan window runs from June 2000 through June
2004 for all eSBs, ARNG divisions and remaining units. Currently ten
eSBs are equipped with SINCGARS and the remaining five are scheduled to
receive them by June 2001. In addition, echelons above division, field
artillery brigades and air defense units, which support early deploying
forces, are receiving SINCGARS SIP radios.
The Army Battle Command System (ABCS) is The Army's architecture
for the overall integration of the digital command and control system
found at all echelons from theater level to the weapons platform.
Currently, ARNG units assigned to III Corps will receive the required
ABCS applications by fiscal year 2004. However, to make the ABCS
applications inter-operable and functional, units will require a
digital pipeline, such as the Enhanced Position Location Reporting
System. Funding to support digitization of the eSB and ARNG divisions
does not currently exist.
The Reserve Component Automation System (RCAS) is an automated
information system that provides the Army the capability to administer,
manage, and mobilize Army Guard and Reserve forces more effectively.
The RCAS provides an integrated capability between the ARNG and the
USAR that supports mobilization and improves day-to-day administration
and management of Reserve and Guard forces. Fully deployed, RCAS will
link approximately 10,500 Guard and Reserve units at approximately
4,000 sites located in all 54 states, territories, and the District of
Columbia.
RCAS has already been used to communicate with soldiers in Bosnia
and to respond to disasters such as Midwest floods, Northeast ice
storms, and El Nino storms on the West Coast and hurricanes in the
Southeast. Full functionality is expected in fiscal year 2002.
The National Guard Distributive Training Technology Project (DTTP)
represents the future of training and education in the Army National
Guard. This award winning program converts space into high tech
classrooms linked via state of the art telecommunications to a
centralized training and teleconference facility, resulting in a fully
interactive classroom where both military and civilian studies can be
conducted. The project spans 15 time zones and impacts over 3,000
communities.
Collaboration between organizations, e.g., federal, state, public,
private, is ongoing to establish partnerships focused on fully
implementing the program's potential for extending educational venues
into communities across the country. Under this ``shared use''
approach, classroom facilities are made available to non-military
organizations on a direct cost reimbursement basis. The synergistic
effect of this approach is the expansion of access to automated
information and communications capabilities across the nation, while at
the same time helping to defray the cost of operating the system. The
eventual impact on improved mobilization readiness and community access
is expected to be substantial.

Air National Guard (ANG)
A critical investment in readiness is required to achieve full
Expeditionary Air Force core combat capability.
Precision Strike: Precision Attack Targeting System (PATS), Global
Positioning System (GPS), High Speed Anti-Radiation Missile (HARM)
Targeting System (HTS) 24-hour Operations: Night Vision Goggles (NVG)
and Night Vision Imaging System (NVIS).
Survival in a Complex Threat Environment: Countermeasure Management
System (CMS), Towed Radio Frequency (RF) Decoys, and Pylon Integrated
Dispensing System (PIDS) Universal.
Information Dominance: Situation Awareness Data Link (SADL),
Fighter Data Link (FDL), Theater Airborne Reconnaissance System (TARS),
and Improved Data Modem (IDM).
These ANG core combat capabilities integrate directly into the Air
Force's core competencies for providing Aerospace Superiority, Global
Attack, Rapid Global Mobility, Precision Engagement, Information
Superiority, and Agile Combat Support. Together, they provide the most
rapid and effective way to achieve national objectives while also
reducing risk to the men and women serving our nation.
In addition to acquiring new, state of the art systems like the F-
22, C-17, and C-130J model aircraft, modernization requirements also
require us to focus on collateral supporting programs and equipment.
These programs include: the Combat Upgrade Plan Integration Details
(CUPID) program adding GPS, CMS, NVIS and SADL to our F-16, Block 25/30
aircraft; upgrading our KC-135E fleet through the Pacer Compass, Radar
and Global Positioning System (CRAG) program and the re-engining
program; service life extension modifications for the remaining C-141Cs
to sustain their flying until the C-17 transition is complete; and the
C-130X program to bring all C-130E, H1, H2 and H3 variants to the same
basic aircraft avionics and systems configuration to increase their
reliability, maintainability, supportability, and performance.
We face a future of changing training requirements driven by a
growing reliance on precision-guided, stand-off weapons and night
operations for all airspace users. Further, we will be training in the
evolving environment of a re-designed National Airspace System. We must
ensure access to the training space we need, and provide our crews with
realistic training--in a more complex aviation environment.
The Air National Guard seeks to ensure that its attack assets will
have the latest and best in precision attack capability and battlefield
information equipment. Our objectives are to ensure all ANG aircraft
have the latest, best, defensive and all weather equipment.
Modernization of all our aircraft, C-130s, KC-135s, C-5s, F-16s, F-15s,
A/OA-10s, HH-60s and others, requires adequate and timely funding for
replacement parts, enhancements, and ``mid-life'' upgrades for our
weapon systems. Equipment modernization is essential for a relevant Air
National Guard.

Military Construction
Investment in military construction and real property maintenance
will also enhance our readiness capabilities. The National Guard
currently operates and maintains approximately 3,200 facilities in more
than 2,700 communities. The Guard has facilities in all 50 States; the
District of Columbia; and in the three territories of Guam, Puerto
Rico, and the Virgin Islands. Quality of life, and more important to
reserve component members, quality of service is directly impacted by
the facilities in which they serve.
Their replacement value exceeded $30 billion in fiscal year 2000.
The number of facilities has increased in recent years because of new
missions and the Base Realignment and Closure process. While the
inventory has grown, military construction funding has not kept pace
with estimated requirements. More than half of the facilities need
replacement or extensive renovation because of their age or condition.
The ARNG and ANG submit construction requirements separate from the
Army and Air Force and compete directly with the active duty forces for
military construction dollars. In the end, the ARNG and ANG receive
only a fraction of the total military construction program in the
President's Budget. Traditionally, Congress has inserted military
construction projects into the budget process. However, even with the
congressional add-ons, the National Guard has traditionally been able
to fund less than half of its validated requirements.
Military construction for the Guard is much more than just putting
up new structures. The facilities that house the Guard represent to us
what a post or base represents for our active counterparts. It is the
headquarters, the aircraft hangars, the motor pool, the mobilization
station, the classroom, the family support group gathering place and is
a significant quality of life issue for our people. The poor condition
of National Guard facilities affects training, recruiting and
retention. Our goal will be to communicate this message to our elected
and appointed leaders so that they too can develop an appreciation for
this vital issue.
Fiscal year 2000 and fiscal year 2001 saw a number of much needed
Army National Guard military construction (MILCON) projects initiated
throughout the nation. However, much still needs to be done.
In fiscal year 2001 the ARNG completes the Real Property
Development Plan (RPDP) Initiative as part of a rigorous and
disciplined process using Army standards to establish priorities for
MILCON requirements. This planning tool provides states with a
decision-making guide for long range acquisition, utilization and
development of real property. In addition, the ARNG plans to complete
incorporating our facility needs into the Standard Army Systems by the
end of 2002 to provide the Department of the Army a more accurate view
of what type and how many facilities the ARNG needs to successfully
complete its missions.
The Air National Guard had record setting years for MILCON in
fiscal year 1999 and fiscal year 2000 with nearly $450 million in
projects to address environmental concerns, beddown new missions,
replace outdated and inefficient facilities and restore failing
infrastructure. Strong Congressional support of ANG requirements made
this possible.
This support will be desperately needed in the future as we
continue to struggle with a constrained Air Force program. Both real
property maintenance (RPM) and MILCON have been cut to make room for
other high priority modernization initiatives. The relatively small
amounts set aside for MILCON for the ANG will be dedicated to beddown
of our new missions (C-17, C-130J, KC-135). If past trends continue,
backlogs in current mission requirements, both RPM and MILCON, will
continue to grow beyond the $1 billion mark.

Employer Support of the Guard and Reserve (ESGR)
The National Guard has dedicated this year as the Year of the
Employer. We have long recognized that without the dedicated patriots
who employ our Guardsmen and women, our militia could not perform at
the magnificent level we see today. Our soldiers and airmen sacrifice
when they answer the call to duty, and in a parallel manner, so do the
employers of these soldiers and airmen.
To foster employer-Guard partnerships, the National Committee for
Employer Support of the Guard and Reserve (NCESGR) was chartered by
presidential proclamation in 1972 under the Office of the Secretary of
Defense. It is the sole agency within Department of Defense directed to
``promote public and private understanding of the National Guard and
Reserve in order to gain employer and community support to ensure the
availability and readiness of National Guard and Reserve forces.''
NCESGR has 54 state-level employer support committees, comprised of
over 4,200 volunteer members and is supported by a small joint service
staff in Washington. The volunteers implement a variety of programs and
services for both reserve component members and their employers. They
provide information on employment rights and responsibilities related
to the performance of military duty; offer informal employment conflict
mediation; and conduct employer recognition and public affairs events
that promote understanding of the vital role of the reserve components.

National Guard Family Programs
Support of National Guard families is a critical component of
readiness and retention. The National Guard Family Program provides an
extensive infrastructure with a national network linking over 2,700
communities within the 54 states and territories. This network includes
54 full-time State Family Program Coordinators who work with military
points of contact and volunteers at every organizational level. This
team promotes family member volunteerism, family readiness groups and
networks, and quality of life issues, and facilitates family readiness
training throughout the National Guard.
During periods of increased Guard activity, such as deployments and
state emergencies, Family Assistance Centers are set up to support the
immediate and post deployment needs of families. Family Program
services include basic family readiness training and counseling in
preparation for the deployment of military family members; information,
referral, and follow-up; community involvement; emergency assistance;
crisis intervention; reunion preparation and activities; and youth
outreach programs for children of Guard personnel. A key National Guard
quality of life goal is to provide assistance to all military families,
regardless of branch or component, who find themselves beyond the
support capability of active duty military facilities or their home
units.

Youth Programs
Consonant with its role in local communities and state mission, the
National Guard operates two youth programs, ChalleNGe and Starbase.
These programs make use of the National Guard's strengths in
organization, planning, execution, self-discipline and leadership and
leverages its existing infrastructure in the states, so that there is
great value added with a minimum of additional resources.
ChalleNGe is a program for youth between 16 and 18 years of age who
are not in trouble with the law and are drug free, unemployed, and have
dropped out of high school. The program consists of a five-month
residential phase and a one-year post-residential mentoring phase. Its
goal is to significantly improve the life skills and employment
potential of these youth through military-based training.
Starbase is a nonresidential program for students in grades K-12,
which targets ``at risk'' students, and provides instruction
specifically designed to meet a state's math and science objectives.
The program provides the students with real-world applications of math
and science through experiential learning, simulations, and experiments
in aviation and space related fields.

ON GUARD FOR THE 21ST CENTURY

During the past 365 years, the National Guard has built a
distinguished record of service, and will continue to provide the
primary first line ready reserve force for our national defense. The
National Guard is a reliable insurance policy for national defense that
pays daily dividends in our communities and states. It provides the
social connective tissue between hometown America and our national
security strategy, bonding the support of our citizens to our
leadership objectives. The Guard has flexibly adapted to centuries of
growth, challenge, and change--transforming to meet the challenge of
the time.
As we move into the 21st Century, Americans enjoy relative peace at
home and one of the longest economic expansions in our nation's
history. Truly, these are blessed times for the majority of Americans.
But we must maintain our vigilance, and we must maintain the necessary
level of readiness to counter threats to our nation.
As time passes, be assured the National Guard will continue to be
engaged globally as full partners with the Army and the Air Force in
discharging missions under the National Security Strategy. We will
continue to pursue innovations in strategy, training and technology. We
will continue to adapt to meet the national security requirements of
the time in order to remain the world's premier reserve force.
The National Guard is connected to the American people through
3,200 training centers in 2,700 communities throughout 54 states and
territories. To have a strong common defense, all Americans must feel
connected to the armed forces. The National Guard is that mechanism
which involves local citizens in meaningful community service and
allows them to serve their nation while remaining in their communities.
The National Guard is unique in the world. No other military
organization has a constitutionally based dual responsibility to state
and nation. No other military organization is community based,
providing combat ready, mission-capable forces throughout the entire
spectrum of conflict. The National Guard is deployed around the world,
throughout our states and within our communities.

Senator Stevens. General Schultz.
STATEMENT OF MAJOR GENERAL ROGER C. SCHULTZ, DIRECTOR,
ARMY NATIONAL GUARD, DEPARTMENT OF THE ARMY
General Schultz. Thank you, Mr. Chairman, and distinguished
committee members. On behalf of 350,000 soldiers today, I
extend my appreciation to you for what you have done for us by
focusing on our priorities in the past.
I am here today to tell you it has made a difference, and
it continues. As we talk today, we have 14,900 soldiers from
the Army Guard deployed from their homes. Two thousand, one
hundred are deployed in the Balkans and in Southwest Asia. The
rest are on training missions and operational kinds of
exercises. My message is this, as we talk about increased
deployment, meaning a person away from their place of work or
their home, we applied more pressure on our full-time staff.
We have worked with your committee in the past. I am here
today to continue to ask for your support of full-time manning
as we talk about a changing role in the schedule, really the
activity, that we apply across the Guard today. We responded
last year, for example, to 512 missions in support of the Army.
We were in 64 countries last year. We have been in 57 countries
already this year.
So my request today, Mr. Chairman, is twofold: One, assist
us with our full-time manning requirements. That is, the
personnel looking after the readiness of that unit. The second,
modernization of our equipment. As we rely on Guard units to
respond more and more every day, deploying with our active
units, we need things like radios that talk to one another, and
equipment that is compatible across the systems that are
delivered in our unit inventory.
Mr. Chairman, thank you.
[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL ROGER C. SCHULTZ

Mr. Chairman, distinguished members of this committee, thank you
for the opportunity to testify on behalf of the more than 351,000 men
and women serving in the Army National Guard. Your Army National Guard
today is fully engaged around the world as an integral part of the
Army, as well as responding to the call to protect life and property in
state emergencies.
Recent events have demonstrated, now more than ever, the crucial
role the Army National Guard plays when called upon by our nation
during times of need. We were there to help friends and neighbors
weather floods, fires, ice and snowstorms. We were also there when our
nation asked us to help keep peace in a war weary region. When called,
the Army National Guard has proven it can be relied upon.
Fiscal year 2000 brought many opportunities to our organization. We
saw the 49th Armored Division Headquarters of the Texas Army National
Guard deploy and command a multi-national force in Bosnia. We look
forward to the 29th Infantry Division of the Virginia Army National
Guard assuming this responsibility in October of this year. Currently,
the 48th Infantry Brigade of Georgia Army National Guard is providing
security forces for stabilization operations. As I sit before you
today, we have more soldiers deployed on Presidential call up orders
than at anytime since the Persian Gulf War. At home in fiscal year
2000, ARNG soldiers spent a total of 212,896 man-days in support of
state missions. As of May 1st of this year, the number of man-days is
45,127.
The reasons for our success are clear--the people of our Guard
family. The Army National Guard is a team of people from every state,
territory, and the District of Columbia. These soldiers have personal
lives to lead, families to support, and careers to pursue in the
civilian sector. In addition, we not only ask our service members to be
available for regularly scheduled duty, but also to support an
increased operational tempo. Soldiers are our most precious resource.
They need our assistance to balance their personal, professional, and
military lives.
The Army National Guard surpassed its recruiting goals in fiscal
year 2000 in spite of difficult recruiting challenges brought about by
a robust economy and we are on track to surpass our goals for fiscal
year 2001. When soldiers join the Guard, they know their talents and
abilities are going to be fully utilized, they know they are going to
work and work hard. We owe it to them to fight for the highest quality
training, state of the art equipment, sufficient numbers of dedicated
full-time support staff and appropriate resources for support of the
missions we assign them.
The Army National Guard plays an increasingly significant role in
the National Military Strategy, now aligned even more closely with
Active Component forces. Fulfilling our obligation to this strategy and
ensuring we are ready when called upon is paramount. This close
relationship with active forces makes concerns about our aging
equipment even more worrisome. The Guard must modernize at rate
commensurate with the active force. As the active Army transforms, so
too must the Guard. The increased reliance on the Army National Guard
and its soldiers places an even higher priority on the inter-
operability of our equipment.
At this time I would like to submit our annual Posture Statement to
the committee in support of my testimony here today. This Posture
Statement will provide you with an update on what the Army National
Guard has been doing, the progress we are making and how we will help
meet the needs of the country as defined in the National Military
Strategy. Some of the major issues addressed are equipment
modernization, operational tempo, readiness, full-time manning, and
transformation. Additionally, we outline the many challenges we face as
an organization. We particularly focus on our ability to balance
requirements placed upon us by our states and nation and still maintain
the support of our families and employers versus our ability to sustain
acceptable readiness. The strides made by the Army National Guard are
evidenced by the performance of our units. Our foundation is first-rate
individual soldiers, molded into teams. These soldiers and teams are
what make the Army National Guard a very special organization indeed.
Of course, the bottom line for us will remain the readiness of our
soldiers and our units. Mr. Chairman, again I would like to thank you
for the opportunity to appear before you today and thank you for the
support this committee provides. I look forward to answering any
questions you might have.
______

Army National Guard Fiscal Year 2002 Posture Statement
forward

The 2002 Army National Guard (ARNG) Posture Statement highlights
our activities of the past year, and the Army Guard's programs and
challenges to meet the needs of our nation in the coming year and
beyond.
The ARNG vision is: ``A force missioned across the spectrum of
contingencies, structured and resourced to accomplish its mission,
capable and accessible when called, with trained citizen-soldiers
committed to preserving the timeless traditions and values of service
to our nation and communities.'' With a unique federal and state
mission, the Army National Guard is poised to respond when our nation
or communities call. As a forward thinking organization, the ARNG is
mindful of the needs of our fellow citizens whom we serve.
Unprecedented Involvement
The Fiscal Year 2002 Posture Statement tells of unprecedented
involvement of the ARNG in both federal missions and in civil support
matters. The 49th Armored Division's (Texas ARNG) assumption of multi-
national ground forces command responsibilities in Bosnia highlighted
an eventful year that saw record numbers of Guard soldiers deployed
worldwide in support of the federal mission. In addition, six more ARNG
division headquarters were alerted for future Bosnia missions.
Continued pursuit of new mission requirements to serve in the areas of
Weapons of Mass Destruction and Information Operations ensures that the
capabilities of the ARNG will advance with the needs of the nation. A
challenging year with Y2K concerns, wild fires, winter storms and other
natural disasters provided many opportunities to demonstrate the value
of the ARNG at home.
Looking to the future, it is imperative that the ARNG continues to
work closely with The Army to balance manning, modernization,
missioning and resourcing issues. The relationship with The Army
continues to develop and prosper, and it is essential to continue this
to ensure ARNG plans and programs are firmly rooted in protecting the
present and preparing for the future.
Significant Challenges
Significant challenges for the future are as follows:
Manning.--Our most critical issue is full-time manning. In order to
remain a trained and ready force, ARNG units must have sufficient full-
time support personnel. The Army Guard's current full-time manning
level of 57 percent of validated requirements is the lowest of all the
reserve components. With the Guard's increased role in worldwide day-
to-day operations, it is extremely important to have sufficient full-
time soldiers ready to help their units meet current readiness
operational tempo needs. Maintaining and sustaining personnel readiness
in our units is a high priority. Continued support to recruiting and
retention is paramount. The ARNG continues to achieve its endstrength
mission.
Missioning.--This past year The Chief of Staff of the Army (CSA)
announced his intent to mission ARNG divisions and create affiliations
with Active Army forces. The Army also supported a change to the Joint
Strategic Capabilities Plan, recommending the single apportionment of
all 15 enhanced Separate Brigades and the apportionment of six ARNG
divisions to a combatant command. The CSA further aligned all ARNG
combat maneuver forces to one of the four Army corps, enhancing mission
focus. This initiative enhances the understanding that we must remain
on the same technological level with active forces to ensure full
interoperability and integration.
Modernization.--The Army National Guard is committed to the Chief
of Staff's vision of transforming The Army to better meet the demands
of the 21st century. Our challenge during this period of Transformation
will be to ensure that ARNG units are equipped and sustained at levels
that provide them with the capability to execute their missions. Under
the current Army plan, the ARNG will complete its Transformation in the
year 2030. It is therefore essential that we remain vigilant in
addressing critical current force modernization shortfalls in aviation,
armored fighting vehicles, artillery platforms and support systems. To
execute full spectrum operations in support of the National Military
Strategy, Joint Strategic Capabilities Plan and the unified combatant
commands, The Army must establish interoperability across the entire
force. It is therefore essential that the ARNG acquire the requisite
digital equipment capabilities needed to maintain command, control and
situational awareness throughout the force.

Resourcing and Civil Support
Resourcing.--The Army National Guard is fully engaged with the
Department of the Army to ensure critical resourcing needs are met.
Although much progress has been made in achieving satisfactory funding
levels in the past, certain critical shortfalls remain. Proper
resourcing is essential to meeting readiness targets and particularly
critical for full-time manning, recruiting and retention, schools and
special training, and automation.
Civil Support.--At the request of a state's governor the Guard is
poised to respond to emergencies. We aid state agencies and our
communities in minimizing the effects of floods, fires, hurricanes and
other natural disasters. We must stay prepared to aid communities when
there is a threat of civil disturbances. It is also necessary for the
Guard to be ready to help civil authorities mitigate the effects of
weapons of mass destruction.

Infrastructure
Infrastructure.--The ARNG maintains 3,174 training facilities. To
many communities, these are more than just military buildings. They are
meeting places as well as places for community members to come together
and share common interests. These structures must be maintained and
have full-time manning in the units to keep them open. The ARNG is also
one of the greatest stewards for preservation of public lands. Our
training areas across the nation are an important part of area eco-
systems and contribute to local economic development.
As you read this posture statement, keep in mind the ARNG's unique
dual mission. A mission built upon the foundation of full-time manning,
missioning, resourcing, infrastructure, modernization and civil
support. Since 1636, we have proudly served the defense of our nation.
Today and in the future, we continue to assist our communities, and
stand ready to defend our nation. With your continued support, we will
meet and exceed our nation's expectations.

THE GUARD TODAY

The Army National Guard in Stability and Support for Contingency
Operations
Fiscal year 2000 saw an increase in Army National Guard (ARNG)
support for contingency operations in the Balkans and Southwest Asia.
During the course of the year, 2,932 ARNG soldiers supported efforts
under the auspices of OPERATION JOINT FORGE (Bosnia), OPERATION JOINT
GUARDIAN (Kosovo) and OPERATION DESERT SPRING (Kuwait/Saudi Arabia).
Operations in fiscal year 2001 are dramatically illustrating the
increasing role of the ARNG in supporting theater Commanders In Chief
(CINCs) in stability and support operations. To date, the ARNG has
provided approximately 5,400 soldiers in fiscal year 2001, which is an
increase of 2,500 soldiers from fiscal year 2000.
During fiscal year 2000, the ARNG deployed more than 22,000
soldiers under the Overseas Deployment for Training (ODT) program in
support of CINCs.

Military Support to Civil Authorities
In addition to ARNG deployments in support of federal missions, the
ARNG fulfills an extensive and highly visible domestic role. As part of
its unique ``dual-mission'' responsibilities, the ARNG routinely
responds to domestic requirements within each state. Local governments
in 50 states, three territories and the District of Columbia requested
emergency support through their state governments 288 times in fiscal
year 2000.
The ARNG provided 200,590 soldier man-days in response to these
requirements in an effort to lessen suffering and meet crucial support
needs in local communities. Services provided by the ARNG in support of
state requirements included establishing security, providing electrical
power, heat, water, transportation services, food and shelter. The ARNG
provided emergency engineering support to victims of numerous natural
disasters, including floods, hurricanes, droughts, ice storms,
tornadoes and search and rescue.

U.S. Joint Forces Command Exercises
Beginning in fiscal year 2001, nearly 850 service members are
scheduled to participate in Joint Forces Command exercises such as
Joint Task Force Exercises (JTFEX) Unified Endeavor and Northern Viking
Iceland. This will mark the first time ARNG troops have participated in
a major role in Category 2 (multi-service) and 3 (joint force) type
exercises. This participation improves the ARNG soldiering skills in
joint interoperability and positions our units for higher levels of
readiness.

National Guard State Partnership Program
Embedded within the support to U.S. European Command (EUCOM), U.S.
Central Command (CENTCOM), U.S. Southern Command (SOUTHCOM) and U.S.
Pacific Command (PACOM) were activities conducted under the State
Partnership Program initiative. This National Guard program grew from
the Partnership for Peace initiative to assist nations emerging from
the Soviet Union in establishing a defense infrastructure. Today 32
states, two territories and the District of Columbia are partnered with
32 countries around the world.
Through its cooperative efforts with other nations, the Guard plays
an important role in shaping the international environment in support
of the national security strategy. The National Guard's international
initiatives directly support United States national security and
national military strategies by fostering democracy, encouraging free
market economies and promoting regional cooperation and stability.
The state partners actively participate in a host of engagement
activities, including bilateral training and familiarization events,
fellowship-style internships and civic leader visits. These deployments
provide valuable training for the ARNG, reduce Active Component
Operational Tempo (OPTEMPO) and assist the Unified Commands in shaping
the security environment.

PREPARING FOR THE FUTURE

Current world globalization trends, which include rapid and
unrestricted flow of information, present an uncertain security
environment for the future. We must provide our soldiers with the
resources they need to remain trained and ready. The Army National
Guard (ARNG) must anticipate the requirements of today's world while we
plan for tomorrow's challenges.
The ARNG will have a primary role in supporting emerging civil
support missions, including such diverse tasks as managing the
consequences of Weapons of Mass Destruction, National Missile Defense
System and threats to our nation.
Organizational Goals
To focus our efforts, we have defined 11 key organizational goals
that are critical to our support of the nation's defense. These are:
Manning.--Develop and execute an Army-wide integrated human
resource system to acquire, distribute, manage, compensate, retain and
transition people, enabling the ARNG to provide combat ready units.
Organizing.--Provide the maximum possible number of missioned ARNG
units based on the Total Army Analysis (TAA) process, with required
support as part of The Army's total force structure required to achieve
directed capabilities.
Equipping.--Obtain and distribute mission capable equipment to
optimize ARNG unit readiness, modernization and force relevance.
Readiness.--Ensure all ARNG units are resourced to attain and
sustain readiness levels needed to meet Commander in Chief (CINC)
mission requirements and deployment timelines.
Sustaining.--Provide appropriate and efficient support for
personnel, equipment and operations to accomplish all ARNG missions.
Training.--Produce ready units to meet the National Military
Strategy. This requires the development of strategies and the planning,
acquisition, distribution and execution of resources to train
individual, leader and collective tasks in the live, virtual and
constructive environments.
Quality Installations.--Provide state-of-the-art, environmentally
sound, community-based power projection platforms that integrate all
functions required to sustain and enhance unit readiness and community
support.
Missioning.--Ensure 100 percent of all ARNG force structure
federally missioned--all Modified Table of Organization and Equipment
(MTOE) units and Table of Distribution and Allowances (TDA) structure
included within Time Phase Force Deployment Data (TPFDD) or supporting
the Commander in Chief (CINC) war plans.
Quality of Life.--Provide an environment and culture that promotes
equal opportunity for all, fosters environmental stewardship and
provides for the safety, health and fitness of the force, families and
communities.
Knowledge Infrastructure.--Develop the infrastructure necessary to
capture and create information and knowledge, store it in an organized
manner, improve it, clarify it and make it accessible in a usable
format to anyone who needs it.
Resourcing.--Secure resources for all statutory and critical
requirements. Achieve parity within each force package across all
components to provide trained and deployable forces for The Army and
CINCs.

Army National Guard Vision 2010
No successful plan to shape our future military forces can be
completed without a thorough understanding of the global environment.
The Army National Guard Vision 2010 provides the foundation for
determining our future roles and missions in support of our nation's
security strategy. The Army National Guard Posture Statement documents
the link between Army Vision 2010, The Army Transformation Campaign
Plan and the Joint Staff Joint Vision 2020. These integrated planning
documents provide the ARNG direction for meeting its goals, objectives,
missions and responsibilities in the new millennium.
In fulfilling its role as a part of this integrated road map to the
future, Army National Guard Vision 2010 notes that the development of a
full spectrum land force will be a major factor in meeting our long-
term readiness objectives. The Army's Transformation Strategy and the
missioning of our combat divisions support these objectives. To
continue on our current path of success in Active Component/Reserve
Component (AC/RC) integration, the ARNG will participate in The Army's
Transformation and form an Interim Brigade Combat Team (IBCT) prior to
2008.
Our existing and transformed forces must possess an unprecedented
degree of operational and strategic flexibility, allowing ARNG soldiers
to fulfill a wide variety of mission requirements. With capabilities
ranging from sustained, high intensity combat to the conduct of
disaster relief and assistance operations, this full spectrum land
force will draw on traditional ARNG strengths as well as a variety of
new capabilities in meeting the nation's military and civil needs.
Recognizing the need for both traditional and non-traditional
capabilities in the years ahead, Army National Guard Vision 2010 notes
that the ARNG's heritage as a community-based force will play a crucial
role in meeting these challenges. From 2,679 communities in all 50
states, three territories and the District of Columbia, the ARNG's
350,000 personnel are well positioned to meet both existing and
emerging state and federal mission requirements. These diverse
capabilities ranging from Combat to Combat Service Support (CSS)
combine with the Guard's community orientation to provide unparalleled
capability and responsiveness both at home and abroad. The attributes
of the ARNG, coupled with rapidly emerging capabilities, will make the
Army National Guard Vision 2010 a reality.

The Future is People
The well-being of our soldiers, families, and employers is vital in
meeting future challenges. Although we recruit soldiers, we recognize
the significant contributions made by their families and employers.
This transcends our traditional view of part-time citizen soldiers. Men
and women of the ARNG, supported by their families, are the bedrock
upon which the organization is founded. Continuing nationwide support
from ARNG employers also plays a significant role in the readiness and
availability of our soldiers for any mission. Without this employer
support, our readiness is adversely affected at every level. Working
together, ARNG members, families and employers create the basis for
what counts most--our readiness.

Army Personnel Transformation Plan
Lessons learned from Desert Shield/Desert Storm demonstrate that
The Army must provide more timely information to commanders to support
their soldiers during times of war. We must change our business
processes to support soldiers no matter where they serve.
With the increased participation of reserve components during war
as well as peacekeeping missions, our systems of providing information
must be more uniform, accurate and timely. The vision for personnel
transformation is to create a system that is simple, accurate and
accessible. This system will give commanders, regardless of component,
the ability to manage and support all of their soldiers' needs.
The concept of personnel and human resource support calls for a
plan that closely matches The Army Transformation Plan. Key to
achieving the vision of Army human resource support is a single,
integrated (multi-component) human resource database, referred to as
the Integrated Total Army Personnel Database (ITAPDB). Also important
to the success of this concept is the redesign of more than 1,170
personnel tasks and functions required to support soldiers, commanders
and family members.
A structured plan that contains the personnel manpower requirements
must be developed insuring that soldiers, civilians and contractors are
trained to work as personnel experts in the more complex future.
The personnel support concept of the future lessens the burden of
personnel service support organizations and manpower on strategic lift
and sustainment requirements, as well as demands on Army manpower. The
new design and concept of support will not only simplify the current
complex delivery systems of support and improve access to information
for commanders and soldiers, but will also offer improvements in the
overall quality of human resource support to soldiers and family
members.

The Army QDR Strategy
The ARNG is a full partner in the Quadrennial Defense Review (QDR)
process with the United States Army Reserve (USAR) and the Active
Component. The Army's approach is to conduct a strategy-based review to
achieve low to moderate risk in accordance with the congressional
mandate. The process will first assess The Army's capabilities as part
of a joint force in meeting the current National Military Strategy
(NMS), then look at possible alternative strategies and their
implication for required capabilities.
We are also looking at a range of possible alternatives identified
in the process to determine the requirements for the ARNG in its unique
role as the nation's dual missioned force. We are working closely with
The Army to ensure the ARNG's capabilities are identified and
recognized by the Office of the Secretary of Defense (OSD), the Joint
Staff, combatant commanders and other services through the QDR process.
A successful outcome of the QDR process for the ARNG will include
the following:
--A formal recognition of past and future contributions and continued
relevance to the full spectrum of operations in executing our
NMS.
--All of our force structure fully missioned and resourced to execute
the NMS.
--The end strength of the ARNG adjusted to our force structure
allowance to allow the attainment and sustainment of the
readiness requirements of the CINCs.
--A force structure rules of allocation policy be developed among the
components of The Army optimizing the stewardship of limited
resources available with the least amount of risk in meeting
the CINC's requirements.
--A Reserve Component (RC) rotation duration and frequency policy be
developed that provides the least amount of impact to employers
and families yet provides CINC required capability and relief
to the AC deployment tempo.
--The Army's missions and role in Civil Support be defined.

MISSIONING THE GUARD

The missioning goal of the Army National Guard (ARNG) is to have
all ARNG force structure federally missioned--Modified Table of
Organization and Equipment (MTOE) units and Table of Distribution and
Allowances (TDA) structure included within Time Phase Force Deployment
Data (TPFDD) or supporting the Commander in Chief (CINC) war plans.
As our organization enters the new century, the ARNG, both at home
and abroad, finds itself doing more than it has at any time previously
in its peacetime history. We provide Partnership for Peace activities
in Eastern Europe and humanitarian relief efforts in Central America.
We provide units for peacekeeping missions in Bosnia and Kosovo as well
as force protection in Southwest Asia. The ARNG is fully engaged in
meeting its federal as well as state and local obligations.

U.S. Southern Command (SOUTHCOM)
The ARNG provided extensive support to Active Component (AC) forces
in U.S. Southern Command (SOUTHCOM) through the Overseas Deployment for
Training (ODT) program. ARNG soldiers performed a variety of important
missions as SOUTHCOM and U.S. Army South established operations in
Miami and Puerto Rico. During fiscal year 2000 the ARNG deployed more
than 4,500 soldiers to support SOUTHCOM's regional engagement strategy
through Medical Readiness Training Exercises (MEDRETE), unit exchanges
and joint-combined exercises such as NUEVOS HORIZONTES, TRADEWINDS and
FUERZAS ALIADAS.

U.S. European Command (EUCOM)
The ARNG mobilized and deployed 1,395 soldiers to support the
Commander in Chief, U.S. European Command (CINC EUCOM) for Operation
Joint Forge (OJF) in Bosnia during fiscal year 2000. Units deployed in
support of this effort included medical, public affairs, aviation,
military police and transportation. To date, approximately 6,837
soldiers from more than 253 units, from 50 states, three territories
and the District of Columbia have mobilized for active duty in support
of Operation Joint ENDEAVOR/GUARD/FORGE.
The 49th Armored Division (AD), Texas ARNG, provided a division
Headquarters and Headquarters Company (HHC) for Task Force Eagle
(Bosnia) from March to October 2000. Fiscal year 2000 also saw the
first mobilization of elements from two enhanced Separate Brigades
(eSBs) as part of the maneuver force in Bosnia. Two companies (one
armor/one mechanized) from the 30th eSB supported the Heavy Task Force
while two light infantry companies from the 45th eSB supported the
Light Task Force. Follow-on Division HHCs that have been notified for
rotation to Bosnia are, in sequence: 29th Infantry Division (ID), 28th
ID, 35th ID, 34th ID, 38th ID and 42nd ID.
The ARNG has provided 27 units for a total of 605 soldiers from 20
different states in support of Operation Joint Guardian (OJG) to date.
These soldiers provided medical, legal, religious and security support
for base camp operations at Camp Able Sentry in Skopje, Macedonia.
Fiscal year 2001/02 will see expanded usage of ARNG units.
Mobilizations in fiscal year 2001/02 include a Mobile Public Affairs
Detachment, Target Acquisition Battery, Rear Area Operations Center,
Military Intelligence Force Protections Teams, Medical Company (Air
Ambulance) and a Combat Engineer Asphalt Platoon.
Support to EUCOM has steadily increased from 8,200 soldiers
deployed in fiscal year 1997 to nearly 13,500 in fiscal year 2000.
These soldiers participated in more than 20 exercises and supported
annual infantry/engineer rotations in the Combat Maneuver Training
Center-Europe.
The ARNG also provides Combat Support (CS) and Combat Service
Support (CSS) functions across the spectrum to include ground and
aviation maintenance, military police, signal, medical, judge advocate
general, chaplain, finance, public affairs and engineer facility
support.

U.S. Central Command
The ARNG continues to support U.S. Central Command (CENTCOM) with
deployments in support of OPERATION DESERT SPRING (ODS). In July 2000,
Aviation Task Force 111 with units from Florida (AH-64 Apache) and
Arizona, Idaho, Montana, and Utah (UH-60 Blackhawk), provided the task
force headquarters and aviation crews. Air traffic controllers for the
task force were provided by the Indiana ARNG. Aviation Task Force 211,
consisting of aviation crews from the Utah ARNG (AH-64 Apache),
Wisconsin and Indiana ARNG (UH-60 Blackhawk), will deploy in August
2001.
The ARNG has been heavily involved in providing force protection
assets in support of ODS. Company level force protection missions began
with the mobilization and deployment of two infantry companies
involving 272 soldiers from the 39th eSB, Arkansas ARNG, in May 1999. A
second rotation involving 272 soldiers from two infantry companies--one
from the 39th eSB, Arkansas ARNG, and the other from the 41st eSB,
Oregon ARNG--began in September 1999. A third deployment occurred in
January 2000, with the 41st eSB, Oregon ARNG, providing two infantry
companies.
Rotations for the force protection mission are continuing with the
ARNG divisional combat infantry companies from the 35th ID, Illinois
ARNG, and 34th ID, Iowa and Montana ARNG, through May 2001. Infantry
companies from the 35th ID, Kansas and Nebraska ARNG, 40th ID,
California ARNG, and 29th eSB, California ARNG, will support the force
protection mission from May 2001 through May 2002.
Additional ARNG support to CENTCOM through the ODT program
increased to nearly 400 service members in fiscal year 2000. This
support consisted primarily of military intelligence, equipment
maintenance, military police, special forces and communications efforts
in support of AC exercises such as LUCKY SENTINEL and BRIGHT STAR. In
fiscal year 2001, more than 1,100 soldiers will participate in CENTCOM
exercises, including CENTRASBAT.

U.S. Pacific Command (PACOM)
The U.S. Army Chief of Staff announced in September 2000 the
alignment of ARNG divisions and enhanced Separate Brigades (eSB) to the
Korean Major Theater War Area of Operations. Now, in the Pacific
theater, bilateral and multinational training exercises require ARNG
participation. In fiscal year 2000, more than 700 ARNG personnel
participated in the three major Joint Chiefs of Staff (JCS) exercises
in Korea, and two exercises in Japan, Singapore and Thailand. Also
linguists, engineers, aviation, maintenance, and public affairs
personnel provided support in non-exercise events. In fiscal year 2001,
more than 3,000 ARNG personnel will team up with wartrace headquarters
in these same exercises to support the Commander in Chief, Pacific
Command (CINCPAC) and Commander in Chief, United Nations Command
(CINCUNC) in the Pacific region.

U.S. Special Operations Command
A significant portion of The Army's Special Operations capability
resides in the force structure of the ARNG. As key players in the
National Military Strategy, the 19th and 20th Special Forces Groups,
located in 15 states across the United States continue to provide a
high level of mission related operational tempo relief to Special
Forces Command as a result of deployments throughout the world.
Both 19th and 20th Special Forces (SF) Groups supported JCS
Exercises and Joint Combined Exercise Training (JCET) in several
theaters with a total of 1,449 soldiers deploying on 28 missions to 18
countries. In the Pacific theater, the ARNG Special Forces provided 384
soldiers to support PACOM Exercises and JCETs. These exercises included
FOAL EAGLE, ULCHI FOCUS LENS, and COBRA GOLD. Of the 384 soldiers
deployed to PACOM, 275 soldiers participated/conducted JCS Exercises
and JCETs in Korea.
In SOUTHCOM, the ARNG Special Forces supported TRADE WINDS and
CABANAS JCS exercises as well as conducted JCETs with 795 soldiers in
Honduras, Jamaica, Argentina, Antigua, Trinidad and Tobago, Saint
Lucia, Bahamas, Dominican Republic, Saint Kitts, Dominica, Grenada,
Barbados and Bolivia.
In EUCOM, the ARNG Special Forces conducted JCETs with 62 soldiers
in Germany and Portugal as well as provided 37 soldiers under
Presidential Reserve Call-up (PRC) and Temporary Tour of Active Duty
(TTAD). In CENTCOM, ARNG Special Forces supported the Special
Operations Command with four Special Forces soldiers. In U.S. Joint
Forces Command (JF COM), ARNG Special Forces supported JCS sponsored
Exercise ROVING SANDS with six soldiers. A total of 1,449 soldiers
deployed into five different theaters in support of our National
Military Strategy.

Intelligence Contributory Support (ICS) Programs
ARNG soldiers also perform real-world intelligence missions in
support of unified commanders, intelligence agencies and military
departments. Mission support areas include intelligence production,
collection, imagery analysis and linguist support. ARNG intelligence
soldiers provide cost-effective, time critical, capability-based value
to meet peacetime and contingency requirements of commanders.
Intelligence Contributory Support (ICS) programs include the Joint
Reserve Intelligence Program, the Funded Reimbursable Authority Program
and the Defense Intelligence Reserve Program. Readiness Training,
Intelligence (REDTRAIN) also provides live environment scenarios for
tactical intelligence training.

Military Intelligence
The Army National Guard's Military Intelligence (MI) force is the
largest of any of the Reserve Components. With trained and ready MI
soldiers, the ARNG performed approximately 20,000 man-days in support
of military operations.
In fiscal year 2000, MI operations ranged from individual language
training in the Republic of Vietnam to conducting document exploitation
for the Department of Defense's (DOD) Prisoner of War (POW) and Missing
in Action (MIA) Task Force.
In addition, the ARNG's MI soldiers and units supported all the
theater CINCs and their major subordinate commands.
Guard MI soldiers in Japan participated in joint exercises, acting
as watch officers in Korea and for Joint Task Force Bravo in South
America. In addition, ARNG MI soldiers provided a wide array of support
from acting as translators for EUCOM personnel while in Poland to
analyzing intelligence for Balkans operations.
The ARNG military intelligence community continues to play a vital
role in the Balkans. Numerous ARNG MI soldiers have deployed to Bosnia
and Kosovo as part of force protection teams as well as individual
augmentees. The 629th MI Battalion, 29th ID (L) deployed 129 soldiers
to support the 49th Armored Division (AD) for its rotation. The 241st
MI Company/41st eSB will support the 29th ID for its deployment.
ARNG MI elements also conducted mission augmentation for agencies
such as the Office for the Deputy Chief of Staff for Intelligence
(ODCSINT), Defense Intelligence Agency (DIA), U.S. Border Patrol, U.S.
Customs, and the U.S. Coast Guard. These soldiers also participated in
counterdrug operations and other law enforcement activities.
This starts the second year for the newly created ARNG Anti-
terrorism/Force Protection (AT/FP) program. The program started from
scratch and has come a long way. The program has made great inroads
with at least one soldier from every battalion in the ARNG receiving
training in AT/FP.
The ARNG directorate provided training on how to write and
formalize state level AT/FP plans and has been able to validate
requirements in the Program Objective Memorandum (POM). Additionally,
the ARNG has been instrumental in the rewrite of Army Regulation 525-
13, the Army's AT/FP guide.
The ARNG coordinated with the Department of the Army in identifying
installations that require separate AT/FP plans and developed a
timeline for providing assistance to the states and installations that
require them.

Major Exercises in the Continental United States (CONUS)
ARNG units throughout the country trained as part of the combined
arms team in several major fiscal year 2000 Continental United States
(CONUS) exercises. More than 12,300 soldiers from 142 units trained on
mission essential tasks through participation in exercises such as
ROVING SANDS, GOLDEN COYOTE, COOPERATIVE SAFEGUARD, GRECIAN FIREBOLT,
PURPLE DRAGON, GOLDEN CARGO and GLOBAL PATRIOT.

Army National Guard (ARNG) State Mission Support
Domestic mission operational tempo (OPTEMPO) during fiscal year
2001 continues at the rapid pace set in fiscal year 2000. Through the
end of October 2000, 17 states had conducted 25 Emergency Response
Missions totaling more than 6,800 man-days of effort. This level of
effort is expected to continue throughout fiscal year 2001 and into
fiscal year 2002.
In addition to responding to local emergencies, the ARNG routinely
performs missions that allow units to assist communities while
performing required training activities. Under the Innovative Readiness
Training (IRT) Program, the ARNG provided in excess of 250,000 soldier
man-days in fiscal year 2000 to improve schools, parks and recreation
facilities, build and maintain roads, and administer immunizations and
provide medical care. During fiscal year 2001, continued support at
even greater levels is expected.

Weapons of Mass Destruction Mission
The National Guard is in the process of validating and fielding 32
full-time Civil Support Teams (CSTs) as authorized by Congress. States
that do not have these full-time CSTs available will have teams
composed of part-time Guard personnel. These part-time CSTs will
provide a partial response capability.
CSTs have been given the mission of:
--Assessing a chemical, biological, radiological or nuclear event in
support of the local incident commander.
--Advising civilian responders regarding appropriate actions.
--Facilitating requests for assistance to expedite arrival of
additional state and federal assets to help save lives, prevent
human suffering and mitigate property damage.
These teams will be called upon as a part of a state emergency
response or will mobilize in a federal support role. Emergency
responders will receive training through the National Guard's Distance
Learning network.
The Guard is also planning additional training and equipment
fielding for other Guard units that will be used to respond in missions
involving the reconnaissance of chemical, biological and radiological
events and patient decontamination.
Plans are currently underway to task organize existing National
Guard units within each state to form a Joint State Task Force
Headquarters for consequence management that develops additional
capability to enhance this important civil support mission. The Joint
State Task Force headquarters is responsible for developing the
consequence management annex to their state's emergency response plan.
In addition, the Joint State Task Force headquarters will act as the
interagency coordinator within that state, responsible for conducting
community readiness exercises to assess the state's emergency response
plan.
Another means to enhance preparedness within our communities is
through the Guard's Distance Learning network. The network provides
invaluable training opportunities to state and local emergency first
responders in communities where training resources are limited.
Additional resources are needed to more effectively manage and enhance
the national and state terrorism response assets.

Operational Support Airlift Agency (OSAA)
The Operational Support Airlift Agency (OSAA) is a Department of
the Army Field Operating Activity of the National Guard Bureau that
provides management, oversight, and execution of The Army's Continental
United States (CONUS) Operational Support Airlift (OSA) program with
additional support to Hawaii, Alaska, Puerto Rico and the Virgin
Islands. OSAA is the ARNG's proponent agency for fixed wing aviation
issues, procedures, and resourcing. Activated in 1995, OSAA earned
immediate recognition as one of The Army's first ever multi-component
operational units merging assets and personnel from the Active
Component (AC) and both Reserve Components for a 24-hour continuous
operation.
Headquartered at Fort Belvoir, Va., OSAA provides command, staff,
and resourcing for fixed wing assets stationed in 69 locations
throughout CONUS as well as eight separate locations Outside the
Continental United States (OCONUS). The brigade level command known as
OSAA, and battalion level Operational Support Airlift Command (OSACOM)
commanders share a common staff for economy and efficiency. In order to
provide the best mix of airlift support to widely scattered Department
of Defense (DOD) elements, OSAA maintains a unique organizational
network of six distinctly different fixed wing aircraft types dispersed
across the several states and territories.
Mission diversity is a hallmark of OSAA that underscores the
significance of this program. Delivering assessment teams to storm-
damaged states or providing aircrews and planes for OCONUS humanitarian
relief is routine. Other recurring missions include paradrop support
for special operations units or hauling large parts. These missions
demonstrate Army fixed wing OSA capability and responsiveness to
perform timely air movement of DOD passengers and cargo. On a daily
basis, OSAA flies Army personnel and other DOD travelers on official
business, subject to priority and cost-saving criteria.
OSAA's airlift support is provided by a variety of fixed wing
aircraft including C-12, C-23, and C-26 turboprop airplanes and UC-35,
C-20, and C-37 turbojets. For optimum efficiency, the deliberate mix of
personnel includes part-time Guard soldiers, state and federal level
Active Guard and Reserve (AGR) officers, as well as AC aviators and
Department of the Army civilians (DACs).
Fiscal year 2000 was a banner year for OSAA's flying hour program.
Never before in the agency's history has flying hour execution reached
the performance levels of this single 12-month period. OSAA aircraft
flew 60,261 hours, transported more than 1.6 million pounds of cargo,
and carried 108,242 passengers in direct support of DOD missions. The
heightened passenger levels alone represent an increase of
approximately 20 percent over fiscal year 1999. Beneficiaries of this
successful mission execution include both the DOD and the American
taxpayer through cost avoidance totaling more than $50 million in
related business transportation expenses.
OSAA provides command oversight to the Fixed Wing Army National
Guard Aviation Training Site (FWAATS) in Bridgeport, W.Va. The mission
of FWAATS is to conduct individual aircrew training in modernized fixed
wing aircraft operated by the ARNG. FWAATS performs formal academic
training under the Total Army School System (TASS) and conducts
individual aircrew training, instructor qualification, instrument
examiner, standardization training, and flight engineer qualification
courses. FWAATS routinely trains between 200 and 300 aircrew members
per year, hosting aviators and flight engineers from across the
country.
OSAA is an ARNG command committed to providing safe and reliable
fixed wing aviation service from the states for any contingency. By
harnessing Reserve Component efficiency, OSAA proves the viability of
multi-component operational mission support on a daily basis to any DOD
requester. OSAA is a command uniquely structured to ensure the highest
state of wartime readiness through the effective execution of its
peacetime mission.

MANNING THE FORCE
FULL-TIME SUPPORT

Full-Time Support (FTS) personnel are key contributors in achieving
Army National Guard (ARNG) readiness objectives. Military Technician
and Active Guard and Reserve (AGR) personnel are involved in every
facet of the day-to-day operations, to include administration, payroll,
supply, training, maintenance, recruiting and retention efforts in
support of the ARNG. Achieving sufficient levels of FTS to enhance unit
readiness and quality of life for our traditional part-time soldiers
and their families remains a high priority.

Validated Requirements
During the Program Objective Memorandum (POM) 2002-07 cycle, The
Army validated a need for 83,650 full-time support personnel to support
a force structure of 388,000 spaces. This represented 41,321 AGR and
42,329 Military Technician requirements. Requirements are determined
through detailed analysis of workload and are calculated for the entire
ARNG force structure. However, FTS requirements associated with
emerging missions such as civil support and initiatives to support
Active Component (AC) and Reserve Component (RC) integration are
determined annually and are additive to the total requirements
reflected above.

Authorization vs. Validated Requirements
The National Defense Authorization and Appropriation Acts provided
an increase of 526 AGR and 771 military technician authorizations for
fiscal year 2001 for an overall end strength of 22,974 AGRs and 24,728
Military Technicians. Despite the increase in FTS, the fiscal year 2001
authorized levels equate to only 57 percent of the validated
requirement. This has had an impact on our ability to adequately staff
local armories, thereby diminishing the ARNG community presence.
In addition, Congress provided for an increase in the number of
personnel serving in senior officer and enlisted grades (controlled
grades) to support promoting fully qualified AGR soldiers who have been
serving in higher grade positions, but whose career progression has
been restricted due to senior grade caps. As the ARNG seeks additional
full-time support authorizations, there is a need for a corresponding
increase in controlled grades to provide career opportunities
commensurate with the requirement for a career AGR program.

Current FTS Manning Levels in the ``High Risk'' Category
Due to funding shortfalls, The Army has applied a methodology based
on deployment scenarios to arrive at a minimum acceptable level of
full-time support. Falling below that level would result in
unacceptable risk in meeting readiness goals as established in Army
regulations and in the Defense Planning Guidance. This is referred to
as the FTS ``Department of the Army (DA) high-risk'' requirement level.
The methodology is the same for both of the Army's reserve components.
For the ARNG, the ``high-risk'' requirements are 30,402 AGR and 29,319
Military Technician personnel. Given that current authorization levels
are significantly below the high-risk requirement level, The Army has
developed an incremental growth plan to achieve the high-risk level
over a 10-year period as reflected in the chart to the right. The
Army's recognition that increased FTS is needed to enhance overall
readiness of the RC is unprecedented.

Recruiting and Retention Overview
The ARNG's fiscal year 2000 end strength objectives included
achieving a selected reserve strength of 350,000--38,308 commissioned
and warrant officers and 311,692 non-commissioned officer and enlisted
personnel. To attain this goal, enlisted gains were programmed at
54,034, officer gains at 2,991 and enlisted extensions at 46,230.
Enlisted losses were projected not to exceed 61,503.

Enlisted Personnel Recruiting and Retention
Enlisted personnel recruiting and retention were continuing success
stories for the ARNG during fiscal year 2000. Enlisted accessions for
the year exceeded the program objective of 54,034 by totaling 62,015,
or 114.7 percent of the goal. Non-prior service (NPS) accessions and
prior service (PS) accessions also exceeded program objectives. NPS
accessions were 32,072, or 118.7 percent of the objective, and PS
accessions were 29,943, or 110.8 percent of the objective. These
statistics reflect an accession mix of 51.7 percent NPS enlistments and
48.3 percent PS enlistments. The overall Army National Guard loss rate
through the end of fiscal year 2000 was 19.9 percent versus an overall
objective of 18 percent.

Incentive Programs
The Selected Reserve Incentive Programs (SRIP) for fiscal year 2000
offered the following:
--An $8,000 enlistment bonus for Non-Prior Service (NPS) enlistees
into high priority units.
--A $5,000 enlistment bonus for NPS enlistees into non-high priority
units.
--An $8,000 Civilian Acquired Skills Program (CASP) bonus for NPS
enlistees.
--An affiliation bonus for prior-service enlistees based on their
remaining Military Service Obligation (MSO).
--The Student Loan Repayment Program for NPS enlistees and current
members of the ARNG with existing loans who reenlist or extend
in a high priority unit.
--A $2,500 three-year reenlistment/extension bonus.
--A second three-year reenlistment/extension bonus of $2,000 for
soldiers with less than 14 years total service upon completion
of the first three-year reenlistment/extension bonus. To be
eligible for two three-year reenlistment/extension bonuses, the
contracts must be consecutive.
--A $5,000 six-year reenlistment/extension bonus for members of high-
priority units who have less than 14 years total service at the
time of the reenlistment or extension and who have not received
a previous reenlistment/extension bonus.
--A $2,500 three-year prior service enlistment bonus for PS personnel
who have completed their MSO, have less than 14 years total
service and have received an honorable discharge.
--A second three-year prior service bonus of $2,000 for soldiers
having less than 14 years total service upon completion of the
first three-year prior service enlistment bonus.
--A $5,000 prior service enlistment bonus for a six-year reenlistment
for PS personnel who have completed their MSO, have less than
14 years total service, have received an honorable discharge
and have not received a previous prior service enlistment
bonus.

Benefits Administration Reporting and Tracking System (BART)
In January 2001, a PC-based software system that manages service
member benefit programs was expected to be implemented in all of the
states. Known as the Benefits Administration Reporting and Tracking
System, or BART, this system contains reporting features designed to
administer the following educational benefit programs: Tuition
Assistance Program, Montgomery GI Bill Program, and Bonus Incentives
Programs. In addition, BART monitors the regulatory compliance
components of program budgets, life-to-date and year-to-date maximum
benefits, and automatically calculates percentages or maximum rate
limits through easy-to-use program modules.
This system was developed as a result of the U.S. Army Auditing
Agency audit conducted from April 1994 through April 1995. A recent
Inspector General assessment also made the same recommendation. The
BART system tracks program eligibility, payment schedules, programs
obligations, flags files for follow-up requirements, and maintains
incentive payment history at the social security number level of
detail.

Education Assistance
The ARNG has traditionally used educational incentives as a
recruiting and retention tool. Educational benefit programs are good
for the ARNG as well as the individual soldier. Tuition assistance was
provided to more than 22,000 part-time Guard soldiers in fiscal year
2000. Soldiers were offered 75 percent tuition assistance for 15
semester hours not to exceed $3,500 per soldier per fiscal year.
Distance Learning (DL) and External Degree Tuition Assistance
Distance Learning (DL) and external degree tuition assistance were
available for soldiers and ARNG Department of the Army (DAC) employees
in fiscal year 2000. These benefits were provided upon registration for
traditional semester length courses that required 24 weeks or less for
completion. Tuition reimbursement for courses longer than 24 weeks was
also available. Enrollment in DL programs has increased threefold as a
result of the up-front tuition assistance offered for the shorter
courses. DL programs allow soldiers to pursue vocational,
baccalaureate, graduate and doctoral studies without entering a
traditional classroom. These programs will be managed by the Defense
Activity for Nontraditional Education Support (DANTES) program starting
in January 2001.

Defense Activity for Non-traditional Education Support (DANTES)
All 33 nationally recognized certification exams offered through
the DANTES were funded through the ARNG Tuition Assistance program in
fiscal year 2000. Previously, only the Automotive Service Excellence
(ASE) Exam and the Food Protection Certification Program (FPCP) exam
were funded. Other exams funded under this effort include the
Educational Institute of the American Hotel and Motel Association (EIAH
and MA) and the Institute for Certification of Computing Professionals.
Soldiers are eligible to take certification exams once they complete
Initial Active Duty for Training (IADT) and are awarded a Military
Occupational Specialty (MOS).

Servicemembers Opportunity Colleges (SOC)
Working with the ARNG, the Servicemembers Opportunity Colleges
(SOC) continued to provide college workshops to encourage increased
enrollment of non-member accredited colleges and universities to join
SOC in support of the local ARNG community with post-secondary
education programs. SOC colleges limit their on-campus requirements to
25 percent of required attendance, a prerequisite for many ARNG
soldier-students who would otherwise be unable to attend. SOC also
worked in the recruiting and retention arena along with strength
maintenance non-commissioned officers to encourage young men and women
to enlist.

Officer Accessions and Retention, Fiscal Year 2000
During the implementation of the Reserve Officers Promotion
Management Act (ROPMA), time in grade (TIG) requirements for promotion
to first lieutenant were changed from three years to two years. Second
lieutenants with an excess of two years TIG were not grandfathered;
therefore, instead of seven years time in service for consideration for
promotion to captain, several year groups served eight. Corrective
measures were taken to rectify this error, and the second phase of the
program began in November 2000.
The records of captains who were promoted by boards that met from
November 1998 to February 1999 will be reviewed to determine if an
adjustment to their dates of rank is required. Some captains may be
eligible for as much as nine to 12 months of back pay with adjustment
of their dates of rank.
The total officer strength at the end of fiscal year 2000 was
37,400. While officer accessions were up 11.8 percent over fiscal year
1999 accessions, officer end strength was 908 officers short of the
programmed objective. This shortfall was due to a higher than expected
loss rate among ARNG officers. The ARNG is working vigorously to
identify the reasons for these higher than projected losses by
conducting telephonic and mail surveys with departing officers. Survey
results to date reveal a variety of reasons: some officers wanted more
time to spend with their families, some had conflicts balancing their
civilian jobs with their military duties, some were unable to attend
training needed to advance their careers because of lack of funding or
training seat availability, and others cited personal reasons.
Accelerated Officer Candidate School (OCS) Program
The ARNG initiated an accelerated National Guard Bureau (NGB)
Officer Candidate School (OCS) Program in 1996 that has proven very
successful. This accelerated program cuts 11 months off the traditional
OCS course duration--eight weeks full-time versus 13 months part-time.
This is particularly beneficial to states experiencing large company-
grade officer vacancies.
The NGB has been programming about 80 students per year for the
last five years. The class size projection doubled to 160 students in
fiscal year 2001 due to forecasted training requirements submitted by
the states.
The shortage of company grade officers continues to be a challenge
across The Army. In an attempt to decrease company grade officer
losses, the ARNG submitted proposed legislation to the Assistant
Secretary of the Army for Manpower and Reserve Affairs (ASA M&RA) under
the Unified Legislation and Budgeting (ULB) process in April 2000 that
will offer a student loan repayment program incentive for company grade
officers. The ARNG is also exploring the feasibility of submitting
legislation to offer potential bonuses for company grade officer
continuation.
In addition, Cadet Command authorized 800 Guaranteed Reserve Forces
Duty contracts for the Army Reserve Components for fiscal year 2001.
This is the first year that Cadet Command has established a separate
mission for Reserve Component (RC) accessions. The ARNG will receive
approximately 500 new accessions from this mission goal.
The ARNG also supports the Deputy Chief of Staff for Personnel's
(DCSPER's) initiative for Selective Retention Boards that will allow
selected captains and majors to be retained so that they may reach 20
years of active service. Further, the ARNG also supports the DCSPER's
initiative to select captains for promotion who do not possess a
baccalaureate degree or military education certification. The actual
promotion to the next higher grade will become effective at such time
as the individual provides proof of civilian or military education
requirement completion.

Warrant Officer Personnel Management
The Army National Guard continues to address significant challenges
in warrant officer personnel management. Technical warrant strength is
down to 71.8 percent, while aviation warrants have fallen slightly
below requirements to 94.3 percent. The challenge for the future lies
in the introduction of the Warrant Officer Personnel Management System,
which will mirror the transition to Officer Personnel Management System
(OPMS) XXI.

Enlisted Personnel Management
The ARNG has continued with its personnel management reform as it
pertains to enlisted soldiers. In December 1999, the ARNG became a
participant in the Army's Development System XXI initiative.
Interacting with Army proponents, the issues of force structure
changes, training and strength maintenance as related to enlisted
personnel management became topics of intense interest among Army
leadership.
Soldiers from the field requested that The Army leadership review
the ARNG enlisted promotion system. As a result, minor changes will be
incorporated within the next two years. The system remains virtually
unchanged in its intent and process, but will place more emphasis on a
soldier's potential to serve at a higher level of responsibility based
on his or her performance.
Key enlisted personnel management issues have been successfully
staffed through both the Military Personnel Management Offices and the
State Command Sergeants Major in an effort to meet soldier
expectations. Additionally, the Army Human Resource Division has been
actively involved with the functional review of various Army proponents
and their current initiatives to consolidate enlisted MOS fields as
directed by the Army Chief of Staff. The ARNG has been successful in
making the proponents aware of the impacts their proposed changes or
initiatives could have on the RC when considering wholesale changes
within the AC.

ORGANIZING FOR SUCCESS

The Army Transformation
The U.S. Army is transforming based upon the emerging security
challenges of the 21st century and the need to respond more rapidly
across the full spectrum of operations. As an integral part of The
Army, the Army National Guard (ARNG) will transform as well. One ARNG
brigade is expected to begin transformation prior to 2008. The unit to
transform is expected to be chosen by the Chief of Staff of the Army
(CSA) in the fall of fiscal year 2001. The Director of the ARNG
nominated two units to be the first ARNG interim brigade; the 56th
Brigade of the 28th Infantry Division, Pennsylvania ARNG, and the 155th
enhanced Separate Brigade (eSB), Mississippi ARNG.
In the current plan the entire ARNG will transform to the objective
force by fiscal year 2032. Before transformation is complete, the
portion of the ARNG not yet transformed will remain part of the Legacy
Force. The Legacy Force is the strategic hedge that provides essential
capability to support the National Command Authority and warfighting
CINCs throughout the Transformation activities.
The Active Army will cascade the most modern equipment to the ARNG.
Selected legacy formations in both the Active and Reserve Components
will be recapitalized to enhance key armored and aviation systems, as
well as improve light force lethality and survivability.

Army National Guard Unit Structure
The ARNG continues to structure its forces to provide for a
compatible and inter-operable force that is fully capable of
accomplishing state, national, and international missions in war and
peace. To meet these requirements, the ARNG maintains a balanced mix of
combat, combat support (CS), and combat service support (CSS) units.
These units are structured to integrate seamlessly with Active
Component units as needed.
The ARNG force structure allowance was 388,000 in fiscal year 2000.
The ARNG structure laydown is as follows: 15 enhanced Separate
Brigades, eight divisions, and three strategic brigades (31st SAB, 92nd
SIB, and the 207th Scout Group). The ARNG also maintains two Special
Forces groups. The composition of the ARNG is 52 percent combat, 17
percent CS, 22 percent CSS, and 9 percent table of distribution and
allowances (TDA) units.
The ARNG force structure continues evolving to best support the
National Military Strategy (NMS). Ongoing ARNG initiatives will ensure
the best mix of forces available to accomplish missions directed by the
NMS. The current force structure must have a robust, fully funded
modernization program to enable the smaller force to accomplish all of
its missions. The ARNG force must remain trained, ready, and equipped
to defend our national interests during the 21st century. It must also
be ready to respond on short notice to the needs of local communities
across the United States.
Army National Guard Division Redesign Study (ADRS)
On May 23, 1996, the Secretary of the Army (Sec Army) approved the
Army National Guard Division Redesign Study (ADRS) plan to convert up
to 12 ARNG combat brigades and support slice elements from two
divisions into required CS/CSS structure. The plan converts up to
48,000 spaces of ARNG combat force structure to CS/CSS beginning in
fiscal year 2000 and continuing through fiscal year 2012. The first six
brigades have been identified and will be under conversion through
fiscal year 2009. Actions beyond those will be linked to the CSS
Transformation analysis currently underway. Given The Army
Transformation initiative in progress, efforts beyond ADRS Phase II
will be linked to the requirements of Transformation.
Two billion dollars exist in the POM to cover existing ADRS funding
requirements: $1.9 billion for equipping and $100 million for training.
The ARNG, working as The Army executive agent for ADRS has identified
requirements in installations, environmental, manning and sustainment
that can be supported out of the equipping funding.
The AC/ARNG integrated division concept resulted from the ADRS, as
an additional proposal to form two integrated divisions. Each
integrated division consists of an AC headquarters and three ARNG eSBs.
On Dec. 2, 1997, the Secretary of the Army approved establishing a
heavy division headquarters at Fort Riley, Kan. with a forward element
at Fort Jackson, S.C. and a light division headquarters at Fort Carson,
Colo. They formally activated on Oct. 16, 1999. The division
headquarters are currently non-deployable and tailored to provide
training/readiness oversight and evaluation to assigned eSBs. The eSBs
selected for the 24th ID Mechanized (--) are the 30th Mechanized
Infantry Brigade (North Carolina), the 48th Mechanized Infantry Brigade
(Georgia), and the 218th Mechanized Infantry Brigade (South Carolina).
The eSBs that comprise the 7th ID (--) are the 39th Infantry Brigade
(Arkansas), the 41st Infantry Brigade (Oregon), and the 45th Infantry
Brigade (Oklahoma).
Teaming is a program that pairs selected AC and ARNG units for
mutual support of operational requirements. Partnered divisions conduct
joint planning, training, and readiness assessments. The ARNG divisions
will augment and assist AC divisions in global response. Teamed units
are encouraged to seek mutually supporting operational training
opportunities. Currently, teaming is limited to divisional units. The
teamed divisions under III Corps are 1st CAV and 49th AD (Texas), 4th
ID and 40th ID (California). Under XVIII Corps are 3rd ID and 28th ID
(Pennsylvania), 10th ID and 29th ID (Virginia).

Multi-component Initiative (Units formed from Active, Reserve and Guard
personnel)
The multi-component initiative blends authorized personnel from
more than one Army component (AC, USAR, and/or ARNG) into a single
documented unit. The objectives of the multi-component initiative are
to enhance AC/RC integration while optimizing the unique capabilities
of each component, thus improving the readiness and resource posture.
The Secretary of the Army approved an overarching multi-component MTOE
policy in June 1998. Total Army Analysis (TAA-05) selected 12 initial
MTOE units with which to develop and test procedural options in fiscal
year 1999/2000. Thirty-three additional units were subsequently added
for fiscal year 1999/2000.

EQUIPPING THE GUARD

Army National Guard Modernization and Transformation
The aging AH-1 Cobra and UH-1 Huey ``legacy'' helicopters are only
marginally supportable today insofar as economic maintenance is
concerned. The ARNG Cobra and Huey fleets are rapidly becoming an
expensive maintenance burden. Long-term modernization plans called for
the UH-1 to be replaced by the UH-60L Blackhawk and the AH-1 to be
replaced by the AH-64A/D Apache Longbow in the Aviation Modernization
Plan.
The Army transformation initiative announced by Army Chief of Staff
General Eric K. Shinseki and briefed to Congress in fiscal year 2000
proposed sweeping changes to aviation force structure. Current
structure converts to an aviation Multi-Function Battalion (MFB). The
MFB has a headquarters company, an attack company with AH-64 Apaches, a
reconnaissance company with RAH-66 Commanches, a utility company with
UH-60 Blackhawks and an Aviation Unit Maintenance (AVUM) company.
Division aviation brigades will consist of a headquarters, two MFB
battalions, a division aviation support battalion, a cavalry squadron
(with three ground troops, an air cavalry troop with RAH-66s and an
AVUM troop), and an Unmanned Aerial Vehicle (UAV) company.
Restructuring makes all division aviation battalions and aviation
brigades look the same. Similarly, corps aviation converts to a
structure with an aviation combat brigade with three MFBs, an aviation
combat support brigade with two UH-60 battalions, a CH-47 Chinook
battalion and an Aviation Intermediate Maintenance (AVIM) battalion.
The total number of aviation personnel is expected to increase
slightly (about 2 percent), but the revised structure results in a
reduction in headquarters elements. Under the initial Transformation
guidance, the ARNG is expected to lose two brigades, six battalions and
36 companies. The Transformation has an impact on ARNG aviation in
every state, not only in personnel and aircraft, but also in facility
construction and qualification training for aviators and maintainers.

Accelerated Retirement of Legacy Aircraft
Simultaneously with the restructuring is an Army initiative for
accelerated retirement of legacy aircraft (AH-1, OH-58A/C and UH-1),
which calls for divestiture of the AH-1s in fiscal year 2001 and the
OH-58A/Cs and UH-1s in fiscal year 2004. Implementation within these
time frames depends upon transferring older aircraft (AH-64s and UH-
60s) from the Active Component (AC) to the ARNG. The ARNG has proposed
limited retention of AH-1s, OH-58s and UH-1s to create a bridge that
will permit retention of valuable aviation personnel skills pending
acquisition of replacement aircraft.
The retirement of the UH-1 with limited or no replacement utility
aircraft will leave states without sufficient utility aircraft to
execute state contingency missions such as disaster relief responding
to floods and earthquakes, as well as fire fighting. Aircraft
acquisition is a constraint to implementation. For example, the Force
Development Division of the Office of the Deputy Chief of Staff for
Operations (DAMO-FDV) estimates an Army requirement of 330 additional
UH-60s at the end of the fiscal year 2002-07 Program Objective
Memorandum (POM), but with current acquisition plans of 10 per year it
will be the year 2040 before the requirement is filled. Meanwhile, the
ARNG continues to coordinate the aviation force structure
redistribution to accommodate the Army Aviation Transformation Plan.

Major Fiscal Year 2002 Force Modernization and Future Force
Modernization Plans
The Army National Guard (ARNG) modernization strategy is to provide
for a compatible and inter-operable force. This force will be capable
of fulfilling state, national and international missions in war and
peace. Resourcing this force with modernized equipment and training
packages to operate this equipment is key to maintaining the quality
force the nation expects from the ARNG.
The modernization of field artillery units to M109A6 Paladin,
Multiple Launch Rocket Systems (MLRS) and Highly Mobile Artillery
Rocket Systems (HIMARS) are all significant initiatives. The ARNG has
assumed the corps level air defense role with the activation of nine
Avenger battalions. All nine corps Avenger battalions are fully fielded
with the weapon system.
Congress appropriated $95 million in fiscal year 1998 to procure
M2A2ODS Bradley Infantry Fighting Vehicles (BIFV) for the ARNG. Follow
on fiscal year 2003 Congressional appropriations are required to equip
the Georgia ARNG. The eight heavy enhanced Separate Brigades (eSB) are
currently equipped with M1A1 Abrams tanks. Initiatives are under way to
upgrade the remaining armor from M1A1 to M1A1AH.
By the end of fiscal year 2001, the ARNG will have 18 M109A6
Paladin battalions. The ARNG divisional battalions still require
Paladin for modernization. Due to a funding shortfall from fiscal year
2000 and fiscal year 2001, the MLRS conversion program will be delayed
for two years (from fiscal year 2001 to fiscal year 2003). The fielding
of the Highly Mobile Artillery Rocket System (HIMARS) to the ARNG is
tentatively scheduled to begin in fiscal year 2005.
The ARNG anticipates fielding the M2A2ODS BIFV to the 218th eSB,
South Carolina ARNG, through fiscal year 2002. This begins to address
the need to provide the eSBs with upgraded BIFVs, and the further
cascading of older Bradleys into ARNG divisions. These initiatives will
move the ARNG along in its modernization strategy to ultimately have a
pure fleet of BIFVs.
The remaining eight corps Avenger battalions will be fielded with
the Forward Area Air Defense Command, Control and Intelligence
(FAADC\2\I) System and Sentinel radars from fiscal year 2001 through
fiscal year 2003.
The Army Battle Command System (ABCS) is The Army's architecture
for the overall integration of the digital command and control system
found at all echelons from theater level to the weapons platform.
Currently, ARNG units assigned to III Corps will receive the required
ABCS applications by fiscal year 2004. However, to make the ABCS
applications inter-operable and functional, units will require a
digital pipeline. The Enhanced Position Location Reporting System
(EPLRS) is the current system that supports ABCS applications until the
Joint Tactical Radio System (JTRS) is fielded to the ARNG. Funding in
the current Program Objective Memorandum (POM) to support digitization
of the eSB and ARNG divisions does not exist.
Additional modernization support comes from the continued fielding
of SINCGARS radios--a key component in interoperability with The Army.
The fielding plan has a window of June 2000 through June 2004 for all
15 eSBs, eight ARNG divisions and remaining units. Ten eSBs have been
fielded with SINCGARS radios to date. The remaining five eSBs are
currently receiving them. SINCGARS fielding to the eSBs should be
completed in June 2001. The first three of the eight ARNG divisions
will start fielding SINCGARS from March through August 2001, finishing
early in 2002. In addition, echelons above division, field artillery
brigades and air defense units, which support early deploying forces,
are receiving SINCGARS SIP radios.
The Javelin is currently being fielded to the Active Army as its
medium weight manportable Infantry anti-armor weapon system. Javelin
replaces the Dragon medium anti-tank weapon. The current budget fields
the Javelin Command Launch Unit (CLU), as a replacement for Dragon, to
100 percent of the ARNG eSBs and Special Forces (SF) Group
requirements. Fielding to the ARNG eSBs and SF Groups will begin in
fiscal year 2004 and is expected to be complete in fiscal year 2006.
Fielding for funded ARNG division is planned from fiscal year 2006 to
fiscal year 2008. However, this second phase of fielding has evolved to
the point where more than three division equivalents and corps engineer
battalions are currently unfunded. In addition, unit basic loads of
missiles are also unfunded.
The ARNG received more than 1,700 MK-19 Grenade Machine Guns in
fiscal year 1999. Total requirement for the MK-19 is more than 4,000.
By the second quarter of fiscal year 2003, the ARNG will receive
another 2,653 weapons. The MK-19 is unfunded past the second quarter of
fiscal year 2003.
The ARNG started receiving the M240B Medium Machine Gun during the
third quarter of fiscal year 2000. Fielding of the eSBs will begin in
the second quarter of fiscal year 2001 and should be completed by the
second quarter of fiscal year 2002. Remaining ARNG units down to Force
Package 4 will receive the M240B beginning in the third quarter of
fiscal year 2002 through the third quarter of fiscal year 2003.
The M4 Carbine was fielded to ARNG units during the third quarter
of fiscal year 2000 and will continue to the eSBs through the third
quarter of fiscal year 2002. A total of 39,541 M4s going to ARNG units
down to Force Package 4, beginning in the fourth quarter of fiscal year
2002, are now unfunded because of Transformation.
The ARNG has received several thousand M249 Squad Automatic Weapons
(SAWs), and will receive 31,546 SAWs by the end of the third quarter of
fiscal year 2003. This will fill 84 percent of requirements. Fielding
of M16A4s to the ARNG begins in the first quarter of fiscal year 2003
with 3,168 weapons. The fielding will continue through the fourth
quarter of fiscal year 2003, with a final fielding of 23,849 M16A4s to
the ARNG by the end of the fourth quarter of fiscal year 2006.
The AN/PVS-14 Monocular fielding was completed in November 2000.
Fielding of the AN/PVS-7D began in the third quarter of fiscal year
2000 to the eSBs, and will continue through the end of fiscal year
2002. Fielding to Guard divisions and remaining units will begin after
2002.
The final fielding of the M40 Protective Mask, M42 Protective Mask
and M41 Protective Mask Test Set to the ARNG continued throughout
fiscal year 2000. ARNG fielding will conclude by the fourth quarter of
fiscal year 2001.
The ARNG completed the fielding of 168 FMTVs to field artillery,
transportation and quartermaster units in fiscal year 1999. The second
fielding of FMTVs to the ARNG will start in fiscal year 2001 and
conclude in fiscal year 2003.
The ARNG is programmed to receive 1,034 M1078 Light Medium Tactical
Vehicles (LMTVs) to modernize high priority units. The ARNG will
receive the first of 380 LMTVs by the fourth quarter of fiscal year
2001. The third fielding of FMTVs will start in fiscal year 2007 and
conclude in fiscal year 2008. The ARNG will receive an additional 2,030
FMTVs for fielding to First Digitized Corps ARNG units. The 2,030 FMTVs
will consist of 1,200 LMTVs and 830 MTVs. Other Procurement Army (OPA1)
is the source of funding for the second phase of FMTV fielding.
During fiscal year 2001 and fiscal year 2002, 2-kilowatt Military
Tactical Generators will be fielded to all ARNG units. Also during this
time, the highest priority ARNG units will receive the 5-60-kilowatt
Tactical Quiet Generators.

READINESS

Readiness--Personnel and Equipment
The Army National Guard (ARNG) is committed to providing support
for the National Military Strategy, Operations Other than War, and
local domestic and humanitarian missions in all 50 states, three
territories and the District of Columbia. Through a combination of AC
equipment cascading, equipment procured and issued via the fiscal year
Defense Plan, separate appropriations such as the National Guard
Reserve Equipment Appropriation and our own initiatives, equipment on
hand levels of fill remain steady throughout the ARNG.
As The Army goes through a period of transformation, the
modernization of ARNG units is a major concern due to our increased
involvement in deployments to areas such as Southwest Asia (SWA),
Bosnia, and Kosovo. The Commanders in Chief (CINCs) expect ARNG
soldiers to be fully trained and equipped upon arrival in the area of
operation, but this is not always successfully accomplished. In many
cases, it has been necessary to request out-of-cycle fieldings to
provide required equipment for various ARNG units selected for
deployment. This impacts the entire equipping and fielding process.
Our logistical challenges today center around four areas:
modernization and interoperability; sustainment of the aging Tactical
Wheel Vehicle (TWV) fleet; shortages of TWVs and the lack of military
technicians. Interoperability issues resulting from the lack of
modernized equipment continue to challenge the ARNG's ability to
deploy, shoot, move and communicate.

Outdated Equipment
ARNG equipment such as the M1 Abrams Tank, M2/M3 Bradley Fighting
Vehicles and various electronic devices and communication systems such
as the Single Channel Ground and Airborne Radio System (SINCGARS) and
Night Vision Devices are in short supply and/or several models or
iterations behind the Active Component (AC). Recent deployments in
support of Joint Chief of Staff (JCS) Exercises and humanitarian
missions often compete for the same, limited equipment identified for
other operations and missions.

Sustainment of Aging Fleet
Sustainment of the aging TWV fleet is another area of great
concern. More than 25 percent of the ARNG's total TWV fleet has
exceeded its normal service life. This fleet is aging faster than it
can be modernized. Sustainment costs both in repair parts and
maintenance hours continue to escalate. The Army has addressed this
issue with the proposed start of various rebuild programs, but without
resolution of TWV shortages, this issue will continue to manifest.
Shortages of TWVs compound the sustainment issue. Modernized TWVs are
needed now to fill critical shortages, and to displace and retire aged
vehicles.

Equipping Issues and Deployment
Equipping issues are becoming more significant as our units are
preparing for deployments that require modernized equipment in the area
of operation. Units are training on equipment they are issued, some of
which is a substitute for the more modernized equipment. For example,
units are training with VRC12-series radios for missions in which
SINCGARS radios are the standard. There is a major shortfall in
Nuclear, Biological and Chemical (NBC) equipment to include
reconnaissance and decontamination systems. We must ensure that our
soldiers have the highest level of force protection by fielding them
with modernized systems.

Impact of Full-time Support (FTS) Personnel Shortage
One of our greatest challenges today is the insufficient number of
military maintenance technicians. The fielding and influx of complex
weapon systems coupled with increased mission support requirements and
deployments challenge the ARNG's sustainment abilities. Currently, the
military maintenance technician authorized fill is approximately 56
percent of fiscal year 2001 requirements. As a result, maintenance
backlogs, specifically with auxiliary equipment, delayed services and
maintenance of equipment in lower priority units, continues to
escalate. Additionally, our unit commanders continually express
concerns that the shortage of Full Time Support (FTS) has a negative
impact on unit readiness. Lack of FTS has an adverse affect on the
quality of life for our soldiers, which in turn impacts both
recruitment and retention. Further, insufficient FTS is impacting our
ability to maintain and sustain our equipment at the highest possible
state of readiness.

Tiered Resourcing
During fiscal year 2001, the ARNG continues to use a tiered
resourcing model to manage its overall readiness. By prioritizing its
limited resources, our ``First to Deploy'' forces have the capability
to meet the CINC's required arrival timelines into the theater of
operation. This resourcing strategy ensures our early deploying units
meet Defense Planning Guidance deployment criteria. Additionally, with
resource tiering, our high priority units receive the resources
necessary to meet operational readiness requirements; and lower
priority units, like our eight combat divisions, are resourced to meet
a baseline of minimal readiness goals. The impact of tiered resourcing
on later deploying forces is severe and it should be noted that ARNG
units identified as ``later deploying'' have already been deployed in
large numbers.

Missioning Army National Guard Combat Formations
``It's about readiness,'' said Chief of Staff of the Army (CSA)
General Eric K. Shinseki, announcing a new concept called ``corps
packaging'' in a Sept. 14, 2000 speech at the National Guard
Association conference.
The concept has all of the National Guard's eight combat divisions
and 15 enhanced Separate Brigades (ESBs) matched with active component
divisions at the corps level. A corps is the largest combat
organization in the Army. Corps packaging will focus Guard training on
specific potential wartime missions such as rear-area combat operations
in a major conflict in the Persian Gulf, reinforcement of U.S. forces
on the Korean peninsula or filling in for active-duty units in Germany
that might be sent to fight elsewhere.
``A year ago, we committed to integrating the force, to determining
the strength of each component, and to leveraging those
contributions,'' Shinseki said. ``We have come a long way in active
component/reserve component integration thanks to the leadership in all
components--but we are not fully there yet. We will continue our work
with the CINCs to mission our reserve component, especially our
National Guard units, for appropriate tasks in their war plans.''
The change does not make National Guard divisions a part of the
Pentagon's official war plans, which are written by the commanders in
chief, or CINCs, of combat commands. Shinseki said the next step is for
the CINCs to designate Guard units for specific missions in their war
plans.
The CSA also approved all ARNG combat maneuver forces under one of
the four Army corps. This step will greatly enhance mission focus. The
Army also supported a change to the Joint Strategic Capabilities Plan
(JSCP) that recommends the single apportionment of all 15 eSBs and the
apportionment of six ARNG divisions to a combatant command. The
Chairman, Joint Chiefs of Staff (CJCS) has directed support of the
apportionment of the ARNG divisions.
Based on Joint Strategic Planning System (JSPS) requirements, ARNG
divisions perform a number of missions in support of CINC requirements.
Generally contributing to one or more of five mission areas, ARNG
combat formations reinforce. The potential missions associated with
these areas include: Major Theater of War (MTW), MTW backfill, Small
Scale Contingencies (SSC), Base Generating Force, Theater Engagement,
Civil Support and Strategic Reserve.
The MTW mission is the mission most recognized for ARNG combat
formations. The mission can generally be broken into three areas: rear
area operations, combat operations and post-hostility operations.
ARNG divisions may also be used in forward deployed theaters to
provide security and force protection for dependents and installations.
ARNG divisions could be designated to backfill forces engaged in SSCs,
allowing those formations to flow to an MTW.
The range of missions within the SSC framework is extremely
diverse. SSCs are projected to continue in the future at the tempo of
the last 10 years.
ARNG divisions may be required to provide capabilities at
designated Warfighting Centers (WFCs). Providing for opposing forces
(OPFOR) and observer/controllers (OCs) are missions well suited for
them.

Missioning Studies
The Secretary of Defense directed study on Reserve Component
Employment 2005 (RCE-05) concluded that an ARNG division can be ready
to deploy for any combat mission in about 150 days.
The Joint Staff (J7) has been analyzing CINC shortages in the
pursuance of their MTW missions. This study substantiated the CINC's
shortfalls in Combat, Combat Support and Combat Service Support units.
The Army's ability to offset some of these critical shortfalls resides
in the unmissioned ARNG divisions.
The fiscal year 1998 Joint Strategic Capabilities Plan dual
apportions the eSBs to both Warfighting CINCs and their respective
contingency plans. The goal of The Army is to single apportion all 15
eSBs and to package them with AC Corps. The ARNG continues to
intensively manage these units through priority of resourcing,
scheduled video teleconferences, state assistance visits and ongoing
readiness analysis.

The Army National Guard (ARNG) Medical Force in the 21st Century
The ARNG Surgeon's office fosters an integrated medical readiness
team that provides innovative leadership in a dynamic environment,
ensuring that ARNG forces are ready and deployable for federal, state
and community missions.
A significant impact on ARNG medical readiness was the inception of
the Medical Advisory Council (MedAC), comprised of the 50 state and
three territory surgeons. The council provides advice, assistance and
proposes actions to the ARNG chief surgeon on current and future
medical issues affecting readiness, policy, plans, programs, resources,
training and operations of ARNG units and soldiers. Within the first
year of its charter, the council had proven itself an invaluable tool
for promoting the medical readiness of the ARNG soldier.
One of the council's early projects was the initiation of the ARNG
Medical Readiness Campaign Plan 2000. The campaign plan was a
coordinated effort between the ARNG Surgeon's Office and the MedAC to
address and resolve ARNG medical readiness issues. Initiatives included
developing a tracking system for Individual Medical Requirements (IMR),
improving medical and dental support for annual training, redesigning
the state medical Table of Distribution and Allowances (TDA), improving
the ARNG Aviation Medicine Program, enhancing medical strength in ARNG
force structure, and developing a strategy for the health care
specialist (91W) transition.
To ensure comprehensive tracking, the ARNG will use the Medical
Protection System (MEDPROS) to monitor the IMR requirements for all
ARNG soldiers. This will provide the ARNG senior leadership with a real
time automated system capable of tracking individual medical readiness.
An evolving state medical TDA redesign will heighten the focus of
our ARNG medical personnel on the future medical readiness needs of the
ARNG.
Another initiative of the MedAC was to tackle the challenge of
providing quality health care to ARNG soldiers by designating a state
aviation medicine officer and a state annual training site support
coordinator. These individuals serve as the liaison between the state
surgeon and the aviation and training communities. These designations,
seen as a milestone, ensure our soldiers are afforded the most
comprehensive and quality medical and dental support during training.
To meet the needs of tomorrow's battlefield, the MedAC sanctioned
an aggressive training strategy to ensure that all ARNG combat medical
specialists (91B) and practical nurses (91C) will meet the Army
mandated transition to being Emergency Medical Technician (EMT)
qualified (91W) by Oct. 1, 2009.
To ensure ARNG soldiers are medically ready to deploy when called
upon, the ARNG assisted with the implementation of the Federal
Strategic Health Alliance Program (FEDS-HEAL) and the HOOAH 4 HEALTH
(H4H) program. FEDS-HEAL is a coordinated effort between the ARNG, U.S.
Army Reserve (USAR) and the Veterans Administration (VA). Program
officials have a memorandum of understanding with the VA and the
Federal Occupational Health (FOH) network to assist the ARNG in
accomplishing IMR readiness requirements. Initiated as a multi-
component effort, HOOAH 4 HEALTH is a web-based, self-directed health
promotion and wellness program designed for the Reserve Components. The
program focuses on body, mind, spirit, environment, prevention and
stages of change.
Today's ARNG Medical Team remains a value-based, soldier-focused
organization. The ARNG Medical Team is committed to enhancing the
readiness of The Army and the well-being of our soldiers and their
families.

SUSTAINING THE FORCE

Operational Tempo (OPTEMPO) Funding
Resources for training are based on a model that applies costs of
operating equipment systems to a training strategy calculated in miles
or hours, depending on the system. Units expend these resources for
soldier training support, repair parts, fuel and other related costs of
training. Current ARNG separate brigades are trained to platoon level;
divisions to individual, crew, and squad level; and CS/CSS units to
unit level. The ARNG goal is to resource all combat units at the
platoon level. Overall funding for OPTEMPO must increase by $86 million
over the next five years to support this strategy; however, as more
ARNG divisional units assume command and operational roles in Bosnia,
Kosovo and elsewhere, they must train to higher levels.

Asset Redistribution
In order to mitigate aging equipment and material shortfalls, the
ARNG executes a sophisticated program of redistributing items from
excess in one unit to units in needs. The managers utilize two ARNG
automated programs to support this effort with 90 percent of the
transactions completed without item manager intervention. The ARNG has
been able to avoid millions of dollars in unnecessary purchases by
filling shortages in one state from excess in other states.

Controlled Humidity Preservation (CHP)
Another initiative undertaken by the ARNG involves the use of
Controlled Humidity Preservation (CHP) techniques. This technology has
resulted in an offset of unfinanced levels of maintenance support and
reduced the effects of moisture-induced corrosion on ARNG equipment.
The ARNG began implementation of its CHP program in 1994 to contend
with declining materiel readiness caused by equipment exposed to the
environment during periods of non-use. Since its initial
implementation, the ARNG CHP program has stabilized equipment readiness
rates in the face of increasingly scarce resources. By preserving
operational equipment under humidity controlled conditions, CHP offsets
a portion of the required maintenance manpower and OPTEMPO funding
requirement; thus resulting in a cost avoidance against the unfunded
requirements. The ARNG CHP program has validated a return on investment
of better than seven to one on the original investment.
In fiscal year 1998, the ARNG was designated as the lead agency for
CHP implementation Army-wide. It is currently available in 35
locations. Fielding plans include CHP for most ARNG states and
territories by fiscal year 2008.

Velocity Management
Velocity Management (VM) is an Army process designed to improve
logistics responsiveness both in garrison and when deployed. The
program objective is to decrease reliance on stockpiled commodities and
rely on automation, speed, and transportation to move logistics support
into the hands of soldiers as rapidly as commercial activities.
Implementation of VM has assured effective supply performance by
finding and eliminating sources of delay and unreliability in The
Army's logistics processes. States are using VM, resulting in reduced
ARNG order/ship time from a program initiation high of 98 days to 35
days, with at least 15 states posting 24 days or less every month.
Repair part receipt processing times have decreased from a high of 42
days to 15 days.

Single Stock Fund (SSF) Initiative
Single Stock Fund (SSF) is a Department of the Army (DA) business
process engineering initiative to improve and streamline The Army's
logistics and financial processes for classes of supply.
The implementation of the SSF is progressing in four phases or
milestones (MS), beginning in January 1998. Completion is scheduled for
June 2002.
MS-0, which was the preparation phase prior to implementation of
MS-1 in fiscal year 2000, included a combined MS 1 & 2 demonstration,
in which the two Kansas ARNG Centers of Excellence (COE) successfully
participated in validating the ARNG's ability to repair and stock
assets for the NMM program.
MS-1 & 2, theater and corps/installation Authorized Stockage List
(ASL) assets and Operations & Maintenance (O&M) stocks, above the
division ASL, are to be incorporated (capitalized) under AMC's
management. The Army's new credit policy goes into effect at this
point, and 18 ARNG Integrated Sustainment Maintenance (ISM) COEs will
become part of AMC's NMM program. The COEs' work will expand beyond
repairing to include stocking and shipping repaired AWCF assets to
worldwide customers. The schedule for implementation was Nov. 1, 2000
(fiscal year 2001). At this point, each United States Property and
Fiscal Office (USPFO) will begin operating an AWCF SARSS-1 and the ARNG
will be fully integrated into the SSF.
MS-3 is scheduled for implementation starting Oct. 1, 2001 (fiscal
year 2002). In preparation for SSF implementation, the ARNG plans for
two states to participate in the MS-3 implementation demonstration.
To implement SSF, the ARNG will experience required cultural,
procedural and systemic changes. Some of the ARNG processes currently
under revision to accomplish SSF transition include direct funding and
credit (greater credit to buy more and repair less); AWCF-SMA ASL
ownership (greatly reducing the amount of ARNG capital invested); and
CTASC reduction (reduction in cost and duplication of automation
assets). The ARNG directorate staff continues to work closely with DA,
AMC, other MACOMs and the states to facilitate a smooth transition to
SSF.

National Maintenance Management (NMM) in the ARNG
The ARNG has participated with other Major Commands (MACOMs) in The
Army's Integrated Sustainment Maintenance (ISM) program since its Proof
of Principal (POP) in fiscal year 1993. In this program, AC
installation General Support (GS) maintenance activities--named Centers
of Excellence (COE)--of FORSCOM, TRADOC, USAR, and ARNG Combined
Support Maintenance Shops (CSMS) and Maneuver Area Training Equipment
Sites (MATES) with support (also known as COEs), competed for component
repair work.
The final fiscal year 2000 figures from the ARNG's participation in
the ISM program are impressive. Thirty-eight states participated as
customers during the fiscal year. Those states shipped 7,632 General
Support Repairables Exchange (GSRX) components to other ARNG, USAR and
AC COEs for repair. The COEs logged more than 40,000 hours in the
repair of those components and returned 6,563 for customer use. Their
work resulted in a cost avoidance of $20.7 million for their customer
states as well as considerable productivity enhancement at customer
shops, where mechanics were freed up to work off backlogged items and
other readiness issues.
The program's growth can be appreciated by comparing this year's
cost avoidance of $20.7 million, with the $8.2 million realized in
fiscal year 1998. As the program became institutionalized in fiscal
year 2000, the ARNG conducted thousands of repairs on as many as 119
different components throughout the year--a 48-item component increase
over the previous year. Additionally, ARNG COEs performed ``Area'' work
(not part of the Regional ISM program), for other ARNG customers,
repairing 58 other types of components not part of the ISM program.
As The Army entered into its first phase of the Single Stock Fund
(SSF) program this year (specifically, restructuring), ISM as we knew
it, changed to a program named National Maintenance Management (NMM).
The NMM remains a ``Repair and Return to User'' service until AC
Installation supply assets are capitalized during the first half of
fiscal year 2001 as part of SSF transition. The NMM program will then
change to one of repair for the supply system. Eighteen ARNG COEs will
repair a total of 72 component lines during fiscal year 2001, while
continuing to work for ARNG customer states and AC installations until
they are capitalized. The ARNG continues to work closely with DA, Army
Materiel Command and other Army MACOMs, to make this transition
successful.

Depot Maintenance
The ARNG depot maintenance program is based on a ``repair and
return to user'' premise. Unlike the Active Component (AC), the ARNG
does not have a quantity of selected end items authorized for stockage
to use as immediate replacements by units when critical equipment is
returned to the depot for repair. This means ARNG equipment, necessary
to meet deployable readiness goals, returned to the depot for repair is
not replaced in the unit until the depot repairs the item.
Requirements (items sent to be repaired) in fiscal year 2001 for
the overall depot maintenance program increased by 18 percent. This
requirement increase was attributable primarily to an increase in ARNG
aviation modernization programs and increased test standards. Yet
funding for the ARNG's depot maintenance requirement slightly decreased
from 79 percent in fiscal year 2000 to 74 percent in fiscal year 2001.
Depot maintenance programs for enhanced Separate Brigades (eSBs) have
continued to be funded at 80 percent of requirements. However, funding
for the ARNG divisional units has decreased from 78 percent in fiscal
year 2000 to 70 percent in fiscal year 2001.
Previous low levels of funding resulted in a backlog of
unserviceable equipment that must be supported. A depot maintenance
backlog decreases the ARNG's capability to meet assigned materiel
readiness goals, decreases the quantities of serviceable equipment
available to support ARNG training programs, and impairs the ARNG's
capability to rapidly mobilize and deploy high priority units.
Maintenance of adequate resource levels on an annual basis is
essential to overall ARNG readiness. The ARNG depot maintenance program
has received significantly increased funding in the last three Program
Objective Memorandum (POM) cycles, but even this funding has not kept
pace with the increased use of depot level maintenance by the ARNG.
These resources will assist in AC/RC integration, compliment the
readiness of units, and serve to decrease the ARNG backlog of
unservicable equipment. Depot level maintenance of aging ARNG equipment
is the key to obtaining the highest possible level of ARNG equipment
readiness.

Readiness Sustainment Maintenance Sites (RSMS)
Five Readiness Sustainment Maintenance Sites (RSMS) have been
established by the ARNG to repair trucks, trailers, and electronic
equipment. Four sites specialize in refurbishing HMMWVs, five-ton cargo
trucks, tractors, wreckers, HEMTTs, 10-ton tractors, trailers that are
pulled by a fifth wheel, and bulldozers. The fifth site repairs night
vision devices and generators.
The decision to develop repair sites was based on past experience
which showed the ARNG saved scarce funds by completing the work in-
house and produced a quality product. A by-product of these programs
demonstrated that they were excellent recruiting and retention tools
for ARNG soldiers.
RSMS sites are located in Kansas, Mississippi, Texas, Maine, and
Oregon. All five sites performed work for the ARNG before being
selected as an RSMS.

Acquisition Career Management
The ARNG Acquisition Career Management Branch (ACMB) was
established in August 2000 to ensure that the ARNG has a trained and
qualified workforce fully integrated into the Army Acquisition
Workforce and Corps. The objective is to develop and manage the ARNG
acquisition workforce so that it is capable of supporting the ARNG and
the Active Component (AC) during peacetime, contingency operations and
mobilizations. The goal is to become a full and equal partner with the
Army Acquisition Workforce and Corps not later than fiscal year 2004.
Phase I of the partnership program (fiscal year 2000 through fiscal
year 2001) began with the establishment of the ARNG Acquisition Career
Management Branch and the determination of an initial baseline for the
ARNG Acquisition Position List (APL). The baseline results indicated
that approximately two-thirds of the possible ARNG acquisition
positions were not accounted for on the current APL. The ARNG ACMB
devised a plan to document these positions and update the Acquisition
Career Management Office (ACMO). An APL database has been established
and will be completed not later than the end of fiscal year 2001.
During Phase II (fiscal year 2002) of the program, the ARNG ACMB
will obtain and manage Title 10 authorizations for ARNG acquisition
positions.
Phase III (fiscal year 2003 through fiscal year 2004) is the final
portion of the program. During this time, the ARNG ACMB will conduct
annual data-calls to identify both civilian and military positions that
are ARNG acquisition positions for the Civilian Acquisition Priority
List (CAPL) and Military Acquisition Priority List (MAPL). Both are
currently consolidated on the APL.

RESOURCING THE FORCE

The resourcing goal of the Army National Guard (ARNG) is to secure
sufficient funding, enabling the organization to meet all statutory and
critical requirements. The ARNG also strives to provide trained and
deployable forces for The Army and Commanders in Chief (CINCs). Our
intent is to achieve parity within each Force Package for all Army
components.

Funding Priorities
The ARNG Force Support Package (FSP) units receive the highest
funding priorities. Combat Support (CS) and Combat Service Support
(CSS) units primarily comprise the ARNG's portion of the Force Support
Packages. Consistent with the National Military Strategy, these units
are doctrinally aligned to support the Major Theater War strategies.
The precise purpose of the FSP is to provide the necessary CS and CSS
units. These are found in Echelons Above Division (EAD) and in Echelons
Above Corps (EAC) tailored to support 5 1/3 Continental United States
(CONUS) divisions, one corps, one corps planning headquarters (HQ), one
theater, and one theater planning HQ.

Budget Appropriations
The ARNG is funded in three appropriations: National Guard
Personnel, Army (NGPA), Operations and Maintenance, Army National Guard
(OMNG) and Military Construction, Army National Guard (MCNG). The
fiscal year 2001 President's Budget, $6.9 billion, represents
approximately 9.7 percent of The Army's $70.8 billion budget.
The ARNG has requested an increase in funding in the fiscal year
2002 budget which supports the ARNG's Transformation and teaming effort
with the Active Component (AC), increased Operational Tempo (OPTEMPO)
and Personnel Tempo (PERSTEMPO) requirements in the 21st century.

Funding Contingency Operations
The ARNG is a true stakeholder in The Army's transformation. We
have been called upon to provide an increasing number of soldiers and
units each year to support The Army's role in contingency operations.
ARNG soldiers are primarily supporting missions in Bosnia, Kosovo and
Southwest Asia. During fiscal year 2000, the ARNG deployed 2,932
soldiers for Contingency Operations (CONOPS) missions. Projected
deployment figures for fiscal year 2001 are expected to more than
double, with an estimated 5,815 ARNG soldiers supporting these overseas
missions.
Funding for Contingency Operations is provided from Congress as
part of the Department of Defense (DOD) Overseas Contingency Operation
Transfer Fund (OCOTF). This fund is only to be used to finance
incremental costs of contingency operations when operational costs
(including personnel related costs) incurred by an activity would not
have been incurred if the operation had not been executed.
OCOTF funds are transferred directly to National Guard military pay
appropriations (NGPA). These funds are subsequently distributed to the
states for all incremental pre-mobilization, post-mobilization, and
reconstitution activities necessary to prepare for and recover from
deployed operations. While deployed, National Guard soldiers are
mobilized in a federal status and paid from active duty military pay
accounts.
Incremental military pay funding is also required for the
additional soldiers that must round out State Headquarters, State Area
Commands (STARCs) and units in an Active Duty Special Work (ADSW)
status to support the unit deployment. The majority of states deploying
are only manned on a full time basis (between 40 percent to 60 percent)
to support normal state training requirements.
The states receive active duty Operations and Maintenance funds, on
a reimbursement basis, from the Active Component Corps Force Provider
for incremental operations costs and travel while preparing for and
recovering from deployed operations.
Incremental funding received in fiscal year 2000 and requested
funding for fiscal year 2001 NGPA is shown below.

OVERSEAS CONTINGENCY OPERATIONS TRANSFER FUND (OCOTF)
[In millions]
------------------------------------------------------------------------
Fiscal
Fiscal year 2001
year 2000 \1\
------------------------------------------------------------------------
Military Pay (National Guard Pay and Allowances).. $14 $34.5
------------------------------------------------------------------------
\1\ Estimated as of September 2000 based on known missions.

KNOWLEDGE INFRASTRUCTURE

We are at the crossroads of a unique period in our history, the
Department of Defense (DOD) has developed a new corporate vision
designed to carry us well into the 21st century. Central to that
vision, and in an attempt to provoke change, DOD seeks to take
advantage of technological breakthroughs that rely on the total force,
which includes the Army National Guard (ARNG). At the core of the
Defense Reform Initiatives are principles which include streamlining
the organization and exploiting information technology.
The DOD will seek to further streamline its business processes and
operations in the upcoming Quadrennial Defense Review (QDR). The Army
has already undergone change resulting from implementing The Army
Transformation Strategy. In both cases, information technology is the
tool that enables DOD and The Army to conduct business more effectively
and efficiently. By successfully applying information technology, we
can become more effective and relevant in a period of diminishing
resources.
Consequently, the ARNG is shaping its organizational future by
capitalizing on information technologies and solutions that will play a
key role in meeting the challenges of The Army Transformation Strategy,
the Quadrennial Defense Review, and the Defense Reform Initiatives. The
Army National Guard has crafted a knowledge infrastructure campaign
plan to support the orderly transition to a Distributive Learning
network that will extend to major state facilities disbursed networks.
The ARNG seeks to achieve its dual federal/state mission in the most
effective, efficient and productive manner possible using Information
Technology solutions wherever possible.
Information plays a key role in our national defense. The
information revolution is creating a parallel revolution in military
affairs that will fundamentally change the way we fight.

Joint Vision 2020
Joint Vision 2020 examines the world and its concomitant emerging
national security challenges--challenges that span the spectrum from
humanitarian disasters to major theater wars. Joint Vision 2020
recognizes that our military forces must possess seven key
characteristics to meet these challenges in a way that provides our
National Command Authorities a variety of strategic options. These
characteristics are responsiveness, lethality, survivability,
sustainability, deployability, agility and versatility.
The Army Vision provides direction, focuses on the change process
and moves us along the path to develop forces that can dominate any
situation across the spectrum of operations. Embracing the central role
of information technology through its knowledge infrastructure efforts,
the ARNG is fully committed to taking advantage of opportunities
provided by information age concepts and technologies.
The ARNG has devoted considerable effort in the past two years to
increase high-speed Internet access. Recently, the ARNG significantly
increased the available bandwidth, or allowable data flow, to the
national communications network (NIPRNET). Three of the seven ARNG
Network (GuardNet) centralized distribution points or hub sites now
have more than triple the amount of allowable data flow. The remaining
four hub sites will be connected to the NIPRNET in the fall of 2001,
thus resulting in improved Internet access. High-speed information
access will make significant contributions to such areas as Distance
Learning (DL), electronic publications and forms, training simulation
and World Wide Web technology applications.
The ARNG decentralized video teleconferencing to the state level in
January 2001 by installing equipment that will allow states to have
local control over their video teleconferencing. Video teleconferencing
is currently centralized at the national level in Arlington, Va. States
must work through the Video Operations Center at the ARNG Readiness
Center to plan and conduct their local events.
One other significant upgrade to the ARNG's knowledge
infrastructure includes the addition of a Storage Area Network
Solution, which provides a robust, flexible and scalable option for
back-up and continuity of operations. Constant mirroring of data
provides a means to rapidly regain full capability in the event of a
major system failure.

Data Sharing and Integration
The Personnel Division of the ARNG recently installed an upgrade to
the computer software that processes the new Officer Evaluation
Reporting (OER) system. This improvement in computer software will
allow the transfer of OER images directly to the Personnel Electronic
Records Management System (PERMS) located in the ARNG Readiness Center.
Once the national-level OER analyst processes an OER, the new computer
system automatically transfers the image of the OER directly to PERMS.
When fully functional, this new transfer process will eliminate the
need for the state-level OER analyst to provide paper copies of OERs to
PERMS. This will allow PERMS and OER analysts more time to perform
analytical tasks. As a result, OERs are scanned once instead of twice,
and paper copies will be a thing of the past. This endeavor supports
the federal government's initiative to transform itself into an
electronic or paperless organization, which is a more fiscally and
environmentally sound form of government.
Other major improvements over the year include:
--Overhauling the database, which led to an overall decrease in the
time it takes an analyst to examine and process an OER.
--Automated monthly updating of OER personnel information from the
Total Army Personnel DataBase (TAPDB).
--An auxiliary program was created allowing OER national-level
analysts to correct the more common OER errors themselves
rather than taking it to the OER system programmer.
--All OER personnel were issued the TAPDB program to allow them to
instantly look up Guard personnel information rather than
having to consult the registry or contact the soldier's state.

National Officer Personnel Electronic Records Management system (PERMS)
Electronic imaging of officer records continues to remain a high
priority. Continuous improvements are being made to the system, to
include an initiative that will allow the system to internally
determine certain data fields for commonly used forms.
The Networked Attached Storage (NAS) system is the most recent
PERMS enhancement. This new release consists of new and modified
software that uses NAS as the primary repository for PERMS documents
versus optical platters (the equivalent of a giant CD-ROM.) Retrieval
applications will be written to NAS, as well as to optical platters.
The user's benefit of the NAS system is to provide faster document
retrieval and to minimize performance degradation such as fuzzy or
illegible documents.

State Enlisted Personnel Electronic Records Management System (PERMS)
Each state and territory has been provided the means to make
electronic images of enlisted members' official military personnel
files. The implementation by the states has been sporadic due to fiscal
constraints. The Department of Defense has taken an interest and is
trying to find funding to improve the functions of PERMS at the state
level since many organizations, including the Veteran' s
Administration, have a need to access enlisted records.
Enlisted PERMS at the state level remains an issue of concern. The
imagery systems purchased by the states do not interact with national
PERMS. Until funding is procured to enhance and improve PERMS at the
state level, enlisted records will continue to be difficult to access
by any entity. The states continue to rely heavily on hard copy
enlisted personnel records.

Electronic e-orders
The Federal Recognition Section, ARNG Division of Personnel, is
responsible for producing special orders that extend or change federal
recognition of an ARNG soldier's promotion, transfer, discharge, and
changes in Military Occupational Specialty (MOS) or branch. About
13,000 of these actions are processed each year. While the production
process was partially automated, it still relied on a manual
distribution process. These orders had to be copied and properly
cleared to ensure that Privacy Act provisions were not violated, and
finally distributed. This manual process was subject to human and
distribution error due to the number of times the orders were handled
before reaching their final destination.
In July 2000, electronic orders made their debut at the ARNG.
Electronic orders are images of the orders that are created at the time
the paper copy of the order is produced. A unique electronic order is
created for each individual officer listed on the order showing only
his or her social security number. These electronic orders are then
distributed to the Military Personnel Officers (MILPOs) of the 50
states, three territories and the District of Columbia who have an
officer on the order using an email distribution system. The MILPO
simply clicks on the attachment to the email to view and print the
electronic order. Electronic orders cut the time of distribution of
orders from weeks to minutes.
Improvements in the federal recognition database now allow
electronic distribution of federal recognition orders rather than the
need to copy and mail paper copies.

Software Development
Our software development effort continued expanding its use of
structured engineering methodology during fiscal year 2000. This
methodology utilizes industry standards for specifying, visualizing,
constructing, and documenting the artifacts of software systems. It
simplifies the complex process of software design by making a blueprint
for construction. From these blueprints, reusable software components/
modules can be constructed. This expansion enforces the use of business
rules and data integrity, and is platform and database independent. In
addition, work toward obtaining software Capability Maturity Model
Level 11 was initiated. This will put in place an effective means for
modeling, defining, and measuring the maturity of the software
development process.
The ARNG also began developing a single repository to store objects
and components for reuse in future application development. An
integrated process team is working on the standards and business rules
for establishing the repository and regulating the processes for
adding, deleting and modifying information contained in the repository.

Communications--Plans and Operations
During fiscal year 2000, the Network Operations Center (NOC)
located at the ARNG Readiness Center fielded several key enterprise-
wide systems to enhance security, facilitate central monitoring and
improve Internet response times. Each state and territory received new
routers designed to speed up the overall data traffic transmission via
the GuardNet. These new routers are more robust and help to minimize
the network errors that were experienced in the past.
Additionally the Computer Emergency Response Team (CERT) procured
and deployed a new Intrusion Detection System (IDS). Currently, three
Defense Information Systems Agency (DISA) Point-of-Presence (POP) are
fully configured and operational with the IDS. The CERT team also
streamlined the Information Assurance Vulnerability Assessment Message
(IAVA) reporting process, established two virtual private networks
(VPNs) and set up the Central Clothing Distribution Facility (CCDF)
firewall.
The NOC also dramatically enhanced its ability to monitor and
centrally manage GuardNet through its build-out project. This project
included the procurement and implementation of several new powerful
software tools that provide proactive monitoring of the network, reduce
possible bottlenecks, and improve bandwidth capacity planning and
trouble ticket tracking.
Additionally, the NOC upgraded eight servers that enhanced
capabilities in providing exchange and file server support. During this
past fiscal year, two Storage Area Network (SAN) devices were purchased
and deployed, which has greatly contributed to our flexibility in
meeting the users' common storage area needs.

Video Teleconferencing
The ARNG Video Operations Center has undergone several upgrades
during the last year to include an additional video conferencing
bridge, which provides the ability to coordinate and facilitate 80 site
conferences over GUARDNET XXI. We will continue to support interactive
video network conferencing for Weapons of Mass Destruction, the Unit
Clerk Course and the Personnel Sergeant's Course, involving 30 to 40
sites for each event.
The facility provided video conferencing capabilities for Texas
ARNG soldiers during their deployment to Bosnia from April to October
2000. This was the largest morale call conducted for the Texas ARNG
soldiers and their families. It was a reoccurring event with six to
eight conferences scheduled per month with eight-hour sessions. Other
ARNG units--Indiana, Oregon, Washington and Oklahoma--have also
provided video conferencing capabilities for morale calls during their
deployment to Bosnia. This video conferencing service was a great
morale booster for soldiers placed in a stressful and unfamiliar
environment.

Reserve Component Automation System (RCAS)
The Reserve Component Automation System (RCAS) is an automated
information system that provides The Army the capability to administer,
manage and mobilize Army National Guard (ARNG) and Reserve forces more
effectively. The RCAS provides an integrated capability that supports
mobilization and improves day-to-day administration and management of
Reserve and Guard forces. Fully deployed, RCAS will link approximately
10,500 Guard and Reserve units at approximately 4,000 sites located in
all 50 states, three territories and the District of Columbia.
RCAS is being developed and fielded using an incremental,
evolutionary acquisition strategy.
Increment 1 was approved for fielding in September 1996 by the
Office of the Secretary of Defense (OSD). This provided the program's
infrastructure through wide area network (WAN) inter-connectivity, COTS
office automation software, and classified capable and unclassified
workstations. Fielding of Increment 1 goes through mid fiscal year
2001, due to the funding profile.
Increment 2 was approved for fielding in January 1998 by OSD. This
introduced data servers and logistics applications. Release 2.1,
fielded in September 1998, provided logistic ``smart'' forms, Army
Training Requirements Resources System, Emergency Information System,
COTS upgrades, software encryption (e-mail), Clipboard, and Program
Automator (internal review).
Increment 3 was approved for fielding in March 2000 by OSD. This
added force authorization, security and training functionality.
Increments 4/5 is in the final stages of operational testing and
includes logistics, safety/occupational health, training and human
resources applications.
Increment 6 will add or enhance safety/occupational health,
security, force authorization, and human resources applications with
operational testing planned to begin in June 2001.
Future increments will satisfy users' requirements in the order of
priority established by the ARNG and USAR. The project is on schedule
and experiencing favorable cost variance.
More than 60 percent of the 60,065 planned function points have
been delivered to date. Full fielding is on schedule with 53,367 out of
more than 56,000 personal computers fielded (95 percent), 58 out of 94
commands completed (62 percent), and 3,440 of 3,849 (89 percent) sites
completed to date.
--Reduced time to publish orders from 60 days to two days; reduced
mailing and printing costs by 40 percent.
--Mobilized units in Bosnia using e-mail to correspond with their
home units and State Area Commands (STARC).
--E-mail provided command and control of disaster operations during
Midwest floods.
An example of RCAS improvements--a total of 1,900 ARNG soldiers
were issued orders in four days versus 30 days and were paid for their
service in record time; seven days versus 30 days.
RCAS teamed with the National Guard Distributive Training
Technology Project (DTTP) to migrate ARNG State Area Commands to an
Asynchronous Transfer Mode (ATM) backbone. The two programs are
maximizing the synergistic benefits of this arrangement and realizing
economies of scale associated with circuit cost and usage ratios.

TRAINING THE FORCE

Army National Guard (ARNG) Support to the Combat Training Centers
The ARNG participates in all of the Army's Combat Training Centers
(CTC); the National Training Center (NTC), Fort Irwin, Calif.; the
Joint Readiness Training Center (JRTC), Fort Polk, La.; the Combat
Maneuver Training Center (CMTC), Hohenfels, Germany; and the Battle
Command Training Program (BCTP), Fort Leavenworth, Kan. The Brigade
Command and Battle Staff Training (BCBST) Program is a subset of BCTP.
The Army CTC Program is divided into live simulation (NTC, JRTC, and
CMTC) and constructive simulation (BCTP and BCBST). The ARNG CTC
Program involves the scheduling of ARNG units to conduct training at
the CTCs in the following capacities: Blue (Friendly) Force (BLUFOR)
rotational units, Opposing Forces (OPFOR) augmentation units, and other
types of support based on the needs of the CTCs.
The National Training Center (NTC) is the Army's premier heavy
maneuver CTC. As large as the state of Rhode Island, the fully
instrumented NTC allows live brigade-level force-on-force exercises to
be conducted several times each year.
The ARNG continues to increase its training frequency at the NTC
with more than 25,000 ARNG soldiers conducting BLUEFOR and OPFOR
rotations in fiscal year 2000. The ARNG completes one brigade NTC
rotation each year. Rotations are allocated to the eight mechanized
infantry/armored enhanced Separate Brigades (eSBs), making the rotation
schedule once every eight years for each brigade. Additionally, the
ARNG conducts OPFOR Augmentation Unit (OAU) rotations in support of the
11th Armored Cavalry Regiment, the NTC's world class OPFOR. Ten ARNG
company-sized units deployed to the NTC in fiscal year 2000 to conduct
OAU missions, eight in support of Active Component (AC) units.
The 218th eSB, South Carolina ARNG, conducted the ARNG rotation in
fiscal year 2000 and the 256th eSB, Louisiana ARNG, will deploy to NTC
later this year.
In addition to unit-based NTC rotations, the ARNG also receives and
allocates eight NTC Leader Training Program (LTP) rotations annually.
The LTPs are six days in length, and enhance staff coordination and
combat decision-making skills. The eight LTPs are allocated to heavy
brigades that attend NTC.
The Joint Readiness Training Center (JRTC) is the light infantry
equivalent of the Army's NTC. The JRTC hosts light infantry and special
operations forces from all military components for rotations throughout
the year. The ARNG conducts one brigade rotation at the JRTC every
year. The rotations are allocated to the seven light infantry eSBs. The
76th eSB, Indiana ARNG, conducted the fiscal year 2000 JRTC rotation
and the 27th eSB, New York ARNG, is scheduled to deploy in August of
2001.
The ARNG receives and allocates three JRTC LTP rotations annually.
As with the NTC, training opportunities exist for Combat Arms, Combat
Support (CS) and Combat Service Support (CSS) units to augment BLUEFOR
and OPFOR units and to provide installation support.
The ARNG will participate in the vast majority of BCTP exercises in
the future. ARNG units, including division headquarters, brigade and
battalions, conducted BCTP rotations in support of AC units at
unprecedented levels in fiscal year 2000. The 28th Infantry Division,
Pennsylvania ARNG, participated in the V Corps BCTP Warfighter exercise
in fiscal year 2000 with more than 500 soldiers deploying to Germany
for the exercise.
Fourteen ARNG brigades conducted BCBST rotations in fiscal year
2000. The BCBST Program requires brigade staff personnel to deploy to
the Leadership Development Center at Fort Leavenworth, Kan., to conduct
a Warfighter seminar and hone mission planning skills. The brigade then
conducts a Warfighter exercise at home station using Brigade Battle
Staff simulation software exercising brigade battle staff skills.
FORSCOM/ARNG/USAR Regulation 350-2 provides for increased ARNG
participation at all CTCs and with our AC counterparts. Units can
conduct rotations as either BLUEFOR or OPFOR during both AC and ARNG
rotations at the NTC and JRTC. Operational deployments have created a
greater reliance on the ARNG to support AC units in many training
events. Participation of the ARNG in the myriad training events
showcases the maturation of reserve component integration and the
warfighting capabilities of the ARNG.
The Chief of Staff of the Army's emerging corps packages and the
ARNG's role in the Army Transformation process promises significantly
greater opportunities for ARNG participation in Active Component CTC
exercises world-wide.
Distributed Learning
Distributed Learning (DL) has emerged over the last few years at
the forefront of training, education and information access. DL is the
dominant trend in Army National Guard (ARNG) training, and it has the
potential to improve readiness above historical averages. The
communication technologies necessary to support DL are having a major
impact throughout the ARNG because they bring greater access to
information. Greater access to information will improve training and
operations.
A major objective towards improving readiness is to shift from
traditional resident training to greater reliance on DL. Making more
training locally available will reduce a significant obstacle: the
limited time a soldier has available to accomplish training. Resident
training will remain as the appropriate method for initial entry,
leadership and equipment-intensive training, since these types of
training are not suitable for DL.
The primary goal of DL in the ARNG is to improve readiness by
providing local access to training and education--anytime or anywhere.
Improving command and control and providing shared use of ARNG DL
facilities with local communities are also significant goals. The
strategy to reach these goals is based on developing and synchronizing
five essential components: hardware (network and classrooms),
courseware, staff and faculty training, support services and business
operations.
Imperative to the success of DL is GuardNet XXI. This is a robust
and dynamic telecommunication infrastructure that consolidates and
upgrades voice, video and data requirements in one economical and
highly efficient integrated network. GuardNet XXI connects the National
Guard Bureau (NGB) with State Area Commands (STARCs). The National
Guard Distributive Training Technology Project (DTTP) expands this
network through the installation of DL capable classrooms at ARNG
training sites, readiness centers and surrounding communities. As part
of Army DL classroom requirements, DTTP has fielded 207 DL classrooms
to date, with an end state approaching 400 classrooms by fiscal year
2004. Emerging missions and requirements may expand the infrastructure
beyond the current projections. Future programs will expand the
delivery options to the soldier's location whether at home, in a
vehicle, or deployed to another country.
Traditional resident courses must be redesigned for delivery via
DL. The Army Distance Learning program calls for the redesign of 525
Duty Military Occupational Skill Qualification (DMOSQ) courses over a
12-year period ending in fiscal year 2010. The Army Training and
Doctrine Command (TRADOC) is redesigning more than 30 Army MOS
producing courses per year, some of which became available during
fiscal year 2000.
In addition, the National Guard Professional Education Center (PEC)
is redesigning 70 ARNG functional courses. Eight courses have already
been redesigned and three have been conducted using DL methods. The
ARNG also provides courseware development to improve individual
sustainment, collective tasks, and emerging missions training. All
courseware produced for ARNG complies with the modularity and re-
usability guidance of the Office of the Secretary of Defense's Advanced
Distributed Learning initiative (ADL).
The ARNG DL initiative continues to expand its scope in compliance
with congressional intent. The ARNG has participated in the development
and conduct of several DL courses in the following soldier occupational
specialties and career courses: 13F--Fire Support Specialist, 13M--
Multiple Launch Rocket System (MLRS) Crewmember, 13P--MLRS Fire
Direction Specialist, 19K Advanced Noncommissioned Officer Course,
67T--UH-60 Helicopter Repairer course, 93C--Air Traffic Control
Operator, 97L--Linguist/Interpreter, the Armor Captain's Career Course,
and the First Sergeant Course.
The ARNG functional courses such as Unit Clerk, Personnel Sergeant,
Training and Mobilization Management, and Army Training and Resources
Requirements System (ATRRS) courses have been conducted using ARNG DL
assets. Information Operations training is also offered via DL.
Approximately 300 office automation courses are available to ARNG
soldiers and civilians via web-based training.
Hundreds of non-military courses spanning a multitude of
vocational, leisure, business, certification and general interest areas
are prepared for ready access by users of the DL system.
Staff and faculty must be trained to manage DL classrooms and to
deliver training to remote locations by making effective use of new
technology. The PEC is conducting a DL instructor training course. This
course provides instruction on the use of DL classroom equipment, along
with DL and adult learning theory. A course covering property and
financial management, business plans, customer service and equipment
operation is also available.
Traditional student and instructor support services are required in
the DL environment. The Army Training and Resources Requirements System
(ATTRS) has been adapted to manage DL course enrollment and reporting
for military students. The DTTP Integrated Information System (IIS) can
manage any non-National Guard students using ARNG facilities under a
shared use agreement. This system also accomplishes scheduling,
metering, billing, and course repository functions. Employment of new
training technologies and methodologies will necessitate education to
raise awareness and involvement for commanders, trainers and soldiers.
To facilitate this culture change, NGB is planning a series of DL
orientation videos to illustrate the potential of DL and to provide an
overview of roles and responsibilities.
Since DL classroom facilities are designed for multi-use
operations, the overall management and administration of the venues is
particularly important. Guidance must be provided to the STARCs to
assist them in fostering teaming relationships with other public,
private, state and federal agencies aimed at capitalizing on resources,
information and strategic partnerships. The shared use initiative
promises significant collaboration between government and non-
governmental organizations, and must have financial, contractual,
marketing as well as consultative support resources.
Appropriate business practices associated with classroom use by
non-military organizations and individuals must become standard across
the DL system. All of these imperatives are being addressed by the
ARNG.
DL is a strategic capability that will bring improvements in many
functions such as training, operations, recruiting and retention, and
the ability to add quality to our communities.
Automated Requirements Model--Guard (ARM-G)
ARM-G is a training requirements projection model designed to
provide input to ATRRS. It supports the process that projects
individual training requirements for ARNG soldiers for: professional
development, in-service DMOS training, initial entry training and
additional skill identifier training. The model also determines the
geographic locations where the training should be conducted.
Major improvements to the Army Funding Allocation Model (AFAM)/ARM-
G Modules in fiscal year 2000 included:
--Initial fielding of both the Regional Training Institute Readiness
Module and the Training Analysis on Demand (TAOD).
--Adding the ability for AFAM to read data on reservations directly
from the Army Training and Resources Requirements System, mark
the individual as selected for training, and provide cost
estimates for the training required.
--Identifying individuals attending training at PEC who are attending
training as a technician.
Planned upgrades to the AFAM/ARM-G Models in fiscal year 2002
include:
--Addition of the ability to make reservations directly in ATRRS
based on selecting an individual for training in AFAM.
--Addition of the ability for ARNG units to use TAOD to justify and
provide inputs directly to National Guard Bureau in support of
the Quarterly Army Program Review (QAPR) process.
--Modification of ARM-G to provide training and individual training
funding projections through the entire Program Objective
Memorandum (POM) process as a basis for justification of funds.
--Modification of the Regional Training Institute (RTI) Support Model
to account for all funding requirements for an RTI. The model
currently accounts only for the supplies and services piece.

The Army School System (TASS) Transition
During fiscal year 2000, the U.S. Army Training and Doctrine
Command (TRADOC) progressed to approximately 60 percent TASS
implementation. During fiscal year 2000, there were 3,459 ARNG classes
conducted with 3,348 scheduled for fiscal year 2001. Important
initiatives such as the Cross Component Resourcing Program are in the
execution phase and appear on-track. This program allows financial
reimbursement between the Reserve Components for training support
furnished. Equipment constraints supporting various programs of
instruction continue to impact TASS battalion's ability to teach
specific courses. New equipment fielding, as part of The Army
Transformation, compounds the issue.
During fiscal year 2001, a TASS strategic plan, also tied to Army
Transformation and TRADOC Transition, will be initiated. Examples of
subject matters to move TASS transition forward include: promotion of
mutual support between TASS battalions and proponent schools; a
strategy to decrease cycle-time and increase availability of courses
for soldier MOSQ; vigorous use of DL methodologies for course delivery,
and the use of multi-component organizations to meet the diverse needs
of each TASS region.
The targeted TASS strategic end state is that the component of
students and instructors will be immaterial, the quality of equipment
and facilities are equal, and programs of instruction deliver the same
tasks to the same standard such that the sources of training are
indistinguishable. To this end the Commander, TRADOC, Director, ARNG
and Chief, USAR have signed correspondence encouraging cross component
cooperation.

Information Operations Training Program
In fiscal year 2000, the ARNG developed offensive and defensive
Information Operations (IO) capabilities to support ARNG and Active
Component (AC) commanders through an approved Department of the Army
(DA) force structure. The ARNG IO capability includes IO teams, IO
tactical staff sections and IO centers. Currently, the ARNG has three
different types of IO teams: Field Support Teams, Vulnerability
Assessment Teams and Computer Emergency Response Teams (CERTs). Seven
ARNG Field Support Teams (FSTs) provide tailored offensive and
defensive IO support through a supported command's staff structure and
the military decision making process to build an information advantage
for Army commanders over potential adversaries.
Five ARNG Vulnerability Assessment Teams (VATs) provide direct IO
support to Army units and organizations in garrison, during deployments
or during exercises by conducting operational and technical assessments
to identify information processing and information system
vulnerabilities that potential adversaries could use to their
advantage.
ARNG CERTs, in conjunction with the Army Computer Emergency
Response Team at Fort Belvoir, Va., provide in-depth defensive IO
support for computer networks and information systems. ARNG CERTs also
can identify threats, assess and protect the vulnerability of deployed
computer networks against potential attacks and respond to computer
incidents that attempt to limit operations by compromising, corrupting,
or accessing information. ARNG tactical IO sections are assigned to
each of the eight ARNG divisions and 15 ARNG brigades. ARNG tactical IO
sections can operate as part of a corps, division or brigade staff to
plan, synchronize and coordinate offensive and defensive IO to support
the commander's overall intent.
The ARNG also established three IO centers: the ARNG IO Training
Development Center (IOTDC), the IO Command and Control Center and the
IO Support Center. In fiscal year 2000, the Combined Arms Center at
Fort Leavenworth, Kan. developed IO courses to develop the first Army-
wide IO training course for all Army officers. The ARNG IOTDC developed
the first and only DA course certified as satisfying the requirements
for Information Assurance Level Three training. Additionally, the ARNG
trained units to plan and conduct non-lethal, pro-active Information
Operations for peace operations in Bosnia.
By fiscal year 2002, the ARNG IO capabilities and assets will
significantly contribute to the overall Army effort in several key
areas. The ARNG will significantly increase the number of IO trained
soldiers available to support the creation and protection of an
information advantage that our battlefield leaders will need to fight
and win. The ARNG IO capabilities will also contribute significantly to
the civil support mission in the United States. ARNG defensive IO teams
(VATs and CERTs) will identify information system vulnerabilities in
each state, territory and ARNG unit that a potential adversary could
exploit. The ARNG defensive IO capabilities will enhance the overall
effort to avoid an ``electronic Pearl Harbor'' and preserve the
information advantage held by the United States.

Funding of New and Displaced Equipment Training in Fiscal Year 2000 and
Fiscal Year 2002
A total of $12.1 million was funded and distributed to the ARNG in
support of new and displaced equipment fieldings. These funds supported
a total of 27 system fieldings:
SINCGARS ASIP (Digital Tactical Radio)
AFATDS (Advanced Field Artillery Tactical Data System)
FAADC\2\I (Forward Area Air Defense Command, Control and
Intelligence)
AN/PSG-9 FED (Forward Entry Device)
CSWP (Crush Screen Wash Plant)
M53500 5-60KW (Medium Smoke Generator)
M56 (Motorized Smoke Generator)
SENTINEL RADAR-AN/TPQ-64 (Air Defense Radar)
UH-60L (Black Hawk Helicopter)
M109A6 Paladin (155 Self-Propelled Artillery System)
M2 BFV (Bradley Fighting Vehicle)
M60 AVLB (Armored Vehicle Launched Bridge)
M270 MLRS (Multiple Launch Rocket System)
MK19 (Grenade Machine Gun)
M240B (Medium Machine Gun)
FMTV (Family of Medium Tactical Vehicles)
AN/PVS-7D (Night Vision Goggles)
M16A4 (Personal Weapon)
M4 Carbine (Personal Weapon)
M1A1 (Abrams Tank)
PLS with Engineer Mission Modules (Palletized Load System)
HETS (Heavy Equipment Transporter System)
M915A3 (Tractor Trailer)
ATLAS (All Terrain Lifting Articulated System)
20-Ton Dump Truck
CSSCS (Combat Service Support Control System)
AN/TSQ-179 (Jstars Target Acquisition Subsystem)
HYEX Type II (Hydraulic Excavator)
In fiscal year 2002, validated new equipment training and displaced
equipment training funding requirements totaled $10.8 million while
critical requirements totaled $8.4 million. However, only $2 million of
critical requirements are funded, leaving a $6.3 million Unfunded
Requirement (UFR).
The following systems and states are affected by the funding
shortfall:

------------------------------------------------------------------------
System States Affected
------------------------------------------------------------------------
Advanced Field Artillery Tactical Data SD, TN, WI, CO, GA, KS, KY,
System (AFTADS). MI
Multiple Launch Rocket System (MLRS)...... AL, TX, CO
SINCGARS Tactical Radio................... VA, MD, MA, PA, WV, CA, NY,
IA, MN, WI, CO, IL, VT, NJ,
CT, DE, RI, TX
Sentinel Radar............................ FL, OH
Forward Area Air Defense Command and NM, FL
Control System (FAADC\2\I).
Firefinder Radar.......................... FL, OH
------------------------------------------------------------------------

The UFR will affect the preparation for the First Digitized Corps
(FDC) exercise and the ability for the ARNG to demonstrate digitization
capability and capacity. Without funds for required new equipment
training and displaced equipment training, many states will not be able
to receive critical equipment, having a significant impact on their
readiness.

Training Support XXI/Tiger XXI Initiative
Congress mandated that at least 5,000 soldiers from the Active
Component (AC) provide training support to the ARNG and USAR to reduce
post-mobilization training time. Congress further mandated that the
ARNG maximize use of Training Aids, Devices, Simulations, and
Simulators (TADSS). While Training Support (TS) XXI focuses on lane and
gunnery evaluations in the live environment, Training Investment in
Guard Readiness (TIGER) XXI provides strategies, methodologies and
infrastructure to enable units to train in the virtual and constructive
environments.
This infrastructure includes Commanders' Operations and Training
Assistants (COTA) who can recommend strategies and methodologies for
``best use'' of TADSS and also technical support personnel who actually
operate the various devices. These personnel work with unit commanders
to coordinate TS XXI Observer-Controller/Trainer (OC/T) support for
training in virtual maneuver and constructive battle staff training.
TIGER XXI methodology follows a phased learning model tailored for
the unique environment of ARNG units. There are four training pillars:
individual, battle staff, small unit collective and logistics training.
Each of these pillars has a systemic, progressive, and measurable
methodology. By integrating live, virtual and constructive training
devices and events with quality OC/T support, individuals and units are
able to learn those tasks and processes needed for successful
execution.

QUALITY INSTALLATIONS

Installations Vision
The installations vision for the Army National Guard (ARNG) is to
capitalize on the geographical dispersion of our community-based
installations and training sites to facilitate communications,
operations, training and equipment sustainment. The ARNG is committed
to providing state-of-the-art installations and training sites from
which to deploy the force.
To implement this vision, the ARNG has a comprehensive program
involving education, real property development planning, computerized
maintenance management, energy management, 21st century technologies,
and sound leadership decisions.

Planning Resource for Infrastructure Development and Evaluation (PRIDE)
Software Implementation
Planning Resource for Infrastructure Development and Evaluation
(PRIDE) is the National Guard Bureau's (NGB) guide for moving its
facility information systems forward from the 20th to the 21st century.
Volunteers from the ARNG Installations Division and state action
officers developed a system that provides a more robust information
base for decision support to the ARNG infrastructure community. Phase 1
of the PRIDE implementation focused on project management and inventory
of the ARNG facilities. All states and entities were on line by the end
of fiscal year 2000.
In fiscal year 2002, training courses will be developed and
conducted for the maintenance management and computer-aided design
(CAD) integrator modules of the software. Training in these modules
will complete implementation of the full functionality of the PRIDE
software.

Facilities Overview
The ARNG operates 3,174 readiness centers in 2,679 communities in
50 states, three territories and the District of Columbia. In addition,
the ARNG federally supports the operation and maintenance of more than
19,000 training, aviation and logistical facilities located throughout
the nation. The sustainment of modern and well-maintained facilities is
a key component of an efficient ARNG organization.
Acquisition of land in Minnesota and Louisiana during fiscal year
2000 has helped resolve shortfalls in training lands available to ARNG
soldiers. These acquisitions have reduced the amount of time soldiers
spend on the road traveling to alternate training sites, thus giving
leaders more time to train their soldiers in the field. This, coupled
with new training areas which can accommodate larger scale unit
training, will result in enhanced readiness in units.
A portion of the Twin Cities Army Ammunition Plant was reassigned
to the Minnesota Army National Guard (MNARNG) during fiscal year 2000.
Prior to this 1,245 acre acquisition, the MNARNG had a significant
training area shortfall for Mechanized Infantry/Rifle units to conduct
adequate maneuver training in the Twin Cities area. Existing local
training sites limited training to squad and platoon-level activities.
The additional land significantly expands training opportunities for
leaders to conduct multiple-unit maneuvers during weekend drills and
annual training.
Louisiana Army National Guard (LAARNG) soldiers will also benefit
from expanded training areas. Part of the Louisiana Army Ammunition
Plant was reassigned to the ARNG in fiscal year 2000. The LAARNG had a
significant training area shortfall for the 1083rd Transportation
Company prior to this 12,896-acre acquisition. Consisting of 96 Heavy
Equipment Transporter Systems (HETS), 40 support vehicles and 300
soldiers, the unit was restricted on the types of training it could
accomplish with the limited amount of land available. The additional
acreage has helped to resolve the shortfall.

Facility Planning Fiscal Year 2000/02
As an Army partner, one of the ARNG's strategies is to follow a
rigorous and disciplined process using Army standards to establish
priorities for military construction requirements. One method of
implementing that strategy is the Real Property Development Plan
(RPDP). The initiative is a five-year program that began in fiscal year
1997 and ends in fiscal year 2001. The State RPDP is a new concept in
master planning designed to provide a comprehensive tool the states can
use to focus and prioritize their installation resources. This plan
will provide a method for assessing existing conditions of real
property assets statewide and will help establish the strategic
development plan for long-term management of facilities. RPDP was
adopted by an additional 12 states in fiscal year 2000, bringing the
total to 42. By the end of 2001, all 50 states, three territories and
the District of Columbia will have begun their Real Property
Development Plans. This planning tool is providing the states with a
decision-making guide for long-range acquisition, utilization and
development of real property.
The ARNG refined its strategy in fiscal year 2000 by integrating
our specific facility needs with the Standard Army Systems. This will
give the Department of the Army (DA) a more accurate view of what type
and how many facilities the ARNG needs to successfully complete its
missions. The ARNG's plan is to complete incorporating our facility
needs into the Standard Army Systems by the end of 2002.

Military Construction (MILCON) during Fiscal Year 2000/Fiscal Year 2002
The ARNG requested $16 million for military construction (MILCON)
during fiscal year 2000. This request proposed spending $11.1 million
for five projects, $0.8 million for unspecified minor construction and
$4.1 million for planning and design. The ARNG received an
appropriation of $237.4 million for an additional 17 projects at $194.3
million, a total of $16.4 million in planning and design and $15.6
million in unspecified minor construction. Congress also called for a
general rescission on military construction funds for all services. The
ARNG portion of the cut was $1.2 million from the fiscal year 2000
appropriation.
The budget request for fiscal year 2002 outlines spending $75.4
million for military construction, Army National Guard (MCNG). This
includes $61.8 million for nine major construction projects, $3.7
million for unspecified minor construction and $9.8 million for
planning and design. Of this amount, $13 million will be set aside for
sustaining and stationing requirements in Phase I of the Army Division
Redesign Study (ADRS).
Although the ARNG received a proportional share of the limited
MILCON dollars, MCNG's fiscal year 2002 unfinanced requirements are
$542 million. This equates to 43 additional projects. Thirty-four of
these are critical to the Army's Facility Strategy: 14 readiness
centers, 10 military education facilities and 10 surface maintenance
facilities. Only when this strategy is funded will the Army National
Guard escape from its current unsatisfactory rating in infrastructure.
This rating means that ARNG facilities are significantly impairing the
mission performance of ARNG units, because its soldiers and civilians
are working and training in substandard facilities. At the current rate
of funding, it would take more than 300 years to revitalize existing
facilities.

Installations Status Report--Infrastructure (ISR I) Program
The Army has developed a management system to track the conditions
and costs associated with improvements to the infrastructure. This
information is being used to greatly enhance The Army's ability to
explain current funding levels, project operations and maintenance
costs and predict future construction projects needed. The system
allows The Army to get a better handle on cost projections, and enables
Congress to justify increasing expenditures.
The quantity and quality of ARNG facilities are determined by input
from each state and entered into the Army model. In fiscal year 2000,
the Army's Installation Status Report results measured a facility
deficit of $20 billion for the ARNG. In addition, a $6.7 billion repair
backlog resulting from years of underfunding was also identified.
In fiscal year 2000, the ARNG in the states operated about 150
million square feet, with a plant replacement value of $18.9 billion.
The ARNG requires modern facilities that are estimated to cost $19
billion to construct, according to the Army's Installation Status
Report. Facilities sustainment for fiscal year 2000 was funded at about
78 percent, which means facilities continue to deteriorate and the
repair backlog continues to increase.

Energy Conservation Investment Program (ECIP)
The Energy Conservation Investment Program (ECIP) provides MILCON
funding for maintenance and renewable energy projects totaling more
than $500,000. These will enhance energy performance while also
repairing facilities. The ARNG received its first ECIP project award
for facility energy improvements in September 2000. The $704,000 award
will be used for the Arkansas ARNG headquarters in Little Rock, Ark.
The Department of the Army (DA) has approved two more ECIP projects
for the ARNG, scheduled for fiscal year 2002. A facility energy
improvements construction project totaling $790,000 is scheduled for
Gowen Field, Idaho and a construction backup project is scheduled for
Camp William, Utah. The Camp William project includes installation of a
650 kilowatt wind turbine and other energy improvements at a cost of
$752,000.

Environmental Program
The ARNG Environmental Program emphasizes responsible stewardship
of the land and facilities managed by the ARNG and compliance with
environmental laws and regulations. This is accomplished by promoting
The Army's environmental goals through ARNG environmental compliance,
conservation and restoration efforts nationwide.
The ARNG environmental compliance program far exceeded expectations
in fiscal year 2000 by not only reducing open enforcement actions, but
also significantly decreasing our new enforcement actions over previous
years. Through the assistance of an ARNG cooperative and responsive
process action team, we reduced open enforcement actions to three.
Through increased visibility by the ARNG leadership and state
environmental program managers, the ARNG reduced new enforcement
actions from 33 in 1999 to 11 in 2000, which represents a 200 percent
improvement. These actions surpassed the Assistant Chief of Staff for
Installations Management's (ACSIM's) goals for reduction of new and
open enforcement actions.
The ARNG Environmental Division identified an excessive number of
storm water permits, which may have been issued erroneously, through
increased scrutiny and analysis of the Environmental Quality Report. In
many cases, these permits were issued to armories, which should have
qualified for a national defense exemption. The Environmental Programs
Division is providing guidance to ensure that environmental managers in
the states do not obtain permits when they are not required by law to
do so, and to terminate those permits deemed unnecessary. The reduction
in the number of unnecessary permits will allow the environmental
managers in the states to decrease the potential for violations, time
and effort for permit management and reporting, as well as reduce the
extra duties, training and responsibilities of facility and operations
personnel that are required to support these permits.
The ARNG developed an extensive and proactive Environmental
Compliance Assessment System (ECAS) that identifies compliance
enforcement action challenges prior to regulator enforcement and
assists in lowering the number of new enforcement actions. The ECAS
also identifies gaps in policy and guidance at the MACOM level. Through
this process, we have cooperatively developed more responsible
environmental policy to support the sustainment of the ARNG mission
capabilities.
An example of this cooperative development is the ARNG policy for
use and storage of mobile fuel tankers. This policy is a combined
effort of the logistical, installations and environmental policy
managers to diminish the threat of fuel spills at ARNG facilities. The
policy will decrease the potential for spills, be considerably more
economical, as well as provide needed tactical fuel to accomplish unit
training.
The ARNG is working with The Army to develop guidance for
environmental and explosives safety management on active and inactive
ranges. This is a direct result of an Environmental Protection Agency
(EPA) administrative order at the Massachusetts Military Reservation
(MMR) for violation of the Safe Drinking Water Act. Cooperative efforts
will ensure that ARNG soldiers receive realistic training while also
complying with environmental regulations.
The ARNG completed three Programmatic Environmental Assessments for
the UH-60 Blackhawk, Paladin, and Multiple Launch Rocket System (MLRS).
The programmatic means of addressing the National Environmental Policy
Act (NEPA) requirements is a more efficient way to support state
requirements. We are continuing to use programmatic NEPA documents to
field major systems such as 50-ton rock crushers. The Army is
developing a Programmatic Environmental Impact Statement for The Army
Transformation, which the ARNG will supplement in support of the ARNG
Transformation.
The development and implementation of our 91 training area
Integrated Natural Resources Management Plans (INRMP) and our state
Integrated Cultural Resource Management Plans (ICRMP) will enhance ARNG
stewardship of our training lands while enabling us to fully support
the training mission. The result of this monumental effort is an
increase in the number of endangered species and their habitat
identified on our training lands. However, as we discover these
environmentally sensitive areas we are also able to address how to
manage the areas with a minimum of impact on the overall training
mission.
Native American issues are a major feature of ARNG's ICRMPs. Each
installation works closely with federally recognized Indian tribes on a
government to government basis. In addition, the ARNG is implementing
initiatives with intertribal organizations such as the National
Congress of American Indians and the United South and Eastern Tribes.
As an aid to historic preservation and good stewardship, each of the 51
ICRMPs provides standard procedures and other guidance for installation
staff, who manage tens of thousands of archaeological sites and
historic structures on our training lands. The ARNG provides cultural
resources training on a regional basis and assists individual
installations to provide local awareness training and public outreach.
ARNG Cultural Resources teams are also developing maintenance and
treatment plans for the ARNG's historical buildings, which will enhance
both our stewardship and readiness capabilities.
To assist in managing the environmental information that is
gathered through these various initiatives, we have fielded and
implemented Geographic Information System (GIS) capabilities to all 50
states, three territories and the District of Columbia. ARNG program
managers will also be able to access GIS technology at the headquarters
level to advise and assist the training sites.

Restoration
The National Guard Bureau (NGB) is tasked to execute the Army's
Installation Restoration Program for federally owned ARNG facilities.
In addition, state-owned facilities are also encouraged to evaluate
their facilities for past practice contamination. The ARNG restoration
program is responsible for the inventory and data collection for all
closed and transferred military ranges within the ARNG.
During fiscal year 2000, the ARNG completed 20 site-specific
preliminary assessments for environmental concerns and inspected many
other sites. Environmental restoration projects conducted included the
remedial action at the Seabee compound and the bio-remediation of JP4
and solvent contaminated soils at Los Alamitos, Calif. and the flagging
of unexploded ordnance and bio-remediation of trinitortoluene (TNT)
contaminated soils and groundwater at Camp Navajo, Ariz. At Camp
Crowder, Mo., we completed a drainage improvement project to reduce
infiltration of contamination from the engine test area pit. The engine
test area was listed on the National Priorities List as part of the
Pools Prairie Superfund Site in fiscal year 2000.
The ARNG is continuing to deal with potential funding issues
involving state owned or privately owned ranges. Many closed or
transferred ARNG ranges are state owned or privately owned but are
supported with federal funding due to their contribution to The Army's
mission. This situation may prevent Environmental Restoration, Army
(ER,A) funding based on The Army's final policy determination. If
precluded from receipt of ER,A funding, cleanup requirements must be
funded from ARNG operations and maintenance funds. The Army Corps of
Engineers policy also precludes use of formerly used defense site
funding for transferred ranges on property that was not under
Department of Defense (DOD) control during the range usage. For
example, funds were denied in a North Helena Valley, Mont. project
because the munitions fired were federally procured and associated
training was in support of the federal mission. The denial resulted
because the training occurred on privately owned land.
For fiscal year 2002, the ARNG will continue to work toward the
closure of additional restoration sites, continued evaluation of state
owned property, and the closure of all installation restoration program
sites at Camp Navajo with the exception of the open burn/open
detonation area. In fiscal year 2002, implementation of a cost sharing
plan for the Massachusetts Military Reservation Installation
Restoration Program will begin. This cost sharing plan will result in a
significant cost reduction for the Army ER,A budget, as well as
streamline management of this ARNG program.
The Environmental Division continues to provide leadership, policy
and resources to the states, territories and the District of Columbia
to allow ARNG units to train effectively to meet their national defense
mission while ensuring compliance with environmental regulations and
stewardship of our natural resources.

QUALITY OF LIFE

The military today is being utilized in a much different way than
it was just 10 years ago. Our military is a million members smaller
than it was in 1990. Without the reserve components, our military could
not accomplish its missions. As a result of the dramatic changes in our
utilization, we have to develop our programs that address the changing
needs of our members, their families, and their employers. Those
programs are essential to help soldiers maintain a balance among three
facets in their lives--family commitments, work and military
requirements--to ensure readiness and maintain unit strength.

Employer Support to the Guard and Reserve (ESGR)
The mission of the Employer Support of the Guard and Reserve (ESGR)
is to obtain employer and community support to ensure the availability
and readiness of Reserve forces. This support is especially essential
today since the Operational Tempo (OPTEMPO) of The Army is now 20 times
higher than it was during the Cold War. For example, on any given day,
35,000 National Guard and Reserve troops are serving on active duty in
77 countries throughout the world. Today more than half--54 percent--of
today's military forces are in the National Guard or Reserve forces.
There are several other reasons that the mission of ESGR is so
important to our National Guard and Reserve forces. Today, there are
fewer and fewer people in society who have any kind of military
background. For example, an astounding 94 percent of people between the
ages of 18-65 have no military experience. Little wonder that as a
result, there is a lack of employer appreciation for the skills and
attributes of employees in the Guard or Reserve.
To counteract this enormous knowledge gap, ESGR has developed a
number of programs to educate employers about the duties their citizen
soldiers must live up to and the hardships they must endure as members
of the military. Programs like ``Boss Lift'' are working not only to
educate but also to inspire.
One Chief Executive Officer (CEO) traveled to Bosnia to visit an
employee who was serving on a deployment. ``At the time, I knew what
our corporate needs were, but I didn't have the knowledge base, or the
understanding of what the military mission was,'' said the CEO. ``I got
that in Bosnia.'' He put his thoughts on paper when he wrote a letter
after the trip to Col. Tony Harriman, the commander of the 3rd Armored
Cavalry Regiment. ``What you and all the troops are providing to the
world with your presence in Bosnia will have an effect on the world for
generations to come,'' he wrote.
ESGR has also developed programs to reward and recognize employers
who take the time to gain understanding about their citizen soldiers
and who support their employees in fulfilling their military duties.
Standardization of Deployment Rotations
In March of 2000, The Army committed to standardizing the length of
time soldiers spend on certain deployments, regardless if they are
members of the active or reserve components. The action applies to
tours in support of Operations Other Than War (OOTW) and Small Scale
Contingencies (SSC).
Under the new, unifying measure, units will be employed for a
maximum of 179 days performing their assigned mission in the area of
operations. Normal pre-employment training, either in or outside of the
United States, does not count toward that 179-day figure.
The action applies to all units employed in support of an OOTW or
SSC, whether they perform their duty in Germany, Hungary or Kosovo.
Also, in cases such as Southwest Asia, where the tours have been
averaging 120 days, this does not mean those tours will lengthen in
order to extend them to 179 days. Reserve deployments in the Balkans
previously averaged 210 to 230 days, including transition time, while
active-duty soldiers spent, on average, 179-210 days.

Pay and Benefits
Nearly 1.4 million members of the National Guard and Reserve will
benefit significantly from the $309.9 billion Fiscal Year 2001 National
Defense Authorization Act (NDAA). Starting Jan. 1, Guard and Reserve
members will see a 3.7 percent increase in drill and annual training
pay, and numerous other incentives and benefits that the Department of
Defense believes will keep them in uniform longer and attract more
young people to join the force.
National Guard and Reserve members can now receive credit for up to
90 points each year for inactive duty training, completion of
correspondence courses and membership in the Guard or Reserve. This is
a 15-point-per-year increase over the previous limit. It will also
allow Guard and Reserve members who perform additional drills and
complete additional study through correspondence courses to receive
credit for their extra effort, which will be used to calculate their
Reserve retired pay. Also included are improvements in special pays and
benefits.

National Guard Family Readiness Program
The recent name change from Family Support to Family Readiness
Program more accurately reflects the importance of organized family
groups to the readiness of individual soldiers and their units. We
enlist soldiers but ``reenlist families''. Their understanding of the
Guard is critical to unit retention. Family Readiness groups
communicate the obligations of service members and help families
determine what they need to be prepared for training and deployments.
The National Guard Family Readiness Program is an extensive
infrastructure and national network that links 2,679 communities
nationwide. The full-time State Family Readiness Program coordinators
work with military points of contact and volunteers at every
organizational level. They promote family member volunteerism, family
readiness groups and facilitate family readiness training throughout
the National Guard.
During periods of mobilization and as situations dictate,
approximately 3,000 ARNG strength maintenance personnel assist Family
Programs in Family Assistance Center operations throughout the country.
They and members of the Family Readiness Program network provide basic
family readiness training and counseling in preparation for the
deployment of military family members. They provide information for
referrals and follow-up services, emergency assistance, crisis
intervention, reunion planning and activities and youth outreach
programs for children of National Guard members.
Video teleconferencing (VTC) for soldiers and their families during
the 49th Armored Division's rotation in Bosnia is just one example of
how families can get together and use technology to reach across six
time zones and 5,000 miles to their service members. These
teleconferences, in addition to email capabilities and telephone
access, served to assure participants of their soldier's well-being but
also helped to educate family members. ``I think for the first time I
realized where he was and what he was doing, and the sacrifices that
our soldiers make for this country,'' said a mother-in-law after
sitting in on a VTC from Bosnia. ``I appreciate what he's doing and
what everyone is doing so much.''
Family Readiness Groups work for all services. A key Army National
Guard quality of life goal is to provide assistance to all military
families, regardless of branch or component, who find themselves beyond
the support capability of active duty military facilities or their home
units.
In 2001, the ARNG will come a full partner in the Army Morale,
Welfare and Recreation program. This will provide ARNG soldiers with
added recreational and social opportunities previously available only
at active installations.

Medical Programs
TRICARE Prime Remote was implemented Oct. 1, 1999. It offers the
TRICARE Prime benefit through managed care support contractors for
active duty service members with duty assignments in remote locations.
In four of the 13 TRICARE regions, TRICARE Prime Remote provides the
remote benefit to active duty family members as well. The fiscal year
2001 budget request includes provisions for expanding the remote
benefit to active duty families nationwide. This is especially helpful
for families of mobilized Guard members who do not have easy access to
military medical facilities.
Dental benefits expanded to include Reserve and National Guard
families as beneficiaries for the new TRICARE Dental Program (TDP)
beginning Feb. 1, 2001 under Department of Defense policy guidelines.
This will significantly expand the number of Reserve forces personnel
eligible for TDP. One important new feature will allow Reserve and
National Guard members called to active duty in support of contingency
operations to sign their family members up for the TDP by excluding
them from the mandatory enrollment period. The new policy guidelines
will significantly improve the readiness of Reserve force families and
be a tremendous benefit to National Guard and Reserve personnel.
Other improvements to TRICARE benefits, including changes to
retiree medical and dental programs, pharmacy benefits, and outreach
efforts such as internet web site for information and phone in
assistance for billing questions all add up to better service for all
military members and their families.

Senator Stevens. Senator Weaver.

STATEMENT OF MAJOR GENERAL PAUL A. WEAVER, JR.,
DIRECTOR, AIR NATIONAL GUARD, DEPARTMENT OF
THE AIR FORCE

General Weaver. Mr. Chairman, I am so honored to be with
you here this morning, as I get ready to come to a close of a
35-year military career. I am also honored to have two of my
children here this morning to prove to them that I actually do
go to work and to be here. This is their civics lesson for the
day, and they got a day off from school.
Senator Stevens. Introduce us to them.
General Weaver. Behind me are our daughters, Kathy Lee's
and our daughters, MacKenzie and Jenna.
Senator Stevens. Thank you very much, General.
General Weaver. They will not forgive me for that.
Senator Stevens. Oh yes, they will.
General Weaver. Thank you, Mr. Chairman, sir. Mr. Chairman
and distinguished Senators, on behalf of over 106,000 proud
women and men of the Air National Guard, I would like to thank
you for the opportunity, the great opportunity to appear before
this committee. Over the last decade, with the generous support
of this body, the Air National Guard has significantly changed
in capability and focus as our nation's most relevant, most
ready, and accessible Reserve component in the Department of
Defense today.

OPERATIONS TEMPO

The Air National Guard operations tempo is a full 1,000
percent greater than 1990 figures. Our support to all Air Force
contingency operations over the last decade has increased from
24 to 34 percent of the total force aircraft employed.
Today the number of active duty days per Air National Guard
member has increased greatly, all based on the exceptional
volunteerism of our dedicated citizen airmen, and without
reliance on a presidential Reserve call-up.

EXPEDITIONARY AEROSPACE FORCE

In cycle 1, to give you an example of the Expeditionary
Aerospace Force deployments, the Air National Guard contributed
25,000 of our people towards the total force requirement. Over
the last 15 months, the Air National Guard contributed 42
percent of the C-130 intratheater lift, 22 percent of our KC-
135 steady state air refueling the Expeditionary Aerospace
Force (EAF) requirements, and 35 of the Air National Guard's 37
combat-coded units were aligned during cycle 1 rotations. Never
in the history of our Air National Guard have we done that.
The Air National Guard contributions continue. The total
force will even be greater in EAF cycle 2, when every combat-
coded Air National Guard fighter unit is aligned to
participate, including eight Air Guard precision-guided
munitions, or PGM-equipped units. In other words, Mr. Chairman,
every 30 months, half of the Air National Guard is deployed
doing real-world work in conjunction with our total force
brethren.

MODERNIZATION

With the fielding of the Air National Guard's number 1
combat Air Force modernization priority, precision-guided
munitions targeting pods, the Air National Guard was able to
provide 100 percent of the strike and air superiority fighters
in the EAF-9 alone. We are more relevant to the fight than ever
before in our history, and I thank this body for making that
happen.

F-16

We still need about 96 more pods to fill our requirements
for our Air National Guard Block 25's, 30's, and 32 F-16's, to
give them the same capability as our Air Force's Block 40 and
42 F-16's, but our fighters certainly do not get the job done
and get home safely without the efforts of our stalwart tanker
community. Increasingly, our Air National Guard modernization
focus has shifted to necessary improvements in our KC-135
fleet. We strongly support the acceleration of the purchase of
the ``D'' model conversion kits and the production of a follow-
on tanker.

KC-135

We need to seriously look at expediting the KC-X, or the
KC, commercial off-the-shelf (COTS) derivative. We are adding
to this tanker community with the Sioux City, Iowa, conversion
from F-16's to KC-135's, and have begun to accelerate our
planning efforts to assure the necessary planning projects are
funded in a timely manner.

C-17

In addition, we are striving to move the C-17 conversion
forward at Jackson, Mississippi, replacing the aging and
retiring C-141's. We are laying the groundwork for the
necessary infrastructure and support requirements, and continue
to work for the bed-down in fiscal year 2004. We strongly
support the addition of five C-17's to support the much-needed
airlift requirements of our military forces.

RETENTION

This unprecedented contribution of our Air National Guard
has occurred at a time when we have reduced our end-strength
numbers to 1984 levels. That means we are asking our men and
women to do more with less, and they are stepping up soundly to
the task, but I am not surprised, nor should we be. Our Air
National Guard retention has traditionally been the highest,
the highest of any component of any service in the Department
of Defense, and that is where it remains today, at well over 90
percent.
With your help, we have succeeded in our efforts to offer
aviator continuation pay to eligible AGR pilots who agree to
stay with us for 3 years or more. During the last year, we had
a better than 90 percent take rate. We are now looking for
appropriate incentive and bonuses for our Traditional Guard air
crew and our enlisted air crew members who deserve full 30-day
compensation for their extensive participation levels.
While incentives, pay structures, and bonuses help us to
retain our valuable people, they are also significantly
enhancing our recruiting ability. With your assistance, just
last year alone, for advertising funds, we were able to
implement our first-ever targeted media advertising campaign,
to include TV, radio, and billboard ads and regional and
national periodicals, and I am sure you have seen them on some
of our more popular sports events. Complemented by the 65
additional recruiter authorizations that you were able to give
and fund for us, we were able to gain accessions in areas
previously untapped.

FAMILY SUPPORT

Last year's focus on the Year of the Family, coupled with a
sustained EAF rotations, brought to the forefront the need for
full-time, dedicated family readiness and support. The Air
Force currently allocates through their Family Support Center
and operating budgets of about $125 per member. The Air Force
Reserve, an honorable $58 per member. Last year, the Air
National Guard took $750,000 out of hide to provide $7 per
member allocation, using additional duty staff or unpaid,
overburdened family member unit volunteers.
This is clearly not enough. The Air National Guard proposes
supporting a full-time contract family readiness coordinator,
much like the Air Force Reserve, and we truly need your
assistance to jump-start this worthy effort. This past January,
we began to focus on critical enablers and silent partners, the
employers of our National Guard men and women.
The year 2001 has been designated the Year of the Employer
Reconnecting with America. During the year, we are partnering
with the National Committee for Employer Support of the Guard
and Reserve to ensure our members and employers remain
satisfied with our shared people and their dedicated commitment
to continued military service.

PREPARED STATEMENT

Mr. Chairman, we are confident that the men and women of
our great Air National Guard will meet the challenges set
before us, and I thank you on behalf of all of them. We are
strong and relevant today because of you. All of you and the
proud men and women of the Air National Guard have made it so.
Thank you, sir.
[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL PAUL A. WEAVER, JR.

Mr. Chairman and members of the committee. Thank you for the
opportunity to appear before this committee--on behalf of the 108,000
proud men and women of the Air National Guard--to share the successes
and challenges facing us over the next year and beyond. This new
century has generated for many, including the Air National Guard, a
time and opportunity to contemplate, plan and prepare for the future
needs of our nation, state's, and community's defense requirements.
Over 217 years ago, a citizen soldier and our first Commander in
Chief--George Washington, led a group of politicians, warriors,
strategists and citizens as they debated the design of our nation's
necessary military establishment.
Today, our nation contemplates fundamental changes or shifts in the
way we continue to ``ensure domestic tranquillity'' and ``provide for
the common defense'' through a variety of national defense reviews.
There are many similarities in context between the national defense
debates of Washington's time and--like it or not--the hand we've been
dealt for our future security environment. That hand demands today, as
it did then, a strong focus on expeditionary operations and increased
reliance on the citizen-warrior to support a dramatically downsized
active component and a world characterized by multiple small scale
contingencies and transnational threats.
With only six percent of the nation's population under 60 who have
military experience, Guard warriors are increasingly the military man
or woman in uniform that most American's see. In fact, these proud Air
Guard men and women are more and more the military presence seen abroad
in support of CINC and service requirements. Daily, they are
``shaping'' strategic environments while demonstrating to others the
vital role an individual citizen plays in our country's military
defense.
It's people like Maj. Ray Lynott of the 144th Fighter Wing in
Fresno, who flew the F-117 in the Persian Gulf nearly a decade ago
while on active duty. Today, he conducts air-superiority patrols over
southern Iraq as a member of the California Air National Guard. Over a
cup of coffee or a backyard barbecue, Maj. Lynott and 108,000 other Air
Guard warriors bring the value of Aerospace power to Hometown America.
Like Ray, they tell America that, ``Yes, it is in fact still a war
zone'' and ``There's a lot of people--active-duty, Guard and Reserve--
who are going up there on a daily basis risking their lives.''
It's people like TSgt. David Yates of the Alabama Air National
Guard who prepares and secures the munitions that our pilots' carry.
It's people like Lt. Col. Steve Cray, a commercial and Air Guard pilot
and CMSgt. Tim Brisson, the superintendent of aircraft maintenance of
the Vermont Air National Guard, who not only deploy daily to dangerous
places abroad in support of Expeditionary Aerospace Force (EAF)
operations--but do it in critical Commander and maintenance chief
leadership positions.
The Air National Guard is represented in all 54 states and
territories by 88 Flying Wings; 579 Mission Support Units, with over
108,000 proud and skilled people--68 percent of whom are Traditional
Guard volunteers--flying nearly 1,200 aircraft. We are significantly
represented in nearly all Air Force mission areas contributing over 34
percent of the Air Force operational mission for as little as 7.2
percent of the budget.
Over the last decade, the Air National Guard has significantly
changed--in both relevance and accessibility--but most significantly--
in skill, professionalism and volunteer participation. Since 1990-1991
Desert Storm/Desert Shield, the Air National Guard contributions to
sustained operations have increased 1,000 percent. We are no longer a
``force in reserve'', but are around the world partnering with our
Active and Reserve components as the finest example of Total Force
integration. ANG support to all USAF contingency operations over the
last decade has increased from 24 to 34 percent of the Total Force
aircraft employed. The number of Active Duty days per ANG member (above
the 39 day obligation) has increased on the average from 5 to 16 (320
percent increase)--all based on the volunteerism of our dedicated
citizen airmen.
In addition to our critical warfighting capabilities, America
depends on the Air National Guard to do other vital missions like New
York's 109th Airlift Wing's Antarctica support to the National Science
Foundation. The 109th was recently selected as one of five winners of
the Air Force Chief of Staff Team Excellence Award as well as the
winner of top international honors at the Royal International Air
Tattoo 2000.
These men and women are the diverse face of humanitarian responses
to natural disasters both in our own borders and throughout foreign
lands--bringing food, water, relief to people or places in need--
``responding'' to a call for help and intervention. Air Guard warriors
like TSgt. Chris Whitcomb from North Carolina's 145th Airlift Wing
fought the worst fires this year in over 50 years across 5.6 million
acres of America--roughly the size of Massachusetts. This year our
nation entered the highest state of fire alert--fire preparedness level
five. TSgt. Whitcomb, a decorated Gulf War veteran says he gets ``more
of a feeling of accomplishment directly protecting U.S. citizens and
their property from the wildfires.''
But we're not just fighting the fires from dangerous tree top
levels. Air National Guard and Forest Service fire fighters, RED HORSE
and Prime BEEF engineers--from many units like Montana's 120th Fighter
Wing--were on the ground hard at work--in life-threatening positions,
while they were fed and supported by Nevada's 152nd Services Flight led
by SMSgt. Tom Kurkowski--a 17 year veteran with Desert Storm
experience. Over the last 6 months, our three C-130 Modular Airborne
Fire Fighting Systems, or MAFFs, flew over 870 sorties for nearly 980
hours; made 841 airdrops to disperse over 2.3 million gallons of
retardant across 19 states. We recently assisted the United States
Forest Service with the acquisition process to purchase eight upgraded
Airborne Fire Fighting Systems (AFFS) to enhance our effectiveness
fighting this nation's forest fires.
Additionally, it is our inherent obligations to not only protect,
but to also defend. Homeland security entails the protection and
defense of our territory, population, institutions, and infrastructure
from external attacks and intrusions. Rapidly advancing technological
capabilities will give large and small nation states the ability to
threaten or directly attack the United States with asymmetric means
such as weapons of mass destruction, cyber weapons, and terrorism.
Traditional means of defense often fail against these unconventional
threats. Homeland security will require us to engage, support and
cooperate with all levels of government and the private sector in new
and innovative ways.
Our contributions don't stop at America's borders. During the next
year alone, these same Air National Guard C-130 MAFFs units--like
Wyoming's 153rd Airlift Wing--will supply ready aircraft and crews to
fulfill Aerospace Expeditionary Force (AEF) combat delivery
requirements in Operations Coronet Oak and Southern Watch. They define
``full-spectrum'' Aerospace Expeditionary Forces--responding to
community, state and National Command Authority needs from fighting
fires in America to supporting combat fighting operations around the
world.
These Air National Guard men and women are the trained, skilled,
and ``prepared'' citizen warriors, like Texas' 147 Fighter Wing's Maj.
Mike ``Bones'' McCoy. Mike put his civilian job as an airline pilot on
hold for two weeks to fly combat missions in a military campaign. Maj.
McCoy shows the Hussein's and Milosevich's of the world what a
galvanized nation of American citizens trained in the military art of
war--can and will do to keep the world safe from aggressors and
tyranny.
It's a lesson our leaders learned in Korea and the lesson we must
insure our leaders know and understand today and remember in the
future. This past year we commemorated the 50th Anniversary of the
Korean War, where over 45,000 Air Guardsmen, 80 percent of the force
were mobilized to fight a war they were ill equipped and resourced to
fly. During this critical call by our nation, the Air National Guard
reached the ``Turning Point'' to become increasingly effective and
relevant forever. I know most of you know the history, but none of us
should ever forget the lesson. We must be resourced. We must be
modernized. We must be appropriately trained. We must be ready.
The Air National Guard is the most relevant, ready, and accessible
reserve component in the Department of Defense today. Since the end of
the Cold War, these forces have been increasingly deployed in support
of the full range of operations. In cycle one of the AEF, the Air
National Guard deployed 25,000 of its people--nearly 24 percent--almost
2,500 per AEF. We contributed almost 20 percent of the Total Force
aviation package and 7 percent of the Expeditionary Combat Support or
ECS requirements. The Air National Guard contributed 42 percent of the
C-130 intra-theatre lift and 22 percent of the KC-135 steady state air
refueling AEF requirement. Of the Air Guard's 38 combat-coded fighter
units, all 6 A-10 units, all 6 F-15 units, all 4 F-16 Block 40 units,
the 1 F-16 Block 50 unit, and 17 of 21 General purpose F-16 units were
aligned during Cycle 1 rotations. Air National Guard contributions to
the Total Force will be even more robust in EAF Cycle 2, when every
combat-coded ANG fighter unit is aligned to participate, including
eight Air Guard Precision Guided Munitions or PGM equipped units. In
Cycle 2, a total of 22 ANG F-15 and F-16 units will fly the air
superiority mission.
Yes we are busy. Our people are volunteering above Desert Storm
Peak levels with nearly 75 percent of our total workdays supporting
CINC and Service requirements around the world. Our men and women are
proud of their contributions. We've reduced our support to ``good
deal'' exercises and now do ``real world'' missions that reduce the
TEMPO requirements on our active component by at least 10-15 percent in
almost every major mission area. Lt. Col. Steve Kopp can attest to
that. He flies with Tulsa's 138th Fighter Wing, which has been deployed
to fly missions over Iraq four times since 1996. The 138th is scheduled
for another mission there this summer.
With the fielding of the ANG's number one CAF modernization
priority--Precision Guided Munitions (PGM) capability--Targeting Pods--
the ANG was able to provide 100 percent of the strike and air
superiority fighters in AEF 9. We are more relevant to the fight than
ever before in our history.
Additionally, our KC-135 fleet is tasked for the sole support of
Airborne Warning and Control System (AWACS) aircraft at NATO Air Base
Geilenkirchen. This entails an annual 850 flying hours and offloading
over 6 million pounds of fuel during a 44-week year. Air National Guard
units deploy two aircraft with sufficient flight, maintenance, and
support personnel and equipment to sustain these operations.
This unprecedented contribution by your Air National Guard has
occurred all at a time when we have reduced our endstrength numbers to
1984 levels. The bottom line: In 30 months--or two complete cycles of
the AEF--nearly half the Air National Guard will know first hand what
it means to be an expeditionary Aerospace Force. These same warriors
will take this experience and knowledge back to their communities,
families, employers and local and state political leaders. They will
help the Air Force and the nation immeasurably in building
understanding and support for a strong and ready Aerospace Force. I
routinely visit these men and women in theater when they deploy. They
consistently tell me what Airman Aaron Bachstein of Indiana's 181st
Fighter Wing said on the eve of their AEF deployment to Turkey, ``I
knew the deployments were more involved, but that's part of the
package. The additional responsibility is part of the attraction. I can
see where the Guard is picking up regular Air Force missions. It's
exciting.''
In the last year, the Air National Guard filled more than just
``positions.'' We brought skills, experience and training to the
theater that exponentially increased Air Force AEF warfighting
capability. BrigGen. Scott ``Zapper'' Mayes of the Alabama Air National
Guard was dodging anti-aircraft fire over Hanoi before most of the
active-duty pilots in AEF 9 were born. The pilots under his command
have an average of 2,000 hours flying in the F-16. With an Air National
Guard base close to a commercial hub, ``Scotty'' has pilots waiting to
``morph into warriors.'' As the Aerospace mission becomes more
sophisticated, our remarkable Air National Guard experience and
maturity provides more solutions to a growing total force problem.
We can train others well because we are trained well ourselves.
It's new mission areas like Tyndall's Associate Unit where the Florida
Air National Guard trains the Total Force pilot to fly the F-15. Using
a mix of 18 Traditional Guard and 16 Full-time instructor pilots, we
provide what Col. Charlie Campbell, the Squadron Commander, calls a
``stabilized, highly proficient instructor cadre with great continuity
and leadership.'' His perspective is backed by the former 325th Fighter
Wing Commander, Brig. Gen. Buchanan, who stated, ``Our partnership with
the Guard is a good way to strike a balance that allows us to take
advantage of the ANG's resident F-15 experience while trying to bridge
our current pilot gap.'' We're expanding this sort of partnership and
capability to many other training initiatives. This year, we filled
nearly 700 ``extra'' technical training slots--over and above the
Trained Personnel Requirements (TPR). We insured almost an entire
additional ANG wing's worth of better trained warriors. This year, so
far, we've increased this technical training number to well over 1,000,
and increased Basic Military Training allocation by well over 900. This
brings in serious new combat capability to the AEF requirements. We
exceeded our TPR allocations in critical career fields like mechanics
and fire protection. Once again, we provided the Total Force solution
to an identified AEF shortfall.
The Air National Guard received 186 undergraduate pilot training
slots in fiscal year 2001, up 13 from the previous year. The projected
pilot shortage for most of the next decade makes it imperative to
increase the pipeline flow to help sustain the Guard's combat
readiness--especially as we assimilate more non-prior service
individuals as a function of our overall recruiting effort.
We continue to pursue efforts to establish follow-on training bases
for the KC-135E and C-130 pilots to offset training capacity
shortfalls. Additional ANG F-16 pilot training units are being
established at Kelly AFB, Texas, and Springfield, Ohio. The recently
converted F-15 school at Kingsley Field, Oregon is still expanding
student production. The Air Control Squadron in Phoenix, Arizona is
converting to a schoolhouse unit to train Guard and Active Duty
personnel.
From 14 control towers and 11 air traffic control radar facilities
around the country, our air traffic control personnel controlled over 1
million aircraft, placing the Air National Guard as the third busiest
of the nine Major Commands in the Air Force and ensuring our ability to
train and remain combat ready to perform this function during any
contingency.
Ancillary training requirements have been competing with our
capability to prepare for and deliver our combat mission. We canvassed
our units to identify the pressure points and just released a new
requirement list that significantly reduces the numbers considered
absolutely essential to our Expeditionary Aerospace Force culture. This
has resulted in a reduction from 530 previous requirements to 69
current ones--of which 53 apply to the Air National Guard. This gives
our men and women more effective time to focus on mission and weapon
system specific training.
In addition, we are pushing for increased utilization of Distance
Learning methods for training requirements that reduce the burdens of
time, travel and expense for our people--and compete with AEF
commitments. The Air National Guard Warrior Network now reaches more
than 202 sites throughout the nation and broadcasts training from 3
major training centers. In addition, the Air Force and Air Force
Reserve now share the same satellite system. This gives us expanded
access to mutual training programs. In addition, we were primary
members on the DOD compensation Integrated Process Team which
recommended methods of payment to our people who conduct Distance
Learning training away from their respective units. We can now operate
smarter and better for our dedicated people. Our expeditionary
requirements demand new approaches.
These warriors are doing the jobs they've trained a lifetime to do
and they are doing them with great attention to safety. Command
emphasis and leadership has made the difference. Over the last decade
the Air National Guard has become the model for safety. We are starting
the new millennium on a very positive note for flight, ground, and
weapons safety programs.
Despite the increased OPTEMPO, PERSTEMPO, and the first cycle of
the Expeditionary Air Force, we have accomplished another outstanding
safety year. The Air National Guard ended fiscal year 2000 with a rate
of 0.89 flight mishaps per 100,000 flying hours. Fiscal year 2000 ties
the record established in fiscal year 1998 as our best year ever for
Class A flight mishaps.
For the world's most effective, engaged, and employed reserve
component, our Air National Guard capability in the future hinges on
effective weapon system modernization and recapitalization--along side
our Active Component. We need to ensure that our people are armed with
the best and safest equipment our active component operates. Of the
seven major weapon systems the Air Force operates, the ANG has--on
average--the oldest systems in every one--except the C-130. Our
readiness continues to be strained due in large part to aging aircraft,
lack of spare parts, and increasing workloads associated with both. Our
Air National Guard modernization efforts and roadmaps continue to push
the envelope for all airframes. We are still focused on our Combat
Quadrangle and AEF support with priorities given to precision strike,
information dominance and battlespace awareness through Data Link/
combat ID, 24-hour operations and enhanced survivability. Our ``medium
look''--extended to 2010--focuses on structural integrity and engines
and keeping our airframes lethal. Our ``long look''--out to 2015--
projects the future missions and their impact on an expected decreasing
force structure with a focus on seamless forces and capabilities across
the Total Force--and our ANG preparations for this future.
Your support and funding have enabled us to make some major in-
roads this year and set the foundation for continued improvements. Let
me bring you up to date on some of these now.
The ingenuity of Air National Guard has made positive, mission
impacting strides for our total force. Recently, our unit in Tulsa,
Oklahoma conceptualized, assisted in the development and testing, and
fielded a down-sized Low Altitude Navigation and Targeting Infrared for
Night (LANTIRN) pod test station. The previous legacy test station used
in the Air Force, LANTIRN Mobile Support Shelter (LMSS), is currently
considered too large to be moved effectively to support contingencies
due to the airlift it consumes. The new downsized test station fielded
by the Air National Guard gives the Air Force an optimum deployment
LANTIRN support capability that is otherwise not available.
Thanks to your support, the ANG F-16 pre-block 40 fleet now
possesses full front line combat capability. Your continued support is
vital to our efforts to continue these critical programs and remain a
fully relevant Total Force partner. Our Block 25/30/32 jets are capable
of employing Precision Guided Munitions (PGM) by means of a self-
designated laser targeting pod. Our next group of pods are due for
delivery in the March 2001 through February 2002 time frame, which
combined with prior purchases will give us a total of 64 pods in our
fleet. We still need 96 more pods to fill our one for one requirement.
Until then, by sharing existing pods, the Air Guard will fully train
nearly 22 F-16 pilots by 2003 and will fully equip all units by 2006.
In the last six months, all of our Block 25/30/32 jets were wired
for the Global Positioning System (GPS) giving us precise navigation
and target acquisition capability. At the same time our Night Vision
Imaging System (NVIS) was completely installed on our F-16's giving us
24-hour combat capability. Combined with installation of the
Situational Awareness Data Link (SADL) we have significantly improved
our F-16 Fleet--thanks to your significant support. Our focus now is on
full support for ``Falcon Star''--a structure modification program that
significantly extends the service life of this airplane. When we add a
new capability--the Theatre Airborne Reconnaissance System or TARS--our
F-16's become increasingly viable as both a weapons delivery system as
well as an information exploitation platform. For those of you who may
not be familiar with the TARS capability, let me take a few minutes to
highlight its features. TARS will return the manned tactical
reconnaissance mission to the Air Force. In keeping with the modern
battlefield's need for a responsive kill-chain, TARS improves the Air
Force's ability to find, identify, and engage mobile/relocatable
targets. Our current capability includes two electro-optical sensors
for day, under the weather reconnaissance. We are working closely with
our industry partners on an improvement package to add synthetic
aperture radar (SAR), a datalink, and the high bandwidth necessary to
make this system an all-weather, day or night sensor. We will
demonstrate the ability to gather and relay critical information
through the datalink to the Air Operations Center (AOC) this summer. If
successful, the result will be bombs on target within single digit
minutes.
With a focus on Precision Guided Munitions capability, combined
with Falcon Star engine and structure modifications and TARS, the Air
National Guard F-16 block 25/30/32 community will provide the bridge to
the next generation of power-projection precision combat systems.
But our fighters don't get to the fight or get home safely without
the efforts of our stalwart Tanker fleet. Increasingly, our Air Guard
modernization focus has shifted to necessary improvements in our KC-135
fleet and we need to accelerate the R model conversion kits. Over the
last year, with the assistance of our Adjutants Generals, we developed
a consolidated plan that includes the purchase of 100 R conversion kits
at a rate of 16 per year. This would fix two full squadrons a year over
the next six years. Up until now, the Air National Guard was at the
front of this push. There has recently been a significant increase in
support for expediting the ``E to R to X'' conversion. With the Pacer
Crag upgrade completed this time next year and the Global Air Traffic
Management (GATM) kits buy beginning the same time, we are well on our
way to serious improvements in our Air Guard tanker assets. With our
anticipated addition of Situation Awareness Data Link (SADL) the Air
National Guard, once again leads the way for issues that directly
effect future expeditionary operations. With nearly half the entire air
refueling mission, the Air National Guard must not let tanker
modernization issues be ignored.
Our F-15s led the Air Superiority role in AEF 9 in Southwest Asia
while continuing their air sovereignty alert requirements at home.
Thank you for the support you have given this valuable weapon system as
we struggle to remain viable versus ever more capable threats. The
$26.4 million you added for the Bolt-On-Launcher (BOL) for advanced
infrared countermeasures and the $17.5 million added to complete
installation of the Fighter Data Link (FDL) ensures the Guard F-15s are
able to face the threats being faced during their AEF rotations. I am
still concerned with the long-term reliability and sustainability
issues associated with this aging aircraft. We need to study the future
of this community and consider the implications of Air Force F-22
purchases. Our current plan is to realize the benefits of Air Force F-
15 flow downs. The current Air Force F-22 program anticipates the ANG
in an associate role and we are hopeful that in the future there will
be a unit-equipped role.
The focus over the last year for our A-10's has been to insure
precision engagement capability that includes SADL, Targeting Pod
integration, DC power, digital stores management system and a 1760 bus.
Last October, we began the Air Guard installation of the new
countermeasures management system at Bradley Air National Guard Base in
Connecticut, which will be complete in two years. By doing this
ourselves we save the Air National Guard nearly $3 million. In
addition, the A-10 has received some additional support this year--
coming off their significant contributions to Operation Allied Force.
However, in some circles, the A-10 is still perceived as a ``cash
cow'' and reprogramming could jeopardize our initiatives to upgrade
these systems. We are looking at more commercial off-the-shelf (COTS)
engine solutions to save money and still improve the capabilities of
this first-called, most-used ``hog.''
Our Kansas and Georgia Air National Guard B-1's made history on
October 13th this year when they became the first Guard aircraft to
successfully drop America's newest smart bomb in the Utah Test Range.
These Air National Guard B-1s scored direct hits on their targets using
2,000 pound Joint Direct Attack Munitions (JDAM). This is the same
smart bomb used with devastating effects by B-2s in Kosovo. The 8 Air
Guard B-1Bs--which can carry 24 JDAM versus the B-2's 16 and the B-52's
12--now possess more precision striking power than all the allied
forces delivered on the first night of Operation Desert Storm. On hand
to witness this historic event was General Richard Myers--the Vice
Chairman of the Joint Chiefs of Staff. At the completion of the flight,
General Myers said, ``I am extremely pleased I had the opportunity
today to participate in the first live JDAM mission flown by the Kansas
Air National Guard in a 184th Bomb Wing B-1B aircraft. This mission
once again demonstrates the ability of our reserve forces to perform to
the highest standards.'' In addition to the new use of laptop computers
connected to hand held global positioning systems that give our B-1s
better threat avoidance, this new capability increases the
effectiveness of our B-1s by more than 2,000 percent. We still have
issues to work like the lack of independent and expensive Readiness
Spares Parts (RSP) kits--though we have achieved success in
establishing the requirement over the last year. The addition of Beyond
the Line of Sight (BLOS) Data Link--a 2 way link that provides near
real time target and threat information, as well as Defensive system
upgrades and Airborne Video Tape recorder answers a growing call for
long range strike capability.
We still require the C-130 cockpit armor as mandated by USCENTCOM,
to make significant improvements in the survivability of our fleet
while supporting AEF taskings. With increasing reliance on our tactical
lift workhorse we need defensive countermeasures systems and
battlespace situational awareness capabilities that allow us to operate
in hostile conditions and to counter the prolific Infrared (IR)
threats. We continue our work to bring the full complement of C-130J
aircraft to Air National Guard Units in Maryland, Pennsylvania, Rhode
Island and California. In addition, our Air National Guard unit in
Harrisburg, Pennsylvania is converting from their EC-130Es to the EC-
130Js cross-decking the special mission equipment that makes this one
of a kind psychological warfare mission possible. We are progressing in
this ``revolutionary'' program working with all stakeholders to iron
out the bugs that come with any new weapon systems. Our biggest Total
Force issue remains the C-130 Avionics Modernization Program
development. We expect contract award very soon, hopefully by the end
of May. This $4 billion program will modify the C-130 fleet through
2013 making it viable well into this century.
We are striving to move the C-17 conversion forward at Jackson,
Mississippi--replacing the aging and retiring C-141s. We are laying the
groundwork for the necessary infrastructure and support requirements,
however we harbor serious concerns regarding the associated funding. We
continue to work for the bed-down in fiscal year 2004. With the current
focus on strategic airlift shortfalls, many would hope for an increase
in C-17 fleet-wide numbers.
The C-5 Avionics Modernization Program (AMP) is the first of a two-
phased comprehensive modernization for the C-5. This program redesigns
the architecture of the avionics system, installs All-Weather Flight
Control System (AWFCS), Traffic Alert and Collision Avoidance System
(TCAS), Terrain Awareness and Warning System (TAWS) and makes the C-5
Global Air Traffic Management (GATM) compliant. The AWFCS replaces low
reliability Line Replaceable Units (LRUs) in the automatic flight
control system and replaces aging mechanical instruments in the engine
and flight systems. A GATM capability, which encompasses
communications, navigation, and surveillance (CNS) requirements, will
be concurrently incorporated into the aircraft to maintain worldwide
airspace access well into the 21st Century.
The Reliability Enhancement and Reengining Program (RERP) is the
second of the two-phased modernization of the C-5 that improves
reliability, maintainability, and availability. This effort centers
around replacing TF39 engines with more reliable, commercial off the
shelf (COTS) turbofan engine. This program also upgrades numerous other
systems including: flight controls, electronics, hydraulics, landing
gear, fuel system, airframe, fire suppression system, and
pressurization/air conditioning system.
The 201st Airlift Squadron District of Columbia Air National Guard
provides worldwide air transportation for Congressional Members/
Delegations (CODEL), the Executive Branch, Department of Defense (DOD)
officials, high-ranking United States and foreign dignitaries and HQ
USAF inspection team travel. The 201st currently uses the C-22B fleet
to meet team travel and CODEL missions but due to age and cost to
upgrade, they are scheduled for retirement starting in October of 2001.
The currently utilized C-22B is a 1964 model Boeing 727-100 aircraft.
Congress recognized the need for a replacement aircraft and provided
funding to purchase the first C-40C in fiscal year 2001.
The readiness levels of the Air National Guard depend on modern
equipment availability. Adequate funding levels for Guard and Reserve
equipment are becoming increasingly critical. Reserve components are
being called on to perform a greater share of day-to-day missions, as
well as to relieve the high operational tempo for active duty forces.
Compatible equipment is essential to reduced logistics costs and to
enable active, Guard and Reserve units to train together. The equipment
readiness goal is to ensure the Reserve Components have compatible
equipment to enable mission accomplishment side-by-side with active
forces and coalition partners.
A high state of readiness also depends on a robust infrastructure.
Facilities in the Guard today run the gamut between those needing
considerable work and those which have won design and construction
awards. As a direct result of Congressional support nearly 50 percent
of the Air National Guard facilities are adequate, and we thank you for
that. Our working environment becomes our Quality of Life sustainment.
We know that given the funding, we can produce right-sized, efficient,
quality work places for our airmen. However, there are three barriers
that stand in our way--an aging infrastructure, funding constraints,
and the impact of new mission conversions, which consume available
funding before current requirements can be addressed.
The recently published Installations Readiness Report for 2000
shows that of the six categories that apply to the Air National Guard,
four were rated C-4. This indicates major deficiencies that preclude
satisfactory mission accomplishment. Our backlog of maintenance and
repair projects currently exceeds $1.5 billion.
The challenge of maintaining facilities and readiness has also
provided opportunities to excel. We have undertaken several initiatives
within the Guard to get the most out of every dollar. We continue to
pursue joint projects at every opportunity, have improved our execution
strategies, and aggressively manage our funds to provide for
reprogramming actions.
It is because of the exceptional people in our units that we
continue to overcome these challenges. While we've put more on our
members plates, we've done it smartly and with attention to bonuses,
grade relief, grade enhancements and employer and family support.
Our current economic and recruiting climate has caused us to be
more aggressive in our approach to recruit and retain quality members
to support mission requirements. Our recruiting successes are a direct
result of additional resources and initiatives, and heavy involvement
by Adjutants General, Commanders and the members themselves. One of the
major challenges facing our recruiters today is the shrinking pool of
active duty accessions resulting in an increased reliance on non-prior
service recruits. This increases the need for formal school training
allocations. As a counter to that, we have requested additional
recruiter authorizations. We will utilize these positions at every
active duty Air Force Base. With an in-service recruiter at each
location, the Air National Guard will offer the newly separated
individuals a chance to remain in uniform while increasing the Guard's
experience base and decreasing the shortfalls.
We take great pride in the fact that our retention figures for the
past five years averages in the 90 plus percentile. Additional future
recruiting and retention programs include enhanced high school presence
by use of greatly expanded internet exposure, establishing retention
focus groups across the five regions to identify root causes for
staying or leaving, and maximizing current incentive programs.
The Air National Guard Incentive Program is designed as a monetary
motivator to support critical manning requirements in units with skills
that are severely or chronically undermanned. For critical skills, we
offer maximum incentives and have increased the number of career field
specialties eligible for bonus payments. We've succeeded in our efforts
to offer Aviator Continuation Pay (ACP) to eligible Active Guard and
Reserve (AGR) pilots who agree to stay with us for three years at
$15,000 per year, or five years at $25,000 per year. In light of our
increased operational tempo, we are actively pursing staff options to
provide incentive programs for our traditional guardsmen.
Control Grade Relief at the unit level would provide the additional
boost required supporting our full-time AGR force. We had over 350
deserving people awaiting promotions. Thanks to your efforts, we
achieved success this fiscal year. The plan increases both officers and
enlisted personnel and--through a domino affect--should help to
alleviate the pressing problem. Through all these efforts, we made a
difference for an Air National Guard force of seasoned warriors who
deserve no less and are committed to more.
As the Air National Guard has become a total ``expeditionary''
aerospace partner, we are finding an increasing need for viable and
sustainable external support for our members. Our readiness, retention,
and volunteerism depend on our families' sense of belonging and
participation, and on our employers' education and support.
Last year's focus on the ``Year of the Family'', coupled with the
sustained AEF rotations, brought to the forefront the need for a formal
family support program. We have many outstanding volunteers who give
consistently and unselfishly like Mrs. Cindy Whitney, the spouse of a
Maine Air National Guard member and first Air National Guard recipient
of the National Military Family Association, ``Very Important Patriot''
Award. Mrs. Whitney supports our families at home while their loved
ones are deployed with the Aerospace Expeditionary Force (AEF) cycle.
However, when we researched how Air Force and Air Force Reserve Command
handled this requirement, we found some very interesting and telling
information. The Air Force currently allocates through their Family
Support Center staff and operating budgets alone, $125 per member; Air
Force Reserve Command--programmed in the Air Force POM since Desert
Storm--spends $58 per member with an expected increase to $70. The Air
National Guard last year took $750,000 out-of-hide to provide a $7 per
member allocation using additional duty staff or unpaid, overburdened
volunteers. This is clearly not enough. The Air National Guard intends
to make available a fulltime contract family readiness coordinator at
each unit. This full-time dedicated contract capability will give the
wings and states the help they need to support our nearly 350,000
family members. This action does not change any part of the existing
National Guard Bureau Family Program structure except to add dedicated
capability to the wing levels.
Under the great leadership of Maj. Gen. Paul Sullivan of Ohio,
we've brought together an Integrated Process Team (IPT) to develop
childcare alternatives based on demographic needs at the unit level.
This IPT has moved forward at breakneck speed. This past January, the
Air Force sent out a letter to all their child care centers permitting
children of National Guard members to participate when space is
available. This includes the extended hour program that can be used for
drill weekends. All Department of Defense child care facilities are
being asked to do the same.
Phase 2 is a pilot program that will establish civilian child care
for our Guard members at units not co-located with an active duty base.
This subsidy will be based on the Guard member's total family income.
The pilot will test both full-time and drill weekend child care. The
pilot sites include Air National Guard bases in New York, South Dakota,
Wisconsin, Idaho, West Virginia, Missouri, Iowa, Minnesota, Vermont,
Arizona, Ohio, Mississippi, and Arkansas.
This past January, we began to focus on critical enablers and
partners--the employers of our National Guard men and women. The year
2001 has been designated ``Year of the Employer''. Over the last 10
years, employer awareness, understanding, and support have become vital
to our ability to meet our requirements. We must continue to strengthen
our relationships to solidify our readiness and relevancy. If our
employers aren't happy, our Guard men and women aren't happy. We need
to make it easy and valuable for both to participate. If we don't, we
lose a fundamental Air National Guard core competency--protection of
our citizen-airman and soldier heritage.
During the year, we will partner with the National Committee for
Employer Support of the Guard and Reserve (NCESGR) to ensure our
employers remain satisfied with our ``shared'' people and their
dedicated commitment to continued military service. At the same time,
we have an opportunity to increase the visibility of the military in
the communities to help the Total Force bridge the growing civil-
military gap. In our effort to educate America's employers, we educate
a large community of leaders on the mission and values of military
service.
We've already taken large steps toward this goal. We've made
participation for today's employers easier by our Aerospace
Expeditionary Force (AEF) predictability and stability. We've ensured a
dedicated rotator to get our men and women to and from an AEF location.
We've identified employer support in our Strategic Plan. We've taken
the lead to establish a Reserve Component Airline Symposium where we
meet with the nation's airline industry's chief pilots. These are but a
few of the initiatives taking hold as we focus on the ``silent
partner'' behind all of our men and women. The importance of the family
and employers can best be summed up in the words of 13 year old
Jennifer Causey, the daughter of a Wyoming Air National Guard member
who wrote, ``I think Guard families matter because productive members
raise new generations of productive and proud Guard members. They know
what to do and the level of commitment it takes. They know all the hard
work that the Guard member goes through, not only on the job in their
civilian occupation but also at the Guard and in their relationships at
home. They also know the pride and integrity it instills to be able to
serve your country in a dual role as a military member and civilian
community member. I think if you are a Guard member, you should have a
lot of self-respect. You have earned it.''
Mr. Chairman, we in the Air National Guard are proud to serve this
great nation as Citizen-Airmen. Building the strongest possible Air
National Guard is our most important objective. Our people, readiness
modernization programs and infrastructure supported through your
Congressional actions are necessary to help maintain the Air National
Guard as the best reserve force.
Mr. Chairman, we count on your support to continue meeting our
mission requirements. We are confident that the men and women of the
Air National Guard will meet the challenges set before us. I thank you
for allowing me this opportunity to give you the Air National Guard
posture.

Senator Stevens. Thank you, gentlemen. We will see if we
can put that last item in the supplemental so we can do it on
your watch.

RECRUITING

I am still worried about this recruitment problem. Let me
ask you just generally, do you really have the assets and the
funds to recruit properly now, General Davis?
General Davis. Well, sir, in both the Army Guard and the
Air Guard I would defer to my two specialists in the Army and
Air Guard, but in general we do not have enough money, I do not
think, to provide all of the advertising we would like to have.
Senator Stevens. What about active duty personnel. You said
you wanted active duty. Do you need it there, too, in
recruiting?
General Davis. Yes, sir. You have to have so many contacts
in order to get enough contacts to bring in the number of
people we need and require to make sure we make our end
strength. For example, the Air Guard was on end strength last
year. The problem was, they increased by 1,300 people, so we
need about 100 additional accessions per month, net.
Senator Stevens. I thought with the Montgomery money that
you would be doing better.
General Davis. We are, sir, and that has helped enormously.
One of the reasons we have the retention rate we have is
because of the Montgomery GI bill and, as you are aware, sir,
many of the States have additional programs that are State-
funded to allow for tuition offsets or whatever.
Senator Stevens. That all folds into the Reserve Officers
Training Corps (ROTC), does it not?
General Davis. No, sir, it is not a part of ROTC. If you
join the National Guard in Ohio, as an example, you get a 100-
percent tuition abatement if you go to a state school in Ohio,
and one of the problems we have had with the Guard in spots is
that if a state adjacent to yours offers it and you do not, the
kids from your state are going to go next door and join the
Guard, but that is independent of the relationship with the
ROTC.
We do have in the Army Guard a simultaneous membership
program, where you can belong to the ROTC and the Army Guard.
General Schultz can address that. But generally speaking we
need enough recruiters, both Army Guard and Air Guard, just to
make those contacts. You have got to have so many contacts with
people who are potential candidates or recruits in order to
get, and narrow it down to where you can find that quality
candidate that you actually come out and swear in and join and
go to school and qualify and return to the unit, so we do need
additional recruiters in both the Army Guard and the Air Guard,
and additional funds for recruiting and advertising.
General Schultz. If I could, Mr. Chairman.
Senator Stevens. General Schultz, I was just going to ask
you, I am told by our staff that you are short more than 5,000
company grade officers and 1,500 warrant officers.
General Schultz. Correct.
Senator Stevens. Why is that not tied in to ROTC?
General Schultz. It is tied into ROTC. What we are missing
today is accession through ROTC. In the past couple of years,
the Guard and Reserve have had fewer than 200 members arrive in
our units from the ROTC program, which is simply not enough for
normal activity and normal turnover, plus the Officer Candidate
School (OCS) graduations, plus those coming off of active duty,
just simply fall short of our total requirements.
So while I tell you that our enlisted strength is in pretty
good shape, we are short commissioned officers at the company
grade level. The majority of the reasons are, as I look at why
officers are leaving today, just resignation, other interests,
other priorities, and so we are looking now at incentive
programs to keep the officers in. Today, that is not possible.
Senator Stevens. Well, have you done exit surveys? Is it
the long-term deployments?
General Schultz. The schedule and pace of things, is one of
the reasons they leave. Long-term deployments overseas is
another. What we found about deployments overseas is, the
turnover in those units is not much different than any other
unit, so it is not just the overseas part. It is the schedule
that we ask units to be a part of during our normal training
cycles that I think is a piece of the problem, and some of this
we are dealing with inside the Army.
Senator Stevens. What are you going to do about the
shortage of officers?
General Schultz. Well, one, we are working with the Deputy
Chief of Staff of personnel, increasing the ROTC graduate flow
into the Guard units. That is step number 1.
The other is, we are encouraging the Adjutant General's
through the State OCS programs to increase the students in
those programs and in those categories we are simply not
producing enough graduates in OCS today, Senator. We had 800
officers graduate last year, and that is just not enough for a
force the size of ours.
General Davis. We have some disincentives, too, sir, when
young kids are in a tuition offset program, or a tuition
payback, if they are still on student loans, if they go to OCS,
the program automatically stops the payback on their loans, the
student repayment of loans, and so we have got some glitches
within the system, and we are working all of those out, and
some of the specifics of that, but that is one major inhibitor,
sir.
Senator Stevens. Is that an administrative problem, or a
legislative problem? Beyond that, do you not have some money to
help pay off student loans on the basis of recruitment?
General Davis. We do in terms of bonuses, sir, but not
otherwise.
General Schultz. We have money for our incentive
requirements, but when you ask how much money do you really
need, we move money around internally to cover our soldier
incentive based programs, and so we do have enough money, but
that is after we reprogram internally.
Senator Stevens. But if you pick up people who did not get
money during their college years, under Montgomery, or
assistance, and they are going to enlist, you ought to be able
to pay some of their student loan money, the debt that they
incurred as they put themselves through college.
General Schultz. And we do, we have programs that qualify.
Senator Stevens. Are they equal? Can you give them enough
of a payback?
General Schultz. I will take that, Senator, for the record,
and give you some detail on that. I do not have all those
numbers with me right here.
[The information follows:]

STUDENT LOAN REPAYMENT PROGRAM

The Student Loan Repayment Program (SLRP) is governed by
Title 10, United States Code, Chapter 1609, Section 16301. The
program is for enlisted members of the Reserve Components and
there are certain eligibility requirements that must be met to
receive these benefits.
Individual soldiers must complete one year of total
service. Soldiers must also complete Initial Active Duty for
Training. The loan must be at least one year old and the amount
can be no greater than $10,000. The SLRP pays $500 or 15
percent, whichever is greater, of the original balance once a
year on the anniversary date of enlistment. Payments are
limited to $1,500 per year.
A soldier attending OCS who is eligible for SLRP retains
eligibility up to the date of commissioning. Once the soldier
accepts a commission SLRP is terminated. A soldier attending
OCS may take advantage of the Tuition Assistance Program at
$3,500 per year. Tuition Assistance is available to officers
and is not terminated when a soldier accepts a commission.

Senator Stevens. Well, I think we gave the General Service
people, the Federal Government the right to pay up to $5,000 a
year for what, 5 years or something?
General Davis. We have that, sir, but when a young soldier
enrolls in Officer Candidate School he loses that tuition
repayment.
Senator Stevens. Well, again, tell us, is that your
regulation or our law?
General Davis. I think it is the law, as I understand it.
Senator Stevens. We can change it in the supplement, if
that is the case.
General Davis. We will work with your staff on that, sir.
Senator Stevens. You talk about jump-starting. It seems to
me you need to jump-start the program. You cannot get that far
behind on your warrant officers and your young officers and
catch up. There ought to be some concentrated attempt to get
those people in. We are now paying some of our staff debt for
college loans in order to retain our people, and you are going
to have to do the same to attract them.
General Davis. Yes, sir, we agree.
Senator Stevens. Gentlemen, I have to go chair the other
committee. Will you finish this up, please?
Senator Inouye. Thank you very much.

MORALE

Following up on the questioning, we have many problems, as
I noted with the first panel. Added to that, I note that
between 1945 and 1990, that is 45 years, the Guard and Reserves
were involuntarily activated four times, Korea, Cuba, Vietnam,
and Berlin. In the last 10 years you have had five activations:
the Persian Gulf War, Iraq, Haiti, Bosnia, and Kosovo. How is
the morale?
General Davis. Well, in general the morale is pretty good.
It is excellent, as you go visit the young people over in
Bosnia, and you visit the folks in Kosovo and Southwest Asia,
both when they are there as well as when they come back home.
They feel good about what they did. They joined the Guard to do
a mission, and they are doing a mission.
I would say to you in the Air Guard we do most of what we
do in those missions, at least the last few we have done, with
the exception of Allied Force. In the Air Guard we are able to
do that with volunteers, not under the presidential Reserve
callup. In the Army Guard, we are using presidential Reserve
call-up, and originally it was 9 months, and that created some
real consternation, and some difficulty for us.
In working with the active Army both here at the
headquarters with General Shinseki and his staff, as well as
the forces Command down in Atlanta with General Hendricks and
his staff, we have been able to get that reduced to 179 days
in-country. Now, having said that, it ends up being over 200
days, because there is a train-up time, and there is a
demobilization time on the back end.
But the discussions that have taken place, and we are
working on a program now to send some military police over this
fall, and they are going to look at 90 days. You will have a
group that will stay as kind of a key cadre, that will stay for
the entire 179 days, but some of the individual soldiers will
be there for 9 months.
Now, this is the kind of program that we have run in
Central and South America, in our construction programs, road
construction programs and vertical programs for years, sir,
where we have a duration cell we call it, or a duration cadre.
They are there for 4 to 6 months, and we rotate units in and
out, and they provide the command and control structure, and
the leadership and management structure for that.
So we are looking at some of those options. General Schultz
may want to comment a little further.
General Schultz. Senator, in terms of morale in the Army
Guard today, we are exceeding our retention objectives, which
would mean the number of soldiers which we had planned to have
extend, so using that as just one indicator, I think we are
pretty healthy.
I am concerned about turnover though, soldiers that leave
for other reasons, employment, family, perhaps maybe the
schedule of our activities, perhaps we plan for about 18
percent of our units to turn over every year, and we are at
18.5 right now, which means we are just a little bit higher
than we had programmed, but if I take you back to last year, we
ended the year at 19.6 turnover, which means that those
soldiers just leaving our unit for whatever set of reasons, now
that meant for us we had to enlist almost 7,000 more soldiers
than we had planned for.
Now, if I could just take that for a second into our
discussion we had with the previous panel, what that means is,
we had more nonprior service members than we had planned to
send to the Training and Doctrine Command, so that means we do
not have school seats in the right places or money in the right
places, but overall we are making progress with our attrition
and the question on morale, sir, and I think we are in good
shape today.
Senator Inouye. How about the Air Guard?

EXPEDITIONARY AEROSPACE FORCE

General Weaver. Mr. Chairman, if I could show you the
retention rate as I stated earlier, well over 90 percent in the
Air National Guard, if you look at all the units across the
board, the EAF has been a godsend to the Guard and Reserve for
us. It has allowed us a foot in the door. In fact, the door is
wide open to us in the Reserve component in our Air Force to do
the real-world stuff that we have been trained for many years
to do.
The aviation is not just the pilots now, it is the support
personnel that are standing up and going for 2 weeks at a time
in the Air National Guard and the Air National Guard under our
concept of deploying, and when they are coming back, if you
could only talk to them as much as we do, the basic comment is,
we regret that we could not stay longer.
They are doing what they have been trained to do. The
morale in those units now is higher than it ever has been, and
so it truly has been a tremendous success story, the EAF and
our Air Force, led by our Chief of Staff and then Secretary
Peters, who instituted the EAF.

RECRUITING

If I could go back, where we can save money is, as we have
gone in with a request this year for additional recruiters,
something the Air National Guard that we have not done before
is to recruit on active duty installations. That is not to say
to recruit people off of active duty, but to be there to inform
people who are making a decision whether to stay in or not.
We prefer them to stay in, but if they do opt to get out,
we would like to have them consider the Guard and Reserve, and
so we have begun recruiting on active duty installations,
something we had not done before, and the paid recruiting
campaigns that we have started last year with your help, we had
not done that before, so when I first came in the Guard after 8
years on active duty it was about a 90-10 split, about 90
percent active duty in the Guard, versus 10 percent home-grown.
Now, that figure is about 60-40, 60 percent from active
duty. We can save more money in training by recruiting on
active duty installations for those people getting out than we
could by setting up expensive training schools. The Air Force
has stood up to the requirement of our additional nonprior
service and their training programs as well.

PAY AND ALLOWANCES

There is one other part of that, and the pilot part of it,
and I have discussed this with many of the staff members, and
that is to increase our bonus, or our Aviation Career Incentive
Pay (ACIP), for our air crew members across the board. Our
Active Guard and Reserve men and women who are flying, we have
given them the partial pilot bonus, the one-thirtieth rate, but
I think we need to stand up as an organization and provide our
ACIP, that is, a full month flying pay for our air crew members
same as active duty pilots.
We lose about 215 pilots a year out of the Air National
Guard. They just do not go to the Reserves, do not go anywhere
else. If you consider, each pilot, we put about $6 million
worth of training. That is about $1.2 billion loss. If I retain
six pilots because of giving them a full ACIP, I will have paid
for that loss over and over again. I think it is something we
really seriously need to consider.

INCREASED OPERATIONAL TEMPO (OPTEMPO)

Senator Inouye. What is the employer reaction to your
increased OPTEMPO?
General Davis. Well, sir, it has happened in a couple of
instances where we have had, and we are aware of, where the
employers have not treated the people very well when they
returned. We have a system for that through the support,
National Committee for Employer Support of the Guard and
Reserve, and we have ombudsmen who handle these things.
One of the issues they are most concerned about, generally
speaking, they are concerned about the increased level of
activity, but their concern manifests itself a little
differently in a very small company. We are finding
particularly those companies, those smaller than 25 people, if
one or two members of the Guard are called, they really get
concerned. It is a high percentage of their workforce, and they
are concerned about that.
It can take a very key member of a firm that is, say, 10
people, because you do not have a lot of duplication or
replacement people, and so there is a lot of concern at that
level, but we have been working with the U.S. Chamber, and we
have done some surveys, and we think that if we can give the
unit enough time, so they know when they are going to go--we
have been able to do that in both the Army Guard and the Air
Guard, and one of the things, that has brought both designating
the rotations to Bosnia and Kosovo far enough ahead of time,
identifying the units, which General Schultz has been able to
do in the Army Guard, the Air Expeditionary Force, where we
know now what the rotation schedule is and when the unit is in
the queue.
That has really helped. That information passed back to the
employer, has really helped dampen a lot of the early criticism
we had. It was almost as if somebody came up and walked in the
door and said, oh, by the way, I will be going tomorrow for 9
months, and some of them did not--the Guardsmen on our side of
it did not communicate as well with the employers as they
could.
There are some employers who are concerned about it. We
hear anecdotally that some folks are not hiring people because
they are in the Guard or in the Reserve. That is against the
law, we all know, but some folks may attempt to do that, but it
is not pervasive, as best as we can determine. If we can tell
the folks ahead of time when they will be gone, most of our
employers are working well with us.
As General Weaver said, we have designated the year 2001 as
the Year of the Employer, and we have got a lot of additional
things we are doing this year. Every year is a Year of the
Employer in the sense that we try to work with the employees.
We have got some very specific efforts we undertake each year
to keep the employers better informed and make them know more
about what we do, to educate them on the mission.
Last year we had a trip to Europe, sir, and we were taking
over some civic leaders so they could see what the Guardsmen do
when they deploy forward, and one gentleman had written a
letter and said, I do not know why the Guard is doing that. The
Guard ought to be here at home, doing the missions here at
home. We have got no business being overseas.
So we had mailed the letters out a little before that, and
so my exec said, why don't we send him a letter. He went with
us. On the third day he was there he wanted to become part of
our Speaker's Bureau, sir. He just did not understand. He was
saying why we should not be over there, we ought to be here,
because he thought we ought to just do things like hurricanes
and floods and that kind of thing, and respond, but our young
people join partly because of the adventure.
They want to go overseas. They want to do some of those
things. They get a good sense of service. If they join to
become a mechanic, they want to be a mechanic. If we put them
busy doing mechanic's work, or doing infantryman work, they
will hang around and they will stay. If we do not do that with
them, then we have difficulty retaining them, and so interest
and training in those kinds of things become very key.
The employers, if we can educate them, and we can spend a
lot of money and a lot of time working with them to take them
on BOSSLIFT and to educate them about what we are all about,
and outreach to them, I think we are doing a lot better job
with that, and we are not hearing the hue and cry that we
initially heard about employers.
So we are not seeing a mass effort by employers, or even a
significant effort by employers who say, you cannot take our
employees, but the smaller employee, there are some issues
there, and I think the first panel you talked to, they
discussed some issues and incentives for the employers, some
recognition programs, that kind of a thing.
I think something like that is along the lines we need to
address the issue. There is a problem there, sir, and we have
to make sure we are addressing it. We do not think it is at a
level that it is not manageable, though, at this point, sir.
Senator Inouye. Thank you very much.
Senator Cochran.

DEPLOYMENT EXPENSES

Senator Cochran. Mr. Chairman, thank you. In September
there will be over 500 soldiers with the Mississippi National
Guard deployed to Bosnia as a part of the peacekeeping effort
there, and I have received a copy of the training schedule that
these soldiers will follow, and I think the first training
experience, designed to equip them with the knowledge and
experience that they need to do their job in Bosnia, starts
later this month at Camp Shelby, Mississippi, and I hope to be
able to visit them and wish them well as they undertake this
mission.
My question to you is, we are probably going to have a
supplemental appropriations bill for defense needs. Are the
funds that you have in your budgets now adequate to take care
of the specialized training and the deployment expenses
required of these troops and these units so that we can be
assured that they will be fully and adequately trained and be
able to do their job, and be able to come home safe and sound?
General Schultz. We have already received one personnel
reimbursement in contingency operations (CONOPS) this year. We
anticipate one before the close of the year. The operations and
maintenance side is an issue that I have had a couple of
discussions about, and that is that we expect States to take
money from their current budgets and invest early in some of
their training activity with an understanding that we are going
to find money for them later in the year.
Now, there is some risk in that, as you know, so in the
case of personnel, we have money in the right places for the
unit's requirements to train up. In the case of operations, I
have a couple of examples where the corps commanders, in
talking with some of the units they are going to join in the
Balkans have not, in all cases, approved training activities,
so I am working some individual issues, and if you would like,
I will provide detailed account of what that means to us.
What I am saying to you today is that the investment
Mississippi has made in the training rotation now for this
unit, I will find the resource so they do not pay a penalty for
being part of the mission set that we did not properly
resource, so that is an obligation that I carried to fix a
piece of an issue down there with regard to an operations fund
redistribution.
General Davis. Senator, I am certain you are aware, when
that was the National Training Center, the superb job they did
out there at the time as a result of the kind of training we
got in preparation for that. A lot of that training will be
residual in the sense that it will hold over because these
soldiers will have been through a really dynamic training
environment out at the National Training Center at Fort Irwin,
and they will not have to train nearly as hard in terms of the
basic skills.
Now, proficiency, yes, they will have to get up to speed on
proficiency and that kind of thing, and they will do that with
great regularity as they walk through this. We call it the Road
to Bosnia, these milestones they go through, and the training
chart you saw that takes you through the different training
events.
Senator Cochran. Well, we are very proud that they are
going, and we know the employers have been briefed, and we are
hopeful that that can all be a model for deployments in the
years ahead. We are proud of those who are serving from our
state.

C-17 CONVERSION

One other thing we are very proud of in Mississippi is that
the Mississippi Air National Guard in Jackson will be the first
unit in the Nation to convert from the C-141 transport aircraft
to the modern C-17. You mentioned that, General Weaver, in your
opening statement, and we appreciate the attention that is
being given to preparing for that transition.
We know there are some infrastructure requirements, and we
are worried a little bit about the pace of that, whether the
funding is being made available and enough work is being done
so that when that date comes, the people will be trained to fly
the aircraft and to maintain them, and will have the facilities
to do that and we will not have to wake up one morning and say,
well, they are not ready, we are going to postpone this. Can
you tell us something of your impression of the timetable, and
are we meeting the targets? Do we need additional funds in this
bill to help do that?
General Weaver. Right up front, sir, this needs to be a
template for all of our C-17 conversions, which I know we will
have more than just Jackson following and stepping up to the C-
17 requirement. It is an outstanding aircraft. We are pleased
and honored to have that in the Air National Guard, and
especially at Jackson as we look at Air National Guard
installations for a beddown location, so that is why the
importance of this being a template right there at Jackson.
We have got some financial concerns. This is the first time
in our history that we have undertaken a conversion, not of
this size, but of this nature. That is, a brand-new aircraft
coming right off the line, right into an Air National Guard
unit. We have done it with F-16's, but not one of this nature,
of a large aircraft, so there were unexpected and unforeseen
challenges we in the total force have uncovered between now and
the time that we want to get Jackson fully stood up.
The O&M part I am not as concerned with as I am about the
military construction requirements, to have everything in place
for the arrival of these first C-17's, so I do believe that
yes, we will need some additional help, but I believe that on
the O&M side, as far as the training, I believe we can work
that within the Air Force community itself, but on the military
construction side, we will need some help, sir.

MILITARY CONSTRUCTION REQUIREMENTS

Senator Cochran. Well, I hope you will provide for the
record what you need specifically and what your needs are
exactly. I have some notes that indicate some of the
possibilities, but it would be really helpful.
General Weaver. I will submit that for the record.
[The information follows:]

Military Construction Requirements

The first project supporting this beddown was an fiscal year 2000
Congressional add. The remaining program is phased over fiscal year
2001-04 to keep the existing C-141 mission operational until the C-17s
are ready. The additional projects are as follows:

[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal Year Project Title Cost Status
----------------------------------------------------------------------------------------------------------------
2000.......................... C-17 Flight Simulator Facility..................... $3,600 Construction
2001.......................... C-17 Corrosion Control/Maintenance Hangar.......... 12,200 Design
2002.......................... C-17 Facility Conversion........................... 16,500 FYDP
2003.......................... C-17 Fuel Cell Hangar and Shop Upgrades............ 25,000 FYDP
2004.......................... C-17 Maintenance Training Facility................. 4,100 FYDP \1\
C-17 Short Field Runway (Camp Shelby).............. 9,000 ( \2\ )
C-17 Upgrade Corrosion Control Facility............ 5,700 ( \3\ )
----------------------------------------------------------------------------------------------------------------
\1\ This project is late to need. $15 million in equipment was appropriated in fiscal year 2001 for a fiscal
year 2003 delivery. The supporting facility should be funded in fiscal year 2002 to be ready when equipment
arrives.
\2\ The shortfield runway is required in fiscal year 2004, but is not shown in that year of the Future Years
Defense Plan (FYDP) due to the limitations associated with the fiscal year 2001 Senate Armed Services
Committee (SASC) language that reduced the ANG FYDP size.
\3\ Discussions are underway for development of a regional aircraft paint facility (corrosion control). This
total force capability requires additional construction which is currently unfunded. The project could be
executed as early as fiscal year 2002 if funds were available.

A related project that supports maximum utilization of this new C-
17 aircraft is an Expeditionary Forces Center, $7.5 million. This
deployment complex is currently programmed in fiscal year 2008 and
would support the outload of troops and equipment from Jackson,
Mississippi (MS).

FULL-TIME MANNING

Senator Cochran. I understand also that there is, I think
we made a statement, or heard a comment about the full-time
support of units to people back at the armories. I think
General Schultz mentioned this. There is a shortfall in the
support manning in the Army National Guard. Is this true as
well in the Air National Guard?
General Weaver. Not to the extent as in the Army, sir, but
we do have a shortage of full-time personnel. What we were able
to do, what Secretary Peters at that time and General Ryan
allowed us to do in the Air National Guard is reengineer our
Air National Guard to where we had units that were not wartime-
tasked, that were not as required by our scenario, to
reengineer those units into units where we really need them,
whether it be on the flying line or air crew members. We were
able to increase our duration, because of this reengineering
effort.
We are presently working with the Air Force, an increase in
full-time manpower through the future years defense plan
(FYDP), bringing them in at a rate we are able to deal with in
the total operating authority (TOA) of our Air Force, and so it
is not as critical as I know of in the Army Guard, but as we
step up to these additional taskings, such as the C-17, where
it is required, where we will have an operations tempo equal to
that of the active duty force, we will be looking for full-time
increases.

C-17 AIRCRAFT AT JACKSON, MISSISSIPPI

Senator Cochran. One observation about a recent report. I
understand General Robertson, Commander of the Air Mobility
Command, and former Secretary of the Air Force, Peters, were on
a trip recently suggesting that it would be better to have
eight C-17 aircraft located in Jackson rather than six.
General Weaver. Sir, I probably would not say this if I
were not retiring, but I would say eight is what we have found
to be economically correct, but I would venture to say that
additional aircraft would also be beneficial as well, if we in
our concept will be operating these aircraft at the same pace
as the active duty force.

MANNING REQUIREMENTS

Senator Cochran. General Schultz, the exact manning
requirements, I am told, in Mississippi have a shortfall of
over 1,600, which is 40 percent full-time, talking about full-
time support personnel. That is a big problem, it sounds to me.
General Schultz. It is. We have across the Guard today, of
our Active Guard and Reserve soldiers, 51 percent staffing of
our requirements. The military technicians are a little higher
than that.
Of course, when you look across the country it rolls up to
a fairly significant number, so we have agreed with the Army
staff over time to begin replacing those requirements. If you
look at why we are in this condition today, over the last 10
years we have just simply lost full-time staffing over the
years, save the last two, where the Congress came in and said,
this is not right, we are going to help you recover, and so we
have begun to recover but not nearly so fast as we would hope,
and certainly when you hear from the states, units in the
states, they are the ones suffering, clearly, on a day-to-day
basis.
Senator Cochran. Thank you, Mr. Chairman.
Senator Inouye. Senator Leahy.
Senator Leahy. Thank you, Mr. Chairman. To add to Senator
Cochran's question, we love it when someone who is retiring
testifies, because sometimes they get very candid, and I tend
to agree with you on that. I suspect Senator Cochran does, too.
This year I became co-chairman of the Senate National Guard
Caucus, and I am going to be working with my fellow chair,
Senator Bond, on some of these issues.
I would have been here the whole meeting but we have been
having an issue of nominations to the Department of Justice,
and we are holding a hearing upstairs, and I know Senator Hatch
was probably terribly disappointed when I had to come down
here.

HEALTH INSURANCE

But I did have some questions. General Davis, you and I
have chatted before, but not on this particular issue. I am
worried about health insurance for members of the Selected
Reserve. I am told thousands of members of the Selected Reserve
do not have health insurance, and I have heard about members--
and this is anecdotal, but I think it happens all over the
country--members of the Reserve components staying back from a
deployment because they have failed their health screening.
Now, you have got an obvious issue, that of readiness, but
I think there is also one of fairness. If the Selected Reserve
is serving side-by-side with the active duty, it is very, very
troubling to me if we are unable to guarantee health coverage
of everybody defending the Nation. As Senator Inouye and others
have brought out, we seem to be deploying a lot more these
days. When we got these reports I just assumed everybody had
health coverage, and I am wondering if there are programs such
as TRICARE that we could extend to the Reserve. What do we do
about these shortfalls in health insurance?
General Davis. Well, I might just start by making a
statement. In one of our States they did a survey and they
found a significant number of people, 30 percent, I believe,
did not have health insurance.
What happened apparently a few years ago was, many
companies decided that they would either get pay raises or
increases in benefits, sustain the benefits, and a number of
people opted to take the money, presumably to buy their own
insurance and give up the benefit, but we have a large number
of people who do not have any insurance at all, and in this
particular State, his survey, he worked it where a number of
people who responded said they would almost give up their drill
pay, their weekend drill, for health insurance. It is very,
very expensive in some areas, and certainly if you buy it on an
individual basis. I used to be in the health insurance business
a number of years ago, sir.
But it is something that I think we do need to cure. It
manifests itself a couple of different ways, as we were
talking, Senator Cochran was talking about. The training
schedule for these people, there are breaks in the--they are on
duty for 4 days, and then they are off-duty, then they are on-
duty again for another period of time maybe 2 weeks later, or 3
weeks later.
The difficulty is, if something happens to them physically
during that time, or medically, they are not covered. If it
happens during a duty period, they are covered, but during the
days when they are not, they are not covered.
Our laws historically have been written to cover the
Reserves primarily for a major mobilization of 30 days or more,
or whatever. Many of the laws cover you if you are on 30 days
or more, or more than 30 days, I believe, and so if you are on
less than that you do not get full coverage for your family and
everything else, so there are some inequities, particularly in
terms of how we are utilizing the National Guard and the
Reserve in today's environment.
My caveat would be, Senator, there is a bill that goes
along with that, and none of us knows exactly what it is.
Senator Leahy. Is that being looked at, though, I mean,
some of the possible options in here?
General Davis. We are trying to work with a number of
staffers, I believe. General Smith of Ohio is an individual
case in point, and I know he is working with a number of--two
or three members, I believe, at least one I know for sure and I
think two others, and their staff, to look at what the cost
might be for that. No numbers are available. The Adjutants
General as a group have adopted that as a posture, and I think
we will see some more activity like that.
Senator Leahy. It is troublesome to me, and I know there is
a lot of cost involved, but we either have them really
available or not, and this may be part of it.

AIRCRAFT UPGRADES

Another area, General Weaver, the Air Guard flies over 500
F-16's, and most of them are either Block 25 or 30 versions.
They look great and all of that, but they are getting old, and
I am concerned that some of the operation costs keep going up,
the mission-capable rates go down, and so you are kind of in a
lose-lose situation. I am wondering what additional plans the
Air Guard has to upgrade the F-16.
General Weaver. We could put F-22's at all of our----
Senator Leahy. Actually, I had not thought of that. It
depends upon where they get assigned.
General Weaver. Thanks to this body here, what is called as
the Guard and Reserve Equipment Account (GREA), what we have
been able to do with what you have assisted us in doing in the
Guard and Reserve Equipment Account, we took the entire F-16
fleet, Block 25's, 30's, and 32's, and made them combat-
capable. We did the Cupid mod. We are doubling their life.
These F-16's in the Air National Guard are as capable as the
active duty's Block 40's and 42's, thanks to this committee for
all of that support in the Guard and Reserve Equipment Account.
It was only even just 4 short years ago where we had all of
those F-16's, all 500 plus, and we could not go to war with
them because we did not have the capability, and you all made
that happen, and I cannot thank you enough, nor can those air
crew members who fly them, especially when they are in Northern
Watch and Southern Watch, and our active duty counterparts see
these aircraft with all that we have on them, not only the
Cupid mod, but all the PGM, the lightning pods on them, and as
we look forward to the advanced targeting pad (ATP) pod as
well, the situational awareness data link (SADL).
These are full-up F-16's, and extremely well-maintained,
and so my take on the future of our Block 25's, 30's, and 32's,
the health of our fleet is good.
Could we use more? Absolutely. We are looking at attrition
Reserve total force problem in some of our blocks, and we own
some of those blocks, so yes, I would encourage future buys for
our Air Force of F-16's. From my perspective that would trickle
down additional aircraft for the Air National Guard and Air
Force Reserve.
But sir, what you have been able to do for our F-16 fleet
is nothing short of outstanding.
Senator Leahy. I do not want to risk sounding at all
parochial, not that anybody on this committee is ever asked a
parochial question, but we do have F-16's in Vermont. I have
checked them out personally, Mr. Chairman. I flew in one. That
was before the Army, General Schultz talked me into a moment of
weakness last year, or actually about 3 months before the
Golden Knights were coming to Vermont.
They were coming to Vermont to do something with the
Vermont National Guard, and somebody called me up and said, by
the way, they have this program called a tandem jump, and you
can jump with them, you do not really have to know much of
anything, which is the first clue, how they get volunteers, and
they said, why don't you jump with them, and I said OK, I would
be glad to do it, thank you very much.
It is fine 3 months out, but it comes to about 30 minutes
out from it, and I am wondering about this, but a very good
man, a young sergeant, Marc Hoque, in the Army, a former
marine--our son, who is a former marine, also named Mark, made
me feel confident. We spent about 20 minutes strapping
ourselves together, double-checking, we go up a couple of
miles, look out the door, and I said, does that look like the
fairground we are supposed to land on? I go, yep. Nervous--
Nope--and out we went, had a great time.
We land, and he says, here, I'll unhook you. He goes snap,
snap, and I said, that's it? That is all it took, just two
quick snaps like that and you could have dropped me on the way
down. He said, well, no, sir, I would not have done that, that
would be a bad career move.
I said, your career or mine?
But at any rate, I cannot wait to do it again. My staff can
wait. I cannot.
But the serious question, General Schultz, we have UH-60
Blackhawks up in Vermont, and there is a vast improvement. Over
the old UH-1 Hueys. I know how hard they work to maintain them,
but I got frightened just seeing our men and women flying them,
because of what might happen. The Blackhawks are much, much
better, of course. Everybody in Vermont was thrilled. My 3-
year-old grandson even recognizes them by the silhouette when
they fly by our home. He will say, ``that is a Blackhawk.''
But a lot of the Guard units are still flying the old Hueys
and Cobras. I am worried about the safety of them, but I also
worry about the Guards ability to carry out its State mission.
As you know, one of the great things about the Guard is that
when something happens in your State, a rescue mission, a
natural disaster, something like that, the Governor is on the
phone immediately to the Adjutant General saying, ``we need
help.'' It looks to me like about 300 Blackhawks short around
the country.
I am wondering what is happening. Are we planning to add
more? Are we working on adding more? How do you retain the
mechanics? How do you keep the training? How do you get young
pilots to stay in and spend their time doing that?
General Schultz. The short answer is, Senator, we have a
need for Blackhawks in the Guard. We have Legacy aircraft. You
mentioned both of them. That would be the Cobra and the Huey.
We have 94 Hueys that fly in the Army Guard today. That is out
of 400-plus air frames. The safety flight message on the rotor
mast assembly is primarily the reason.
In our current plan, we are working right now on how to
literally field the aviation modernization plan, and the Chief
of Staff should make a decision very shortly on the
implementation of that mod plan, and as we talk about this
modernization plan, I just simply offer that we have seven
States with no modern aircraft.
No modern aircraft means Hueys and that generation of
systems, and so it is our idea, (1) to accelerate the fielding
of Blackhawks, and we can use your help in that regard, and our
other idea is that every State and territory would have modern
systems. For us that would be at least the Blackhawk or the CH-
47.
So we will retire the Cobras over time, we will retire the
Hueys in the next couple of years, but as we retire the Hueys,
one of the obligations that I carry is to have aircraft,
literally, systems for the crews to maintain and the pilots to
fly, and we come up short on that today.
So there will be a period, while we talk about moving some
Blackhawks from active units, there will be a period where we
have to rebuild those air frames to get them ready for
redistribution to Guard units, and of course a part of our
master plan is that we buy more Blackhawks than we currently
have in the Army budget, and so we can use your assistance with
that plan, but over time, it is the idea that we modernize the
fleet, and accelerating the distribution is in our interest, I
think.

COMPUTER ATTACKS

Senator Leahy. I will put my other questions in the record,
except for one. General Davis, we have an information
operations unit in Vermont. I feel one real threat we face,
both on the civilian side and on the military side, are
computer attacks, and oftentimes we do not know where they are
coming from, but we know how devastating they can be.
I think the Guard is the perfect organization to have this
mission because, as you know, it has helped us in my State. We
have had a number of high tech companies, International
Business Machines (IBM) and others who have helped us retain
some of these people. The Guard members are getting the basic
Guard salary, and, more importantly, a real sense of
patriotism. I am wondering if we will have a formal training
apparatus to train both the Reservists and active duty to carry
out this information mission? Just think where we were 50 years
ago. We would not have had to think of something like this, but
today it is a major one.
General Davis. Well, sir, we have in both the Army Guard
and the Air Guard units that we have stood up in this
information operation area. In response to that, the fact that
we have young people who work in civilian jobs, many of them,
and they work in much higher tech areas than we have available
in the United States military--as a result of that, we have
been able to tap into some of those talents.
In the Army we are working with the Land Information
Warfare Agency down at Fort Belvoir, and in the Air Guard we
are working with the Air Force Intelligence Agency, and I would
like to ask General Schultz if he would comment on the Army,
what we are doing there, and General Weaver, if he could
comment on the specifics of some of the things we are doing in
the Air Guard.
General Schultz. We have in each State developed a small
team, computer emergency response teams. We have today trained
921 members within the Army Guard, Active and Reserve. A number
of them have trained at one of your schools, Center of
Excellence, by the way, and so what we are saying is, there is
a capability--I think reinforcing your point, there is a
capability inside the Guard today that clearly is perfectly
suited for the risk that we might have as we rely more and more
on networks and technology and so on, so we are working this
initiative, and the Army has today just simply outlined our
role as one of the leaders.
Senator Leahy. Well, the President was up recently at the
meeting of the hemisphere leaders held in Quebec City. I know
we are very active in Burlington with the Guard in monitoring
all of the various Internet sites to look out for hackers,
which I find very interesting. You are going to be able to
attract some of the people in the next generation, the people
who really want to stay there.
Mr. Chairman, you have been more than indulgent with me in
allowing me to go way beyond my time. I appreciate it. I will
submit the rest for the record. I think the witnesses will find
that over the years this has not been the most unfriendly
committee that you come to, but I also appreciate your help,
and I feel honored to be with Kit Bond on the Guard Caucus.
Thank you.
Senator Inouye. Thank you very much.
Senator Bond was unable to be here today, and asked that
his statement be placed in the record.
[The statement follows:]

PREPARED STATEMENT OF SENATOR CHRISTOPHER S. BOND

Mr. Chairman: Thank you for holding today's hearing and
inviting the Guard and Reserve Chiefs to testify. Those of us
who work defense issues have known for some time that the
increased operations tempo of our Active forces has had an
equal if not greater impact on our Guard and Reserve Forces.
As co-chair of the Senate Guard Caucus and a former two-
time governor who had to rely on the ability of Missouri's
National Guard to respond at a moments notice to a state
emergency I am extremely concerned about the current state of
readiness within our Guard and Reserve forces.
No matter where we look we seem to find alarming statistics
denoting a serious decline in the state of readiness of our
forces. For today's hearing I could have asked a myriad number
of questions dealing with a broad range of issues; from the
serious backlog in Military Construction projects for all the
Guard and Reserve components; to the severe shortage of full-
time manning for the Guard; to the lack of adequate basic
equipment such as SINCGAR radio sets that enable our ground
forces to talk with secure voice capability to one another; to
the dismal state of affairs with Army Aviation Modernization;
to the troubling state of our KC-135E tanker forces which are
vital for supporting extended operations such as we see in the
Pacific region; to the need for C-40 modernized air logistics
assets for the Navy and Naval Reserve. The list goes on and on
and on.
I intend to do my best to support the Administration and
the Secretary of Defense as he prepares to outline the findings
of his strategic assessment. It's important to note that
whatever plan is developed the reliance of our Active forces on
the Guard and the Reserve is at an all time high and it's
inconceivable that we can continue to ask so much of our Guard
and Reserve forces while at the same time we are not adequately
resourcing these components to do the job they've been given.
It is a sad state of affairs. We ask our citizen-Soldiers,
Airmen, Marines, and Sailors to contribute in both the civilian
and the military sector and when we inadequately resource them
for the military missions they've been given we put them at
much greater risk.
In peacetime especially it is ludicrous to put our most
precious resources, the men and women who serve in both our
Active and Reserve components, at undue risk but after what
I've seen this is exactly what we're doing and something has to
be done about it. Let me give you just one example of why I'm
troubled. Colonel Michael Ledbetter, currently serves as the
State of Missouri Aviation Officer. In this position he
oversees all Army Guard aviation operations and training. In
his words the state of Missouri's Army Guard aviation fleet is
the worst he has seen in over 30 years of operation dating back
to the 1968 time-frame when he served in Vietnam.
In Missouri we have almost 200 pilots tasked with
performing both state and federal missions and I'm told they
have five attack helicopters, five utility helicopters, and
three operational observation helicopters for use, but that out
of this fleet on any given day we might get a total of only 7
aircraft up for flight. The condition of our fleet has been
plagued with flight groundings and safety of use messages
limiting operations for the past 24 months. With every safety
of use message comes a set of inspections and more aircraft
failing those inspections. The bottom line is we're working
with an outmoded and aging fleet and the prospects for
replacement aircraft are grim. This situation not only impacts
readiness but safety as well. This is not satisfactory.
Mr. Chairman, this is just an example of the declining
state of readiness of our Guard and Reserve forces. Our men and
women deserve better and I'm going to do all I can to ensure
they're given adequate resources to do their job.
I want to thank the Guard and Reserve Chiefs for testifying
today. Please extend to the men and women you serve with my
most heartfelt thanks for their devotion to duty. You have my
utmost respect and admiration.

Senator Inouye. Gentlemen, as you know, three subcommittees
are presently meeting, and as a result we have had several
requests from Members wishing to submit questions, so you will
be receiving questions from us for your response.
We have a problem before us. The best information advises
us that DOD will be submitting their supplemental request about
the end of this month, hopefully, and the strategic review
should end sometime in June. It may take 30 to 45 days to come
up with numbers, and if that is the case, we will be receiving
the budget request at the end of July. In August we are in
recess. In September, we have to act on the budget.
My concern is that in that mad rush the Reserves and the
Guard may be left out. Therefore, I believe I speak for this
committee. Will you please provide us first your wish list for
what is necessary to make you compatible? Of course, all the
services are now going through this transformation, or
modernization program, and if you are going to serving us the
way you have, then you have to have compatible equipment and
communications.
Second, and most importantly on the supplemental, obviously
you have a shortfall not just in personnel, but because of the
frequent contingency deployments, you are bound to have
shortfalls in other areas.
We would like to have that in our hands if we can at the
earliest, because otherwise you are going to be caught in the
mesh of all the other supplemental requests. If you have other
matters you would like to bring to our attention, please take
advantage of us, otherwise you are going to be lost.
[The information follows:]
Equipment and Communication
Please see attached.

ANG FISCAL YEAR 2002 AIRCRAFT MODERNIZATION REQUIREMENTS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Units in Fiscal Fiscal Year
Aircraft Modernization Requirements Year 2002/Total 2002 Fiscal Year Contractor States Affected by
Required Requirement 2002 Total Procurement
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
A-10 PE #27131................ A-10 Re-Engine.................................. Prgm Start Funds... $8,000,000 .............. TBD--G.E.; P&W; RR............. CT, ID, MA, MD, MI, PA
A-10 Precision Engagement Program............... Prgm Start Funds... 17,000,000 .............. Lockheed Martin, Owego, NY.....
A-10 ALR 69 Antenna Optimization................ 51 of 102 reqd..... 1,650,000 .............. Marconi USA, Lansdale, NY......
A-10 Helmet Mounted Cueing System (HMCS)........ Prgm Start Funds... 5,000,000 .............. Vision Systems Intl, San Jose,
CA.
$31,650,000
B-1 PE #51628................. B-1B Beyond Line of Sight (BLOS) Data Link...... 9 of 18 reqd....... 22,500,000 .............. Boeing, St. Louis, MO.......... GA, KS
B-1 Defensive Systems Upgrades.................. 18 of 18 reqd...... 6,600,000 .............. Boeing/Raytheon, St. Louis, MO.
B-1B AVTR (Airborne Video Tape Recorder)........ 18 of 18 reqd...... 2,000,000 .............. Boeing/L3 Comm, St. Louis, MO..
31,100,000
C-130 PE #54332............... C-130 Armor..................................... 168 of 168 reqd.... 25,200,000 .............. LAST Armor, Waltham, MA........ AK, AR, CA, DE, HI, ID,
C-130H2 APN-241 Radar........................... 101 of 101 reqd.... 54,500,000 .............. Northrop Grumman, Linthicum, MD IL, IN, MD, MI, MO, NC,
C-130H2 NVIS (Night Vision Imaging System) Light- 104 of 104 reqd.... 13,500,000 .............. EER Systems, Chantilly, VA..... NV, NY, OH, OK, PA, PR,
ing. RI, TN, WV, WY
C-130 Situational Awareness Data Link--SADL..... wire 220/equip 110. 6,000,000 .............. Raytheon, Fullerton, CA........
EC-130J Wideband Satellite Connectivity (WSC) 6 of 6 reqd........ 6,000,000 .............. Boeing, Seattle, WA............ PA
Sys- tem.
105,200,000
F-15 PE #27130................ F-15 AIFF (Advanced Identity Friend/Foe)........ 126 of 126 reqd.... 25,160,000 .............. TBD--BAE; Raytheon; Litton..... OR, FL, LA, MA, MO, HI
F-15 Aircraft Video Recording System (AVRS)..... 126 of 126 reqd.... 5,800,000 .............. Vision Systems Intl, San Jose,
CA.
F-15 Tactical Electronic Warfare Systems (TEWS)-- Prgm Start Funds... 14,500,000 .............. TBD--Orbital; L3 Comm; Litton;
3600 RDT&E. TEAC.
45,460,000
F-16 (Blk 25/30) PE #27133.... Targeting Pods.................................. 26 of 81 reqd...... 40,000,000 .............. Northrop-Grumman, Rolling AL, AR, AZ, CA, CO, IA,
Meadows, IL. IL, IN, MD, MI, MN, MT
ND, NJ, NY, OH, SD, TX,
VA, VT, WA
F-16 Color Displays............................. 202 of 365 reqd.... 25,000,000 .............. Honeywell, Albuquerque, NM.....
F-16 Advanced Central Interface Unit--ACIU...... 213 of 365 reqd.... 8,000,000 .............. EFW, Ft Worth, TX..............
F-16 Heads Up Display Electronics Unit--HUD EU.. 214 of 365 reqd.... 12,000,000 .............. BAE Systems, Ft. Worth, TX.....
F-16 ALR-69 Antenna Optimization................ 180 of 180 reqd.... 8,300,000 .............. Lockheed Martin, Ft. Worth, TX.
F-16 Pylon Integrated Dispenser System (PIDS) 81 of 342 reqd..... 5,000,000 .............. Lockheed Martin/Terma
Universal. Elektroniks, Ft. Worth, TX.
F-16 Helmet Mounted Cueing System (HMCS)........ Prgm Start Funds... 5,000,000 .............. Vision Systems Intl, San Jose,
CA.
F-16 AIFF (Advanced Identify Friend/Foe)........ Prgm Start Funds... 2,500,000 .............. BAE Systems, Greenlawn, NY.....
105,800,000
F-16 Blk 42 PE #27133......... F-16 Block 42 Re-Engine......................... 23 of 49 reqd...... 98,000,000 .............. Pratt & Whitney, West Palm IA, OH, OK
Beach, FL.
98,000,000
HH-60-1 PE #53114............. HH-60G ALR-69................................... 20 of 20 reqd...... 10,000,000 .............. WR-ALC, Robins , GA............ AK, CA, NY
HH-60 Situational Awareness Data Link--SADL..... 18 of 18 reqd...... 900,000 .............. Raytheon, Fullerton, CA........
10,900,000
KC-135 PE #41218.............. KC-135E to R Conversions........................ 16 of 88 reqd...... 352,000,000 .............. Boeing & G.E., Wichita, KS..... AZ, CA, IL, KS, ME, MI,
.............. NJ, PA, TN, UT, WA
KC-135 Situation Awareness Data Link--SADL...... wire 224/equip 112. 6,100,000 .............. Raytheon, Fullerton, CA........ NY, OH, PA, TN, UT, WA,
WI
358,100,000
SAOC PE #64754................ Joint Tactical Information Distribution System 5 of 5 reqd........ 2,500,000 .............. BAE Systems/Rockwell, Cedar FL, NY, WA, HI, PR
(JTIDS). Rapids, IA.
2,500,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NEW ACQUISITIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Units States Affected by
Aircraft Modernization Requirements Required Unit Cost Program Cost Contractor Procurement
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
C-17.......................... Replaces aging/retiring C-141s......................... TBD $184,000,000 TBD Boeing, Long Beach, CA............ AK, CA, MS, HI
F-16C......................... Equips the AF with new jets; ANG gets trickle-down..... 18 31,444,000 $565,992,000 TBD............................... SC, plus 2 states TBD
C-40C......................... Supports Congressional, DOD, Air Force missions........ 3 69,000,000 207,000,000 Boeing, Seattle, WA............... DC
C-130J........................ Completes conversion of 143AW, RI and 146th AW, CA..... 15 70,000,000 1,050,000,000 Lockheed Martin, Marietta, GA..... CA, RI
EC-130J....................... Completes conversion of 193rd SOW, Harrisburg, PA...... 3 93,000,000 279,000,000 Lockheed Martin, Marietta, GA..... PA
C-37 Aircraft................. Supports Congressional, DOD, USAF missions............. 2 46,000,000 92,000,000 Gulfstream Aerospace, Savannah, GA DC
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FISCAL YEAR 2000 UNFUNDED REQUIREMENTS LIST
----------------------------------------------------------------------------------------------------------------
APOM
Units Ttl New Fiscal ANG
NEW ACQUISITIONS Required Unit Cost Program Cost Acquisition AF POM Year Critical
Cost 2001 List
----------------------------------------------------------------------------------------------------------------
F-16............................ TBD $27,000,000 TBD ............ Yes No No
C-130J-30 Stretch............... 5 58,400,000 $292,000,000 ............ Yes No No
EC-130J......................... 2 90,000,000 180,000,000 ............ Yes No No
C-22 Replacement................ 3 56,500,000 169,500,000 ............ No No No
C-38 A/C 3&4.................... 2 15,000,000 30,000,000 $671,500,000 No No No
----------------------------------------------------------------------------------------------------------------

FISCAL YEAR 2000 UNFUNDED REQUIREMENTS
----------------------------------------------------------------------------------------------------------------
APOM
SUSTAINMENT & SUPPORTABILITY Units Ttl Support Fiscal ANG
ITEMS Required Unit Cost Program Cost & Sustain AF POM Year Critical
Cost 2001 List
----------------------------------------------------------------------------------------------------------------
Mobile Air Fire Fighting System 5 $2,000,000 $10,000,000 ............ No No No
(MAFFS)........................
C-141 8.33 MHZ Radios........... 6 200,000 1,200,000 ............ No No Yes
HC-130 Floor Armor.............. 6 125,000 750,000 ............ No No No
C-130 Floor Armor............... 12 110,000 1,320,000 ............ No No No
LC-130 Upgrade.................. 4 1,250,000 5,000,000 ............ No No No
Tactical Air Control Party 15 552,000 8,280,000 $472,050,000 Yes Yes No
(TACP)/Air Support Ops Squadron
----------------------------------------------------------------------------------------------------------------
Upgrades F-100PW-100 Engine Cores to -220E. Completes F-16s (27; completes F-15 A/B (270 with spares. This
program improves performance, reliability, and corrects the #1 safety issue in F-16's.

The following is the Air Force Reserve Command's list of unfunded
miscellaneous operational equipment for fiscal year 2002 (as of: 24 May
2001).

AIR FORCE RESERVE COMMAND (AFRC) FISCAL YEAR 2002 EQUIPMENT REQUIREMENTS LIST
[Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Priority Fiscal year 2002 Req'd Qty/ Remaining
No. Requirements Total Required Qty/Cost Cost Remaining Qty Req'd Cost Unit Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
1C-141 Life Extension/Replacement 45 ac/932.................... None......................... 45 ac................. $932 $20.711
2C-130 Js 4 ac/$290.8.................. 2 ac/$145.4.................. 2 ac.................. 145.4 72.7
3KC-135 R Engine Kits 16 kits/$432................. 2 kits/$54................... 14 kits............... 378 27
4F-16 D Model SADL Installation 10 kits/$0.3................. 5 kits/$0.15................. 5 kits................ 0.150 0.03
5F-16 Color Displays 72 units/$15................. 23 units/$4.8................ 49 units.............. 10.2 0.208
6Tactical Radios (SCOPE SHIELD II ) 82 sets/$8.5................. 41 sets/$4.25................ 41 sets............... 4.25 0.104
7F-16 Helmet Mounted Cueing System 80 sets/$20.6................ None......................... 80 sets............... 20.6 0.258
(HMCS)
8Survival Radios (PRC 112, GPS- 30 units/$0.6................ 30 units/$0.6................ None.................. ( \1\ ) 0.02
Capable)
9F-16 Pylon Integr Dispens Sys 50 mods/$3.0................. 50 mods/$3.0................. None.................. ( \1\ ) 0.06
Universal Upgrade
10B-52 Bomber Enhanced Tactical 8 sets/$2.0.................. None......................... 8 sets................ 2.0 0.25
Interface
11KC-135 Auxiliary Power Unit Boost 16 units/$0.32............... 16 units/$0.32............... None.................. ( \1\ ) 0.02
Pump
12HH-60/C-130/KC-135 Carry-on SADL 67 kits/$3.685............... None......................... 67 kits............... 3.685 0.055
13C-130 Spray Paint Booth 1 booth/$0.565............... 1 booth/$0.565............... None.................. ( \1\ ) 0.565
14Motor Vehicles For Med UTC's (Multi- 44 veh/$2.42................. 34 Veh/$1.87................. 10 veh................ 0.550 0.055
Yr)
15Snow Removal Vehicles 7 veh/$1.2................... 7 veh/$1.2................... None.................. ( \1\ ) 0.171
16Land Mobile Radios (Multi-Yr) 10.5 bases/$7.83............. 5.5 bases/$4.08.............. 5 bases............... 3.75 0.746
17Intrusion Detection System (Multi- 10 bases/$4.125.............. 5 bases/$2.063............... 5 bases............... 2.063 0.413
Yr)
18Hydrant Fueling Trucks 9 trucks/$1.4................ 9 trucks/$1.4................ None.................. ( \1\ ) 0.156
19Next Generation Nvg's 100 sets/$1.5................ None......................... 100 sets.............. 1.5 0.015
20Truck Tractors 10 trucks/$0.770............. 10 trucks/$0.77.............. None.................. ( \1\ ) 0.077
21Utility Truck (44) 5 trucks/$0.152.............. 5 trucks/$0.152.............. None.................. ( \1\ ) 0.03
22Flightline Video Surveillance 6 systems/$1.01.............. 3 systems/$0.505............. 3 systems............. 0.505 0.168
System
23F-16 Advanced Central Interface 72 kits/$6.6................. 72 kits/$6.6................. None.................. ( \1\ ) 0.092
Unit--Upgrades
24C-5A Re-Engine Kits 32 kits/$1,176............... None......................... 32 kits............... 1,176 36.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Cost Required: $2,912.4 million.
Total Cost Required for Fiscal Year 2002: $231.8 million.

AFRC UNFUNDED MISCELLANEOUS EQUIPMENT LIST (FISCAL YEAR 2002)

Priority #1
Description.--Currently the AFRC C-141 fleet is due for retirement
in fiscal year 2006. Because of this, many operational deficiencies are
not being addressed. Upgrades such as the 8.33 kHz radios are required
to meet DOD's mandated Global Air Navigation System/Global Air Traffic
Management requirements. The issue becomes how can the AFRC C-141 fleet
continue to support strategic lift requirements globally. The AF has to
address the issue of either extending the life for C-141 or provide an
alternative replacement mission.
Impact to Readiness.--Currently there is no follow-on mission
planned for AFRC C-141 fleet. AFRC will not be able to fully meet its
role in the AEF concept.
State/Base.--Ohio, Wright-Patterson AFB; Maryland, Andrews AFB;
California, March ARB.

Priority #2
Description.--Procures 4 additional C-130J's to complete the
conversion of the 403rd Airlift Wing at Keesler AFB, MS. In order for
the unit to be operational it needs a total of 8 aircraft. The 403rd
currently has 4 aircraft on the ramp and needs 4 more to complete. AFRC
originally had the additional 4 C-130J's supported by the AF however
the AMC road map is presently being updated and may move aircraft
further into the future.
Impact to Readiness.--The lack of assets will translate to
inadequate training and ineffective operational capability.
State/Base.--Mississippi, Keesler AFB.

Priority #3
Description.--Replaces all ``E'' model engines with ``R'' model
engines; provides larger flight control surfaces, improved landing gear
and brakes. Includes kits and installation. Total AFRC requirement is
16 kits for 16 aircraft at approximately $27 million each kit.
Impact to Readiness.--Current ``E'' model engines are old, are
limited because noise abatement fines. They are more expensive to
operate and do not offer fleet commonality for theater or AEF
deployment.
State/Base.--Michigan, Selfridge ANGB; California, Beal AFB.

Priority #4
Description.--Provides the internal wiring and data link radios for
use by F-16 D aircraft, the training version, for battlefield
situational awareness. Recent real-world and peacetime incidents of
fratricide have proven the need for a battlefield identification
system. SADL will provide the AFRC F-16 fleet with a capability to work
with other USAF units as well as U.S. Army units in close combat while
minimizing the potential for fratricide. This will tie into the Army's
Digital Battlefield.
Impact to Readiness.--Increased situational awareness increases
both mission continuity and survivability while reducing incidents of
fratricide during real-time operations and brings a true combined arms
capability to the combat arena.
State/Base.--Texas, Carswell Ft. Worth; Utah, Hill AFB; Florida,
Homestead ARS; Arizona, Luke AFB.

Priority #5
Description.--Current AF Reserve F-16 Block-30 aircraft use
monochrome (black and white) displays. Hi-definition color Multi-
Function Displays will enable the F-16 to capture more precise,
informative pictures thus improving interpretation, advancing
situational awareness, and increasing visual accuracy for target
recognition with electro-optical weapons and targeting systems.
Impact to Readiness.--Existing F-16 Block 30's displays are black
and white, old, and spare parts are unsupportable. Current displays
will not be able to handle planned/future upgrades to the aircraft.
Other.--ACC has determined the displays to be a Critical Viability
Issue and unfunded program for ARC (AFRC/ANG) aircraft. AF Form 1067
(Modification Proposal) has been approved by ACC. At present, the ARC
is working a ``fair-share'' upgrade study which leverages a greater
number of aircraft to obtain lower prices for this upgrade (contractor
not yet determined).
State/Base.--Texas, Carswell Ft. Worth; Utah, Hill AFB; Florida,
Homestead ARS; Arizona, Luke AFB.

Priority #6
Description.--This will replace the older and unsupportable Scope
Shield I (SSI) tactical field radio sets for all AFRC Force Protection
units. Scope Shield II (SSII) radios have proven capability of
providing adequate and necessary secured communication links during
training exercises and contingency operations.
Impact to Readiness.--With the exception of a very limited number
of units, the AF reserve force structure retains the old, out-dated,
ineffective equipment, and non-interoperable radios.
Other.--Headquarters Air Force Civil Engineer Support Agency
(AFCESA) identified Scope Shield II tactical radio equipment as the
replacement for the antiquated Scope Shield I tactical radio sets
within all CE units. Because of the cost for outfitting all CE units a
decision was made to only fund acquisition for active duty CE Unit Type
Codes (UTCs). Sufficient POM funding is not available for Air Force
Reserve and Air National Guard units. Operational Requirements Document
99-27.
State/Base.--Massachusetts, Westover ARB; Oregon, Portland IAP;
Georgia, Dobbins AFB, Robins AFB; Wisconsin, Gen Mitchell IAP; Texas,
Carswell Ft. Worth ARB, Kelly AFB; Florida, Homestead AFB, Eglin AFB,
Patrick AFB; California, March AFB; Indiana, Grissom ARB; Minnesota,
Minn-St. Paul ARS.

Priority #7
Description.--A Helmet Mounted Cueing System (HMCS) will provide
the F-16 pilots an integrated capability with the combining of data
from the multi-functional displays, instrumentation, and other on-board
avionics. It will significantly improve Air to Air and Air to Ground
mission effectiveness by providing Heads Up Display (HUD) information
and spatial cueing directly onto an aircrew helmet visor.
Impact to Readiness.--HMCS is leading-edge technology and a
necessity for threat awareness and defensive reactions. It maintains
parity with the active duty fighter force.
Other.--The HMCS is not fully operational. Final testing is
expected in fiscal year 2002.
State/Base.--Texas, Carswell Ft. Worth; Utah, Hill AFB; Florida,
Homestead ARS; Arizona, Luke AFB.

Priority #8
Description.--This requirement is for a training package of 30 PRC-
112B/C survival radios for 10th Air Force fighter, rescue and special
operations units. The PRC-112B (sometimes referred to as the Hook 112)
has become the standard survival radio in Operations Northern and
Southern Watch (ONW and OSW). These radios offer a great increase in
capability over PRC-90 and early PRC-112 radios. Among the capability
of these radios is an internal Global Positioning System (GPS) receiver
and the ability to communicate with rescue forces via secure data burst
transmission. These radios will be evenly distributed among AFRC
fighter bases.
Impact to Readiness.--Rescue is all about identifying and
retrieving personnel. It is crucial to locate, identify, and recover
during the ``golden hour'', that first hour a survivor is on the ground
and when the member is most susceptible to capture. With this SR,
golden-hour search and rescue is now reachable.
State/Base.--Hill AFB, Utah; Homestead AFB, FL, Carswell Ft. Worth,
TX; Luke AFB, AZ; Whiteman AFB, MO; Barksdale AFB, LA; New Orleans ARB,
LA.

Priority #9
Description.--PIDS universal upgrade is a modification to the PIDS
that allows the aircraft to be in compliance with Military Standard
1760 for electronics bus. MIL STD 1760 interface is necessary to
support ``Smart Weapons'' integration. The term ``Smart Weapons'' is
used to describe a range of weapons that use the Global Positioning
System (GPS) for trajectory guidance.
Impact to Readiness.--This requirement is a necessity for
participation and deployment with Aerospace Expeditionary Forces. This
will be a future qualifier and is an ACC unfunded survivability issue.
State/Base.--Texas, Carswell Ft. Worth; Utah, Hill AFB; Florida,
Homestead ARS; Arizona, Luke AFB.

Priority #10
Description.--Provides moving map capability and Real Time
Information in the Cockpit (RTIC) to all crew stations on the B-52. The
BETI system consists of personal computer (PC) based, computer display
screens, one mounted at each aircrew station ((Aircraft Commander (AC),
Pilot, Navigator (Nav), Radar Nav (RN), and Electronic Warfare Officer
(EWO)).
Impact to Readiness.--The BETI system will provide the B-52 aircrew
with enhanced tactical awareness via moving map displays, near Real
Time Intelligence in the Cockpit (RTIC) threat updates and displays,
and Line of Sight (LOS) and Beyond LOS (BLOS) data transfer capability.
This program is presently under development at ACC and may appear as an
fiscal year 2004 POM initiative for active aircraft.
State/Base.--Louisiana, Barksdale AFB.

Priority #11
Description.--Replaces un-supportable boost pump on the KC-135E
model tankers with same boost pump used on the KC-135R's. The E-model
fuel boost pump impeller fails, leaks internally and is not designed
for continuous operation. The modification includes pump, brackets,
wiring, trial install, kit-proofing, support, and technical order
updates/engineering changes. This is a Guard/Reserve effort.
Impact to Readiness.--Improves mission readiness rate at a lower
maintenance cost. It will also bring commonality to the entire KC-135
fleet.
State/Base.--Michigan, Selfridge ANGB; California, Beal AFB.

Priority #12
Description.--Current operations across the spectrum of operations
have proven the need for a battlefield identification system. The
Situation Awareness Data Link (SADL) will provide the AFRC tactical
airlift (C-130, KC-135 aircraft and HH-60G helicopter) and Combat
Search and Rescue (CSAR) aircraft with a capability to work with other
USAF units as well as similarly equipped Army and Marine units in
close-in Joint combat scenarios. It provides tactical data link
capability as a carry-on PC-based system. This modification concept
will link SADL data directly to aircraft navigator table (where
applicable). It will provide air-to-ground interface for airdrop or
personnel recovery coordination en-route. Provides air-to-air tactical
picture and escort situation to aircrew.
Impact to Readiness.--Incorporation of SADL into AFRC aircraft will
reduce the possibility of other aircraft or ground units shooting down
a SADL equipped aircraft. This also enhances mission survivability due
to the ability to pass ``live'' information between aircraft.
State/Base.--Michigan, Selfridge ANGB; California, Beal AFB;
Florida, Patrick AFB.

Priority #13
Description.--Procures Environmental Protection Agency (EPA)
compliant paint spray booth for the 403 AW and replaces the out-dated
aircraft spray booth. The new booth will serve both WC and C-130H/J
aircraft. This is a side-down draft, pressurized, dry filter aircraft
parts/support equipment paint spray booth insert.
Impact to Readiness.--The coating system must provide the specified
survivability enhancement for the life of the airframe. As the flat
camouflage coatings used on our weapon systems age they loose their
hiding and corrosion prevention capability. Another major concern is
meeting environmental standards. The present system may fail to meet
several EPA clean air regulations making the AFR liable to fines that
can exceed the cost of replacing the booth.
State/Base.--Louisiana/Keesler AFB.

Priority #14
Description.--The High Mobility Multipurpose Vehicles are DOD
standard light personnel transport/carrier (also known as the Humvees)
M1097A2 vehicles. These are needed to replace the existing M1008
vehicles, which are no longer manufactured. The M1097A2 truck will
transport equipment and personnel to the battlefield in support of
medical wartime tasking. Due to DOD-wide use these vehicles are
adaptable, interchanged, or shared with other agencies, components, or
agencies for a wide variety of additional tasking.
Impact to Readiness.--These vehicles are essential for continued
medical support operations. Current vehicles are prone to breakdown and
maintenance time has doubled due to lack of parts.
State/Base.--Florida, MacDill AFB.

Priority #15
Description.--Snow plow and removal vehicles are needed at northern
tier AFRC bases. The lack of these vehicles have reduced the base Civil
Engineering squadron ability to perform runway and taxi way snow
removal and cleanup effectively and timely. The full compliment of the
necessary snow vehicles will improve aircraft launch and recovery
operations during winter months.
Impact to Readiness.--At northern bases where snow accumulation has
reached 2 to 3 feet within hours, runways are shutdown if the snow is
not properly and completely removed and operational support/training is
delayed.
State/Base.--Washington, McChord AFB; Oregon, Portland IAP;
Minnesota, Minn-St. Paul ARS; Wisconsin, Gen. Mitchell IAP ARS;
Michigan, Selfridge ANGB; New York, Niagara Falls IAP ARS.

Priority #16
Description.--This requirement consists of the procurement and
installation of trunked LMR Systems at all AF Reserve Bases (.5 or half
systems are used to address AFRC tenant base structure). Currently,
operating radio networks in six AFRC bases are experiencing problems
including lack of coverage, degraded service, and limited frequencies,
trunked LMRs provide an integrated system that complies with National
Telecommunications and Information Administration (NTIA) regulation for
narrow band operations.
Impact to Readiness.--Many AFRC bases are experiencing problems
such as, degraded signal, transmission drop-offs, and frequency
limitation. Effective 1 Jan 2005, NTIA requires all LMR networks to go
to narrow-band, thus driving an upgrade of all LMR equipment and
infrastructure.
State/Base.--Massachusetts, Westover ARB \1\; Oregon, Portland IAP;
Georgia, Dobbins AFB \1\; Wisconsin, Gen Mitchell IAP \1\; Texas,
Carswell Ft. Worth ARB; Florida, Homestead AFB \1\; California, March
AFB \1\; Indiana, Grissom ARB \1\; Minnesota, Minn-St. Paul ARS.
---------------------------------------------------------------------------
\1\ Indicates desired fiscal year 2002 installation.
---------------------------------------------------------------------------

Priority #17
Description.--This is a highly reliable integrated security system
capable of intrusion detection, alarm reporting, and situation
assessment. It integrates sensors, data communication devices, and
power supplies into a relocatable (movable) system designed to enhance
flight line security.
Impact to Readiness.--Due to AFRC's installations being minimally
manned for security, the use of this system is important to Force
Protection efforts, and is a significant force multiplier.
State/Base.--Minnesota, Minn-St. Paul ARS \1\; Texas, Carswell ARS
\1\; Louisiana, New Orleans ARS \1\; Massachusetts, Westover ARB \1\;
Wisconsin, Gen Mitchell ARS \1\; Ohio, Youngstown-Warren ARS; New York,
Niagara-Falls IAP, ARS; California, March ARB; Florida, Homestead ARS;
Georgia, Dobbins ARB.

Priority #18
Description.--These vehicles are required to transfer aircraft fuel
directly from an under ground hydrant system onto KC-135 and C-5
aircraft. Mission readiness at AFRC bases assigned KC-135 and C-5
aircraft depends on the operation of hydrant trucks. The pumping
capability of the hydrant is 1,200 gallons per minute where as the
existing R11 pumps only 600 gallons per minute. The funding level of
new procurement through the vehicle priority buy system has been
consistently under funded.
Impact to Readiness.--Without the double capacity hydrant trucks
AFRC fuels management effort is doubled when servicing KC-135, and C-5
aircraft or servicing transient wide body aircraft.
State/Base.--California, March ARB; Minnesota, Minn-St. Paul ARS;
Ohio, Youngstown-Warren ARS; New York, Niagara-Falls IAP, ARS;
Massachusetts, Westover ARB; Florida, Homestead ARS; Texas, Carswell
ARS; Louisiana, New Orleans ARS; Georgia, Dobbins ARB.

Priority #19
Description.--These NVGs are a major leap in NVG technology, and
offer significant capability, and safety increases over presently
fielded NVGs. This purchase will provide enough NVGs to allow all
applicable AFRC units to train and develop tactics to this increased
capability. This quantity will also be enough to equip and deploy 2
AFRC units. This purchase offers a cost-effective compromise as opposed
to replacing all NVGs presently being used. This will allow future
incremental buys taking advantage of product improvement and refinement
after initial production. Panoramics offer a wider field of view than
current NVGs, and low bloom technology offers a significant increase in
capability in urban areas, a DOD high priority environment. Non
ejection compatibly, limited field of view and NVG blooming are
currently the 3 most severely limiting factors in NVG operations. These
NVGs will be used in special operations, rescue and fighter units.
State/Base.--Hill AFB, Utah; Homestead AFB, FL; Carswell Ft. Worth,
TX; Luke AFB, AZ; Whiteman AFB, MO; Barksdale AFB, LA; New Orleans ARB,
LA.

Priority #20
Description.--Tractors are required to transport recovered cargo
loads after airdrop support operations. These tractors are considered
multipurpose and can be used in a wide variety of scenarios while
providing the necessary capability for which they are intended.
Impact to Readiness.--Increased AFRC taskings around the world
demand more assets to be available for support.
State/Base.--California, March ARB; Minnesota, Minn-St. Paul ARS;
Ohio, Youngstown-Warren ARS; New York, Niagara-Falls IAP, ARS;
Massachusetts, Westover ARB; Florida, Homestead ARS; Texas, Carswell
ARS; Louisiana, New Orleans ARS; Georgia, Dobbins ARB; Pennsylvania,
Pittsburgh IAP ARS.

Priority #21
Description.--These 44 utility vehicles are required to
transport drop zone management and cargo recovery teams to and from the
drop zones. One way distance to many drop zones can exceed 100 miles.
These utility vehicles have the capability to travel at any time over
any land surface in and around drop zones to set up runway markers and
locate recoverable airdropped loads.
Impact to Readiness.--Fewer airdrops are performed per flying
training mission because of the amount of time it takes to recover
airdrop training loads.
State/Base.--Minnesota, Minn-St. Paul ARS; Ohio, Youngstown-Warren
ARS; New York, Niagara-Falls IAP, ARS; Massachusetts, Westover ARB;
Pennsylvania, Pittsburgh IAP ARS.

Priority #22
Description.--The Flightline VSS is part of the AFRC Flightline
Threat Reduction Program. AFRC installations are minimally manned due
to shortage in manning. Manpower authorizations at each location allow
for only 1 one-person mobile patrol per control point. The Flightline
VSS acts as a force multiplier without additional manpower.
Additionally the Flightline VSS allows commanders to observe
maintenance operations in progress and security situations, in near
real-time, via command post remote monitors.
Impact to Readiness.--The expanding role of AFRC in the total force
makes it imperative that strong emphasis be placed on security of
priority resources while adding a greater margin on safety.
State/Base.--Wisconsin, Gen Mitchell ARS \1\; Minnesota, Minn-St.
Paul ARS \1\; Texas, Carswell ARS \1\; Massachusetts, Westover ARB;
Ohio, Youngstown-Warren ARS; California, March ARB.

Priority #23
Description.--The ACIU provides weapons interface, communication
and data processing for the Block 25/30/32 F-16. Capabilities of the
existing ACIU cannot accommodate the integration of new generation
``Smart Weapons'' and prevent the full potential of the aircraft.
Future capabilities planned for integration on the F-16 will be limited
or impossible under constraints imposed by the current ACIU. The total
cost of the program is $6.65 million. This includes $4 million for Non-
recurring engineering (NRE). The total quantity required is 72 units.
Impact to Readiness.--Existing ACIU processor speed and memory
capacity cannot handle any additional capabilities. In addition, its
failure rate is very high, Mean Time Between Failure (MTBF) is 400
hours. The upgraded device is anticipated to have a 2,000 hour MTBF.
State/Base.--Texas, Carswell Ft. Worth; Utah, Hill AFB; Florida,
Homestead ARS; Arizona, Luke AFB.

Priority #24
Description.--The RERP program is required to replace the current
T-39 engine and upgrades airframe and systems components. This is a
much needed modernization requirement for the C-5A, whose age is well
above 30 years old. This effort will improve the C-5A reliability and
maintainability by focusing on replacing the less reliable T-39 engine
with a more reliable, commercial-off-the-shelf, turbo fan engine. This
program also will upgrade numerous other subsystems including flight
controls, electrical, hydraulics, landing gear, fuel system, and
airframes.
Impact to Readiness.--This mod will significantly improve readiness
and increase operational worthiness times while, reducing down time for
maintenance and personnel cost.
State/Base.--Massachusetts, Westover ARB; Texas, Lackland AFB.

DEPLOYMENTS

ANG fiscal year 2001 supplemental requirements

[In millions of dollars]

ANG Family Program. Implemented in fiscal year 2001, this funding
breathes life into a totally ignored piece of the ANG's
worldwide commitment. While active Air Force and Air Force
Reserve programs reflect $60-$125 per person for family
support during contingency deployments, the ANG's family
program operated on a volunteer basis......................... 5.0
Flying Hour Program Increased Cost. Fully funds anticipated flying
hour program for fiscal year 2001. Increases caused by aging
aircraft and hard-to-get parts. Without additional funding,
ANG aircraft will be grounded on/about 1 Sep.................. 93.0
Utility Cost Increases. West cost utility cost increases plus
inordinately harsh winter elsewhere has driven utility costs
skyward. Additional funding required to offset increased costs 16.3
Civilian Payroll. Part 1 is Special Salary Rates for technician
pilots and Information Technology personnel. Part 2 is to
restore 25 percent program reduction for failed PMEL out-
sourcing effort. Eighty-three technicians were marked for out-
sourcing. Decision reversed. Fiscal year 2001 impact only..... 6.0
Depot Maintenance Activity Group (DMAG) Surcharge. Fiscal year
2000 shortfall in working capital fund requires surcharge in
fiscal year 2001 to balance accounts. ANG share is $10.0...... 10.0
Depot Purchased Equipment Maintenance Backlog. ANG's current
backlog includes one C-5 aircraft, two KC-135 aircraft and
eight engines. All of this backlog could be executed if
funding was available......................................... 18.6
Real Property Maintenance. The ANG backlog on facility maintenance
now approaches $1 billion. At this point in the fiscal year,
executing much more than $50 million will be a difficult task.
This amount of additional funding should also maintain the
current backlog............................................... 50.2
______
Total....................................................... 199.9

The Air Force Reserve has been presented with numerous funding
challenges due to high tempo of operations. Following are some of the
shortfalls we are currently experiencing:

----------------------------------------------------------------------------------------------------------------
Amount
----------------------------------------------------------------------------------------------------------------
DPEM \1\ .................... $39.0 O&M......... Total validated requirement for AFR DPEM in fiscal year
2002 is $354.1 million. Current funding--$287.16 million,
equates to 83.3 percent of validated requirement 92-94
percent of requirement is historic level of funding
required. Additional $39 million would bring AFRC funding
up to 92 percent. Will have to defer PDM on up to 10
aircraft of various types and delay induction of as many
as 20 engines into depot overhaul
IADT, Proj 725............... 4.0 RPA......... Initial Duty for Training activity. Allows accession of
additional 400 NPS individuals. Major Reserve initiative
to regain end strength. Programmed funding of $13.8
million
Annual Tour, Proj 721........ 8.0 RPA......... Unit annual tour funding. Increased participation and costs
that exceed planning factors drive this bill. Programmed
funding of $484.6 million
Annual Tour, Proj 722........ 6.0 RPA......... Individual Mobilization Augmentee annual tour funding.
Increased participation and costs that exceed planning
factors drive this bill. Programmed funding of $92.8
million
Bonus Incentives Programs, 31.0 RPA......... Funds needed for further incentives to support recruitment
Project 739. and retention. Most AFR bonus programs currently funded at
less than 100 percent
Facility Projects \2\........ 97.0 O&M......... Represents 2 percent of Plant Replacement Value of AFR
facilities. Requirement is direct result of years of under
funding. MILCON, and Reserve assumption of ownership of
former AD bases. Attempts to halt slide in readiness.
Funds critical infrastructure and facility requirements at
tenant and host locations
Planning & Design............ 10.0 O&M......... Requirement is driven by (1) limited in-house staff, (2)
Increased design requirements
Recruiting & Advertising..... 21.6 O&M......... Past congressional adds have allowed the program to operate
at a $12 million funding level. This fiscal year's budget
is closer to the original baseline of $6 million. A viable
national presence and program cannot be maintained at the
current level of funding. Funds national television, radio
and print advertising to support 35 main operating
locations, Internet advertising campaign, and new leased
offices scheduled to open this fiscal year
KC-135 R Engine Kits......... 54.0 Investment.. Requirement driven by proposed weapon system conversion and
Congressional attention. Funds the conversion of two E-
model aircraft to R-model configuration
----------------------------------------------------------------------------------------------------------------
\1\ Represents 92 percent of total requirement.
\2\ Represents 2 percent of Plant Replacement Value.

[In millions]

Amount

RESERVE PERSONNEL APPROPRIATION--APPN 3700:
Annual Tour, Proj 721......................................... $8.0
Annual Tour, Proj 722......................................... 6.0
IADT, Proj 725................................................ 4.0
Special Tour, Project 727..................................... 21.1
Bonus Incentives Programs, Project 739........................ 31.0
ROTC, Proj 783................................................ 11.8
______
Total....................................................... 81.9
=================================================================
________________________________________________
OPERATIONS & MAINTENANCE APPROPRIATION--APPN 3740:
DPEM \1\...................................................... 39.0
Sustaining Engineering........................................ 5.0
Recruiting & Advertising...................................... 21.6
Facility Projects............................................. 97.0
Planning & Design............................................. 10.0
Information Technology........................................ 18.5
Nuclear Biological Chemical Equipment......................... 3.9
RED HORSE..................................................... .5
DMAG Surcharge................................................ 8.0
Mass Transit Subsidy.......................................... .5
______
Total....................................................... 204.0
=================================================================
________________________________________________
MILITARY CONSTRUCTION APPROPRIATION--APPN 3730:
Judgment Fund Payment......................................... 11.9
Fuel Cell Maintenance Facility................................ 7.3
Consolidated Training Center.................................. 6.1
New Fire Station.............................................. 7.0
Consolidated Lodging Facility................................. 13.3
Services Complex.............................................. 12.2
Squadron Operations Facility.................................. 4.2
Aerial Port Training Facility................................. 1.9
Consolidated Lodging Facility................................. 15.4
Airfield Project.............................................. 15.0
Fitness Center................................................ 2.5
Construct VQ to Replace VAQ................................... 9.0
Maintenance Hangar............................................ 9.2
Planning & Design............................................. 6.7
______
Total....................................................... 121.9
=================================================================
________________________________________________
INVESTMENT APPROPRIATIONS--APPNs 3010, 3080:
C-130Js....................................................... 145.4
KC-135 R Engine Kits.......................................... 54.0
F-16 D Model SADL Installation................................ .2
F-16 Color Display............................................ 4.8
Tactical Radios............................................... 4.3
Survival Radios............................................... .6
F-16 Pylon Integrated Dispenser Upgrade....................... 3.0
KC-135 Auxiliary Power Unit Boost Pump........................ .3
C-130 Spray Paint Booth....................................... .6
Motor Vehicles for Med UTCs................................... 1.9
Snow Removal Vehicles......................................... 1.2
Land Mobile Radios............................................ 4.1
Intrusion Detection System.................................... 2.1
Hydrant Fueling Trucks........................................ 1.4
Truck Tractors................................................ .8
Utility Truck (44)................................... .2
Flightline Video Surveillance System.......................... .5
F-16 Advanced Central Interface Upgrades...................... 6.6
______
Total \1\ .................................................. 232.0

\1\ Total different from sum due to rounding.
---------------------------------------------------------------------------
reserve affairs
Personnel.--There are no current personnel shortfalls.
Operations and Maintenance Shortfalls.--The Marine Corps Reserve
has shortfalls in O&MMCR for utilities, equipment and vehicle
maintenance, and flight hours (O&MNR).
Utilities: $2.3 million
Utility costs have risen by an unprojected 40 percent at all of the
185 MARFORRES sites during fiscal year 2001, leaving MARFORRES
critically short of funding. These are ``must pay'' costs. Meeting the
``must pay'' requirements from within existing appropriations will
impact Real Property Maintenance and Operating Forces funding.
Replenishment, replacement, and maintenance of some equipment would
have to be deferred to future years, creating a bow wave in these
accounts.
Maint of Equipment: $5.0 million
Repair costs for maintenance of armored vehicles, trucks,
howitzers, and other ground equipment are rising. Maintenance of
Equipment and Vehicles includes Critical Low Density Repairables (CLD)
supporting radar and communication assets; Depot Level Repairables
(DLR) supporting repair parts for such equipment as tanks, trucks,
AAVS, HMMWVs; and other maintenance of equipment. When CLD and DLR
equipment fails, the equipment is deadlined, training is impaired and
readiness impacted. The Marine Corps is also reaching or exceeding the
service life of many major ground weapon systems. Additional funding
for Maintenance of Aging equipment is required to cover rising repair
costs for Reserve Component organic and intermediate level maintenance
for tanks, AAVs, LAVs, trucks, howitzers, and other ground equipment.
Flight Hours at current cost per hour: $3.7 million
The fiscal year 2001 Flying Hour Program does not provide adequate
funding to achieve the desired Primary Mission Readiness. The potential
decrease in Mission Capable/Full Mission Capable rates and 6-8 month
recovery time for the re-qualification of aircrews are a major
readiness concern.
Equipment Shortfalls.--F/A-18A Engineering Change Proposal (ECP)
583.
5 Reserve Aircraft upgrades: $20.5 million
The primary factor driving the F/A-18A upgrade is the mitigation of
the current F/A18C/D inventory shortfall that becomes almost
unmanageable beyond fiscal year 2006. The 28 active and 48 reserve F/A-
18A's represent 51 percent of the total single seat strike fighters in
the USMC inventory. The current difference in capability between the F/
A-18A and F/A-18C is significant in several areas including weapons
employment, communications, and sensors. ECP-583 rectifies these
deficiencies. ECP-583 provides the war fighting CINC with enhanced
battlefield aircraft superiority and sustainment. ECP-583 will ensure
seamless precision strike commonality between the reserve F/A-18As and
the active F/A-18A/C/D USMC squadrons by providing the necessary
modernization required to support the Marine Corps Total Force.
Operational and logistical commonality with the F/A-18C will be a large
benefit of the upgrade. Acceleration of the avionics upgrade minimizes
obsolescence and multi-configuration component management, which
reduces the logistics footprint, and training for pilots and
maintenance. Of the 76 F/A18As 44 have been funded and contracted for
retrofit. The current year Total Force shortfall is 10 aircraft
upgrades at $41 million.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. And General Schultz, congratulations on
this posture statement for fiscal year 2002. I hope that all of
my colleagues will look over this. It is good reading.
Congratulations. I wish to thank all of you for appearing
before the committee this morning.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to Major General Thomas J. Plewes

Questions Submitted by Senator Ted Stevens

FISCAL YEAR 2001 FUNDING

Question. Please describe in detail your fiscal year 2001 funding
challenges, and the impact of those challenges on your ability to carry
out your mission.
Answer. The Army Reserve is currently faced with significant
statutory Reserve Personnel, Army (RPA) funding shortfalls in fiscal
year 2001 for weekend drill (Inactive Duty Training) and full-time
soldier requirements ($82 million).
The Inactive Duty Training (IDT) account, which pays our soldiers
to drill, is currently short $52 million. IDT funding for fiscal year
2001 was based upon historical participation rates and strength levels.
Successes in recruiting, retention, and drill weekend participation are
in direct contrast to the model that developed the Critical
Requirements. More so, the Army Reserve was funded at levels markedly
lower than the Critical Requirement levels documented by the Army's and
the Army Reserve's models. On 1 October 2000, our end strength was
206,892; the authorized strength was, and is 205,300. This over
strength was a direct result of our support to the Army's Recruiting
Goal at the end of fiscal year 2000. Current average end strength for
fiscal year 2001 as of 31 May 2001 is 205,924. Of more significance,
the average funded strength is only 202,736. The impact of this
resource shortfall--if additional funds are not provided, then we will
have to cancel part or all of the September 2001 weekend drill to
preclude a violation of the Anti- Deficiency Act [31 U.S.C.
1341(a)(1)(A)]. Additionally, the Active Guard, Reserve (AGR) pay and
allowance account is short $30 million. This shortfall is the result of
under costing when the budget was built.
Several measures have been taken to cover a large part of the
projected fiscal year 2001 shortfall--without these actions the
shortfall would be much larger. First, the AGR strength has been held
well below the authorized level, with most AGR accessions being delayed
until the 4th quarter (a projected $9 million savings). Second, an AGR
PCS policy has been implemented that lengthens time-on-station from 3-4
years, to 5 years (a projected $6 million savings). Third, a 1,200 non-
prior service accession reduction has been requested and approved (a
projected $6 million savings). Additionally, steps were taken to lower
our assigned strength closer to our authorization.
The Army Reserve is also faced with a significant Operations and
Maintenance, Army Reserve (OMAR) shortfall of $65.5 million. The impact
of not receiving additional funds will be a decrease in readiness. A
civilian pay shortfall of $12.5 million is the highest priority. A
utility bill of $15 million is the result of increased natural gas and
electricity costs. A Base Operations shortfall of $8 million is
required to fund key support services. Finally, $30 million is required
for critical facility repair and maintenance.

OVERUSING THE RESERVES

Question. I am concerned that we are at the fine line of over using
the Reserves. While you want to be relevant, this over reliance
stretches your force, and strains families and employers. How would you
address this concern?
Answer. The Army Reserve has pockets of stress; however, it is far
from wearing out or straining our soldiers to the breaking point. The
Army Reserve mission as directed by Congress is ``To provide trained
units and qualified persons available for active duty in the Armed
Forces, in time of war or national emergency and at such other times as
the national security requires . . .'' and continues to be valid. The
Army Reserve is a full partner in Army operations and has never failed
to meet a deployment requirement. Since the end of the Gulf War in
1991, the Army Reserve has participated in one of the busiest phases of
its history. Army Reserve soldiers have taken part in humanitarian and
peacekeeping operations in Iraq, in Haiti, in Somalia, in Central
America, in East Timor, in Bosnia, in Kosovo and even in our own
country at Fort Dix, New Jersey, during Operation Provide Refuge. The
Army Reserve is the Army's essential support force. Without the Army
Reserve, the Army would have difficulty performing its worldwide
missions. Thus, unlike its earlier ``for emergency use only'' history,
today's Army Reserve is used every day. Wherever the Army is today, so
is the Army Reserve. Its area of operations is global. The reason is
clear: Many critical types of support units and capabilities are either
exclusively or primarily in the Army Reserve. It has most of the Army's
civil affairs, psychological operations, medical and transportation
units.
As vital as are Army Reserve units, 1,600 units located in 1,100
Army Reserve Centers all across America, the individual men and women
of the Army Reserve are even more important. These dedicated citizen-
soldiers carry their civilian-acquired skills and expertise with them
to meet the needs of the Army and the nation, and then return home with
even greater skills and expertise to make their communities better. In
short, there is no more important investment than our investment in
people; it is an imperative. Our readiness, capabilities,
accessibility, and recruiting and retention rates all support this role
in the National Military Strategy. The Army Reserve continues to
maintain its level of readiness at an all time high and is meeting its
end strength, recruiting and retention goals. The Army Reserve is
accessible and capable of meeting its wartime and peacetime missions
and is a prudent, cost effective force. The Army Reserve provides 20
percent of the Army's warfighting capability for 6 percent of the Army
budget.

FISCAL YEAR 2001 RECRUITING AND RETENTION STATUS

Question. Please address your recruiting and retention status. What
challenges do you find manning your force, and what initiatives do you
have in place? Is there legislative authority you need that you don't
have?
Answer. The Army Reserve fiscal year 2001 end strength objective is
205,300 soldiers. To meet this objective, we established the following
enlisted accession and transition goals: United States Army Recruiting
Command (USAREC)--34,910; Department of the Army Personnel Command
(PERSCOM)--3,188; and the Army Reserve's retention and transition
assets--5,000 soldiers. Through May 31, 2001, the enlisted accession
and transition accomplishment totaled 28,183--a shortfall of 265 (0.9
percent) from the year-to-date planned achievement. Goal accomplishment
is as follows: USAREC--24,088; PERSCOM--2,419; and Army Reserve
assets--1,676. USAREC accesses both non-prior service and prior service
personnel while PERSCOM and Army Reserve assets transition soldiers
from the active component and Individual Ready Reserve (IRR),
respectively, to the Selected Reserve.
Since the introduction of the Commander's Retention Program at the
end of fiscal year 1997, the Army Reserve has reduced enlisted
attrition by nearly 7 percentage points. The enlisted Troop Program
Unit attrition rate in fiscal year 2000 was 30.8 percent. In fiscal
year 2001, our retention efforts bore fruit earlier this year with a
1,200 non-prior service recruit mission reduction to USAREC. However,
persistent pressure from increased job market competition that is
intensified by a still robust economy makes it difficult to maintain
this degree of improved retention. Consequently, funding delays and
projected program shortages threaten our goal of continuing to reduce
attrition.
The same environmental pressures that make non-prior service
recruiting and retention difficult affects prior service accessions.
Since the end of the defense drawdown we have seen a corresponding
decrease in the available prior service market as reflected in the IRR.
This has meant greater training costs, due to the increased reliance on
the non-prior service market, and an overall loss of the knowledge that
comes when NCO leadership fails to transition to the Army Reserve.
Consequently, the Army Reserve's future ability to recruit and retain
quality soldiers will be critically dependent on increases in selected
compensation and education incentives, such as the enlistment and
reenlistment bonuses, Montgomery GI Bill enhancements, tuition
assistance, student loan repayment programs, employer support
enhancements and family support programs. Again, real growth in
recruiting, retention, and training dollars will need to occur.
Additionally, the young people of today need to be made aware of
the unique opportunities available in the different military
components. The best way to get this message out is to advertise
through the mass media. Special attention needs to be placed on the
recruiting budget, especially for advertising, to meet the requirements
of all service components in the next several years. Funding our
critical advertising needs is imperative if we are to be honestly
expected to meet our recruiting goals.
In 1999, Congress directed the Secretary of the Army to conduct a
review of the manner, process, and organization used by the Army to
recruit new members for the Army Reserve. The review assessed why the
Army was not meeting recruiting objectives for the Army Reserve and
recommended corrective measures the Secretary could take. Based on
study recommendations, the Assistant Secretary of the Army for Manpower
and Reserve Affairs approved the transfer of selected personnel
management functions that assist in manning the force, from the United
States Army Recruiting Command to the Army Reserve.
The transfer of additional personnel life cycle management
functions to the Army Reserve combined with the Commander's Retention
Program, AGR Recruiter Hire Program and the Warrant Officer Transition
Program formed the basis for the new Army Reserve Retention Transition
Program. This program empowers Commanders with the resources to
implement a full service approach to personnel readiness by
decentralizing manning efforts and placing them at Army Reserve
Centers. The Commanders' primary tool is a force of trained senior Non
Commissioned Officers (NCO) who hold a newly created Military
Occupational Specialty (MOS) 79V--Retention Transition NCO (RTNCO).
This specialty combines the tenets of retention with a full spectrum
approach to retaining soldiers while providing professional growth
opportunities. These non-commissioned officers (NCOs) provide career
opportunities to soldiers within the Warrant Officer Program, AGR
Recruiter Program and TPU Program while concurrently assisting
commanders with unit retention and reenlistment. The net result of this
process should be improved personnel readiness and soldier support in
units.

ADDITIONAL ARMY RESERVISTS

Question. The Congress authorized and appropriated 300 additional
full time Army Reservists last year. Could you tell us how that has
been implemented, and the impact?
Answer. The fiscal year 2001 National Defense Authorization Act
added 300 more AGRs and 650 more military technicians to the Army
Reserve's strength. MG (P) Thomas J. Plewes, the current Chief, Army
Reserve, said, the reason for this increase was because ``we are
getting our messages across--we can recruit and retain the quality
soldiers we must have; more full-time support means better readiness;
and our soldiers are accomplishing all the missions with honor and
distinction.''
The CAR's highest priority is to increase FTS levels in Army
Reserve units. Although there are requirements for additional AGRs at
both unit-level and above unit-level, the CAR's priority is to support
unit-level requirements. The fiscal year 2001 increase of 300 AGR
authorizations went to units and to support Army Reserve recruiting.
These authorizations are necessary to reduce the readiness shortfalls
currently existing in the Army Reserve and to improve recruiting and
retention initiatives.
One of the greatest challenges facing the Army Reserve today is an
insufficient number of FTS authorizations to support the over 1,900
Army Reserve troop program units. Current FTS authorizations are
approximately 60 percent of what is required to support the reserve
structure.
In fiscal year 2000, the Army identified ``high risk'' thresholds
for FTS for both the Army Reserve and the Army National Guard. The HQDA
high-risk FTS requirements are based on the minimum essential levels to
prepare and maintain units to meet deployment standards identified in
the Defense Planning Guidance. The Army Reserve high-risk threshold for
AGRs and MILTECHs is 16,079 and 8,990, respectively. Current
authorization levels are well below this threshold. The Army
established a ramp that, with Congressional support, would achieve the
high-risk FTS thresholds by fiscal year 2012. The ramp for the Army
Reserve requests Congressional support for an increase of 300 AGRs and
250 MILTECHs per year.
AC Title XI Reduction.--The Army has indicated that they intend to
reduce the number of Title XI AC soldiers supporting the Army Reserve
by 251 in fiscal year 2002 and fiscal year 2003. The current approved
FTS ramp does not factor in the affect of this reduction. An additional
AGR increase will be necessary to compensate for the loss of AC
soldiers. Otherwise, an AGR increase may have to be ``diverted'' to
compensate for the loss of these AC soldiers.
The Army Reserve is requesting that Congress support increases to
MILTECH and AGR authorizations at the rate of 250 and 300 per year,
respectively, until the Army Reserve reaches the HQDA-validated
critical levels. These increases are necessary to improve Army Reserve
unit readiness.

CURRENT RATE OF MILITARY CONSTRUCTION FUNDING

Question. Please comment on how long, at the current rate of MILCON
funding, it will take to replace the plant replacement value of your
assets and your current backlog and annual requirement in real property
maintenance.
Answer. The Army Reserve's current Plant Replacement Value is $6.5
billion. The current average rate of MILCON funding throughout this POM
(2003-07) is $57.5 million. It would take the Army Reserve 113 years to
replace all of its assets at the current level of funding.
The current Real Property Maintenance backlog is $1.6 billion. The
Army Reserve has an average annual requirement across the POM (2003-07)
of $184 million.

UNDERFUND RESERVE FORCES MILITARY CONSTRUCTION

Question. I am concerned that the Department of Defense and your
services under-fund reserve forces military construction because they
know the Congress will add funding for these projects. Can you comment
on whether your ability to ensure your requirements is adequately
addressed through the future years defense plan and other budgetary
processes have improved?
Answer. The Department of Defense and the Department of the Army
have for the past several years been working very hard on the Whole
Barracks Renewal Program, Infrastructure Replacement, Strategic
Mobility, and on the RCI. A large portion of the Army's construction
dollars goes toward those ``must-fund'' programs. The Army Reserve has
a small role in those programs and therefore receives minimal funding
in support of those programs. The remaining available funding for all
components is divided based on a percentage of their requirements. The
Army Reserve receives its fair share of the funds remaining after the
``must-fund'' programs are funded. That funding represents
approximately 27 percent of the Army Reserve's annual military
construction requirement.
The funding provided by the Department of the Army has provided the
Army Reserve with a funding level that allows limited construction of
new facilities and partial modernization of selected existing
facilities. The Army Reserve tries to maximize the available funding to
address the worst facilities and thus improve overall readiness.

RESERVE FORCES EQUIPMENT

Question. I remain concerned about reserve forces equipment
compatibility with the active components as we modernize our forces.
Can you please comment on how we ensure that your respective reserve
force remains relevant and deployable?
Answer. Sir, I share your concern about equipment compatibility. In
today's fast-paced environment of technological developments, equipment
modernization is an integral part of equipment compatibility. We have
determined that the Army Reserve requires approximately $400 million,
in fiscal year 2000 constant dollars, annually to maintain the current
posture of equipment compatibility with the Army.
Unfortunately, the Army has not had adequate research, development
and acquisition (RDA) funding to sustain the Army Reserves posture. In
fiscal year 2001, the Army Reserve received $302 million for equipment
procurement. Only $172 million of this funding came from the Army
through the P1-R process. The remaining funding came directly from
Congress via the NGREA program or direct Congressional adds. At this
funding level, the equipment compatibility gap between the Army and the
Army Reserve continues to widen. Without the funding from Congress, the
gap would widen exponentially. Fiscal year 2001 reflects the highest
funding level for Army Reserve equipment procurement since fiscal year
1994.
The Army Reserve as an essential provider of training and support
operations has a particularly tough time equipping our force. More than
66 percent of the Army's combat support (CS) structure and 72 percent
of the Army's combat service support (CSS) structure is in the reserve
components. Our unique structure does not allow for the density of
equipment items commonly found in combat formations. Additionally,
since much of our force structure resides only in the reserve
component, cascading equipment for the Army is not often an option for
equipping our force.
For approximately 6 percent of the Army's Total Obligation
authority the Army Reserve provides 20 percent of the Army's structure.
Ideally, the Army should be funded adequately in RDA to allow
approximately $400 million worth of equipment to (steady state) be
procured on behalf of the Army Reserve in the Army's procurement
program (P1-R).

TOUR LENGTHS TO THE BALKANS

Question. We were in Kosovo this past February and I was reminded
again of the great contributions made by the reserves in support of our
national military strategy. I understand that Army Reserve forces
mobilized for duty in the Balkans typically serve deployed tours of 179
days. Combined with other required training, the combined length is
typically 220-250 days for your soldiers. I believe this puts a
tremendous strain on the units and the individuals who support these
missions. Has the Army Reserve and the Army considered shortening tour
lengths to the Balkans?
Answer. The Army Reserve is being called on to participate in more
and more missions (from the traditional major theater wars to
peacekeeping operations, to homeland defense). This increase in mission
participation however, has not resulted in an increased strain on units
and/or individuals. As such, the Army Reserve has not considered
shortening tour lengths to the Balkans, or any other mission.
The vast majority of units deploying to support CINC requirements
are derivative units. That is to say, it was not a previously existing
unit, rather one made up mostly of volunteers, usually from existing
units, of specific rank and skills.
On an individual basis, Reservists on temporary tours of active
duty (TTAD), contingency operations temporary tours of active duty
(COTTAD), or active duty for special work (ADSW) fill the majority of
the CINC requirements. Individuals in any of these statuses also do so
voluntarily.
The Army is currently developing a more formalized policy
concerning repeated use of Reservists, other than during a Presidential
Reserve Call-up. The Army Reserve will work with the Army to employ the
optimum tour lengths, which will take into consideration our soldiers'
employers, their families, appropriate veterans benefits, and mission
accomplishment.
______

Question Submitted by Senator Christopher S. Bond

NATIONAL GUARD AND RESERVE EQUIPMENT ACCOUNT

Question. It is my understanding that the percentage of funding the
Active components devote to their respective Reserve components varies
from Service to Service. Can each of the Reserve Chiefs (Air Force
Reserve, Marine Corps Reserve, Naval Reserve, Army Reserve) recount for
me the impact, be it negative or positive, of DOD's decision to reduce
the size of the National Guard Reserve Equipment? Are your respective
Active components providing adequate resources for you to perform your
mission?
Answer. Reduction in the amount of the National Guard and Reserve
Equipment Appropriation (NGREA) as a source of funding to upgrade and
modernize Reserve Component (RC) equipment was based on the premise
that RC requirements would be included in the Army Procurement Process.
Increasing offsets in Procurement Program (P-1R) have not kept pace
with the reduction in NGREA funding. The result is jeopardized
readiness and delayed modernization. Although equipment projections
listed in the P-1R have increased, it is vital to Army Reserve
readiness and transformation that these projections become reality.
Although the Army Reserve can perform its wartime missions, current
capabilities are limited by older, less capable equipment. With the
significant role that the Army Reserve has in support of the AC, we
cannot afford the continued degradation of mission essential equipment.
It is essential that the procurement program keep up with Army Reserve
needs to adequately maintain the readiness and transformation posture
of the Army.
______

Questions Submitted by Senator Kay Bailey Hutchison

EQUIPMENT MAINTENANCE AND STORAGE PROGRAM

Question. I understand that the Army Reserve recently completed a
detailed analysis of its equipment maintenance and storage program and
that you are presently implementing key elements of the program. Can
you detail the results of the study and tell me about your concept for
strategic storage of equipment? I understand that your program takes
advantage of technology that inhibits equipment damage resulting from
moisture-induced corrosion. Has the Government Accounting Office or any
other government audit agency looked at the return on investment from
such a program?
Answer. The Army Reserve did, in fact, complete a detailed analysis
recently that examined critical issues involving maintenance and
storage of equipment. This extensive study was designed to look at
where Army Reserve logistics is and to gain a better understanding of
how best to move the largest combat service support element of the Army
forward into the 21st Century. The results and findings of the study,
which looked specifically at the 77th Regional Support Command in New
York and New Jersey, are contained in a report of over 1,000 pages. The
results provided scientific recommendations on how the Army Reserve can
best implement better business practices, outsource some logistics
services while leveraging our core competencies, redesign and modernize
our Equipment Concentration Sites and Area Maintenance Support
Activities, leverage automation technology, and establish Strategic
Storage Sites.
One of the key elements in the redesign of our Equipment
Concentration Sites and the establishment of Strategic Storage Sites is
the use of Controlled Humidity Preservation technology. Implementing
this technology in equipment storage facilities has tremendous
potential for reducing the cost to maintain the equipment and improving
our ability to be a strategically responsive and ready force. The study
completed on the 77th Regional Support Command demonstrated that the
use of Controlled Humidity Preservation is a viable initiative that can
be implemented throughout the Army Reserve. The Government Accounting
Office looked at the use of Controlled Humidity Preservation and
determined that CHP shelters normally pay for themselves, using the
principle of ``cost-avoidance'', within the first year, and Army units
can receive as much as a 9:1 return on investment. (GAO/NSIAD-97-206,
Sept. 1997).
Our concept for strategic storage is essentially oriented towards
supporting the Army Transformation and achieving strategic
responsiveness. We have implemented a complex methodology to identify
equipment assets required for unit training readiness and those assets
needed only to support wartime authorizations. The concept involves
placing wartime only assets into Controlled Humidity Preservation
facilities strategically located near major seaports and metropolitan
areas. This allows our units to maintain their training readiness while
reducing the ``fort to port'' time for roughly 37 percent (or $2.5
billion) of Army Reserve equipment, thus greatly improving our
strategic responsiveness.

ARMY RESERVE UNIT READINESS

Question. The Army is supporting an increase in Full-time Support
(Active Guard/Reserve and Military Technicians) to improve Army Reserve
unit readiness. What is the annual requirement to support this
increase?
Answer. The critical FTS levels for the Army Reserve are 16,079
AGRs and 8,990 Miltechs. The National Defense Authorization Act for
Fiscal Year 2001 provided an increase in USAR FTS endstrength and
funding to support 300 AGRs and 650 Miltechs. This increase has been
sustained throughout all years. The revised FTS endstrength of 13,106
AGRs and 7,094 Miltechs continues to be below the accepted level of
resourcing. Note the difference of the two between fiscal year 2001 and
fiscal year 2002 in the cumulative ramp was authorized to sustain
Information Operations.
The Army, in coordination with the Army Reserve, continues the
challenge of resourcing an additional 2,973 AGRs and 1,896 Miltechs.
The ramp called for an annual increase in Army Reserve AGRs and
MILTECHs of 300 and 250.

ANNUAL FTS RESOURCING REQUIREMENT
----------------------------------------------------------------------------------------------------------------
Start Fiscal year--
point -----------------------------------------------------
(fiscal
year 2002 2003 2004 2005 2006 2007
2001)
----------------------------------------------------------------------------------------------------------------
AGR:
Cumulative Ramp.............................. 13,106 13,408 13,708 14,008 14,308 14,608 14,908
Net Increase in Manpower..................... 300 300 300 300 300 300 300
Funding Requirement.......................... ....... $9.9 $31.4 $54.4 $78.9 $104.7 $132.3
MILTECH:
Cumulative Ramp.............................. 7,094 7,344 7,594 7,844 8,094 8,344 8,594
Net Increase in Manpower..................... 650 250 250 250 250 250 250
Funding Requirement.......................... ....... $7.8 $21.4 $36.9 $53.1 $70.2 $85.0
----------------------------------------------------------------------------------------------------------------
Note: The above Ramp and Title XI cost figures are based on a 3.9 percent raise and will need to be increased
based on the actual fiscal year 2002 pay raise.

The Army will reduce the number of Title XI AC soldiers in the Army
Reserve by 251 as early as fiscal year 2002. The current FTS ramp does
not account for this reduction. The Army Reserve will require
additional AGR positions to compensate for the loss of these AC
soldiers. While the Army Reserve has made every effort to minimize the
effects of the reduction, it nevertheless represents a high risk to
overall readiness.

ARMY RESERVE TITLE XI OFFSET RESOURCE REQUIREMENT
----------------------------------------------------------------------------------------------------------------
Start Fiscal year--
point -----------------------------------------------------
AGR (fiscal
year 2002 2003 2004 2005 2006 2007
2001)
----------------------------------------------------------------------------------------------------------------
Net Increase in Manpower......................... ....... 251 251 251 251 251 251
Funding Requirement.............................. ....... $8.3 $17.5 $18.2 $18.9 $19.5 $20.1
----------------------------------------------------------------------------------------------------------------
Note: The above Ramp and Title XI cost figures are based on a 3.9 percent raise and will need to be increased
based on the actual fiscal year 2002 pay raise.

Achieving the full high-risk threshold of FTS is a top priority for
the Army Reserve. The FTS ramp was developed to ease the Army's
resourcing requirement associated with the increase of manpower.
However, it is the Army Reserve's opinion that unit readiness and
equipment maintenance continue to be at risk if resourcing of the
manpower is not fully achieved until fiscal year 2012. The goal of the
Army Reserve is to acquire and fund the critical shortfall of FTS
soonest and minimize the degradation of readiness.

REPAIR AND CONSTRUCTION OF RESERVE CENTERS

Question. We have been through a period when recruiting for all
Services has been very challenging and we could end up there again. On
Main Street, the most prominent symbols of the military are our Reserve
and National Guard centers. Many of these centers are over 50 years old
and in need of repair or replacement. What can this Committee do to
support the repair and construction of Reserve centers to make them a
source of pride for our Reserve soldiers and their communities?
Answer. The Army Reserve recognizes the need to project a positive
image on Main Street, USA. We are well aware that in many cases our
soldiers and our facilities are the main source of public relations
that we have in many communities across the United States. This is why
we feel that it is important that we continually project a positive
image at all times.
We are looking at our Military Construction program as a means of
promoting that positive image. The goal of our MILCON program is to
provide state-of-the-art facilities that are a source of pride for the
soldiers and the community as well. To achieve that goal, we have
embarked on an aggressive program that includes new construction, major
rehabilitation and full facility revitalization. The Army Reserve
appreciates the funding provided to us by your Committee in the form of
Congressional Adds and other appropriations. We will continue to work
hard in designing and constructing facilities that will well represent
the U.S. Army on Main Street, USA.

CURRENT EQUIPMENT REQUIREMENTS AND SHORTFALLS

Question. The Army Reserve is an invaluable part of today's Army.
In the last ten years, they have deployed soldiers and equipment around
the world in support of our nation. In fact, The Army cannot perform
its mission without the combat support and combat service support
capability of the Army Reserve. Unfortunately, the Army Reserve has not
always been funded at a level equal to its requirements. Over the past
several years, Congress has been successful in appropriating funds
above the President's Budget request which allows the Army Reserve to
purchase mission essential equipment. For the record, would you please
provide to this Committee a list of your current equipment requirements
and shortfalls?
Answer. Modernization is the lynchpin to the Army's transformation
plan. Particularly important is modernizing units in the Counter Attack
Corps and early deploying CS/CSS units that support the CSA's stretch
goal of deploying and sustaining 5 divisions in 30 days. It is crucial
that those Legacy systems that provide Focused Logistics in the force
and remain in the Objective Force are modernized concurrently with the
supported force. The Army Reserve receives approximately 6 percent of
the Army's total procurement dollars, while providing 45 percent of the
CSS and 30 percent of the CS structure to the warfight. This shortfall
in CS/CSS equipment procurement results in significant equipment un-
financed requirements and greatly impacts the Army Reserve's ability to
support the Army's CS/CSS Transformation Strategy.
Currently Army Reserve unit mission capabilities are limited by old
and outdated equipment. Some critical equipment is past its economic
useful life and not deployable for wartime or contingency operations. A
compilation of key Army Reserve requirements and shortfalls is
attached. This is a snapshot of the requirement and as such is not a
definitive source but rather a ``magnitude of order'' guide to overall
Army Reserve requirements for the most important systems.

------------------------------------------------------------------------
2002
PRIORITY NOMENCLATURE REQ 2002 COST
------------------------------------------------------------------------
1Black Hawk Helicopter (UH60L) 16 $179,104,000
2FMTV, 2.5T Truck 66 8,411,370
3FMTV, 5T Truck 78 12,480,000
4High Mobility Multipurpose Wheeled 600 38,700,000
Vehicle (HMMWV)
5Super High Frequency Triband Advanced 20 37,000,000
Range
6Tactical Fire Fighting Truck (TFFT) 20 10,000,000
7Chinook Helicopter (CH-47) 1 32,000,000
8All Terrain Lifter Army System (ATLAS) 60 6,011,940
9Rough Terrain Cargo Handler (RTCH) 16 8,400,000
10Heavy Dry Support Bridge 2 10,000,000
11High Frequency Radio (AN/PRC 138B) 1,003 35,084,940
12Armored Security Vehicle (ASV) 15 9,799,995
13Modular Causeway System 5 7,500,000
14Line Haul Tractor (M915A3) 78 10,530,000
15Fuel System Supply Point (FSSP) 132 2,961,420
16Improved Ribbon Bridge (Ramp R10527) 2 11,200,000
17Airborne/Air Assault Scraper 36 5,940,000
18Water Distribution System 24 3,960,000
19Common Bridge Transport 56 17,192,000
20Wolverine 4 25,600,000
21Hercules 2 4,000,000
22Yard Tractor (M878A2) 21 2,387,700
23Coyote (M56) 24 5,833,800
24Combat Automated Service Support-Medical 10 2,049,250
25Medical Components 244 3,499,936
26Tent, Surgical 40 1,080,000
27Shelter, Tactical, Expandable, Two side 50 4,950,000
28Armored Combat Earthmover (ACE) 36 39,600,000
29Generator Set, TRL MTD 60KW 21 504,000
30Generator Set, Diesel, Tactical Quite 322 2,206,022
Generator
30a 5-60KW ....... ............
30b 30/60KW ....... ............
30c 100 & 200KW ....... ............
31Engineering Mission Modules (EMM) ....... ............
31aTruck 24 6,936,000
31bPLS Trailer 24 1,320,000
31cBituminous Module 13 611,000
31dMobile Concrete Mixer 11 1,298,000
31eDump Module 46 3,496,000
32Container Assembly Refrigeration 9K BTU 45 2,624,670
33AVLB, Hydraulic & Electric Modifications 24 2,640,000
34JAVELIN 27 12,998,286
35Global Positioning System 315 419,265
36Night Vision Device (AN/PVS-7) 964 2,649,072
37Crushing Screening and Washing Plant 2 4,000,000
(CSWP)
38Light Equipment Transport Truck, M916 25 4,425,000
Series
39Welding Shop, Trailer Mounted 38 1,520,000
40Sanitation Center, Field Feeding 100 1,273,500
41Modern Burner Unit 979 2,643,300
42Grizzly 4 23,200,000
------------------------
Total ....... 267,933,156
------------------------------------------------------------------------

______

Questions Submitted to Rear Admiral John Totushek

Questions Submitted by Senator Ted Stevens

Question. Please describe in detail your fiscal year 2001 funding
challenges, and the impact of those challenges on your ability to carry
out your mission.
Answer. In fiscal year 2001, we are addressing challenges in the
Operations and Maintenance, Navy Reserve (OMNR) appropriation in the
areas of Real Property Maintenance (RPM), Flying Hour Program (FHP),
Information Technology (IT), and Base Operation Support (BOS).
In RPM, the Naval Reserve started the year with a $66.8 million
budget, which reflected a $5 million Congressional increase. Whereas
this funding level has brought the Naval Reserve's RPM account in line
with both the Active Navy and civilian industry standards, the Critical
Backlog of Maintenance And Repair (CBMAR) for the Naval Reserve is
still expected to reach $132.0 million by the end of fiscal year 2001.
Managing the CBMAR remains a high priority, as it directly impacts the
quality of life for the men and women of the Naval Reserve.
In the FHP, the Naval Reserve has experienced two challenges. The
first has been an increase in the cost per hour (CPH) between what was
budgeted and what is being executed. The second challenge has been the
increased cost of a new contract for the F-5 program contract
maintenance, a $2.5 million shortfall. In order to remain within
budget, these shortfalls have been addressed by reducing flight hours.
In IT, the OMNR appropriation has been dealing with a shortfall of
$30.2 million. Addressing this shortfall is critical to sustain IT
systems that support both Active and Reserve manpower management
requirements. The IT shortfall has been addressed by a combination of
redirection of funds from other areas of the OMNR appropriation, most
notably RPM, to the IT account and other separate reprogramming
actions. A request for $7.7 million in supplemental relief to restore
the RPM account is included in the Department's fiscal year 2001
Supplemental request.
In BOS, the increased cost of energy experienced across the country
has resulted in a utility shortfall of $5.5 million. Similar to RPM,
the Department has requested relief in the fiscal year 2001
Supplemental.
Question. I am concerned that we are at a fine line of over using
the Reserves. While you want to be relevant, this over reliance
stretches your force, and strains families and employers. How would you
address this concern?
Answer. Senator, there are two major factors contributing to the
over utilization of Naval Reserve members. The first is Funeral Honors
details which mainly impacts our Full Time Support personnel. While it
is our great honor to provide this service for our veterans, this
support has become, at some Reserve centers, a full time job. With
limited Full Time Support staff, many centers are ``one'' deep, which
impacts the Reserve Center's ability to perform their primary mission
of supporting the Selected Reserve community and their families.
The second is the peacetime contributory support needs of the
Regular Navy and the willingness of our Selected Reservists to respond
to those needs. Performing peacetime contributory support provides some
outstanding training for our reservists, however it does not always
enhance and blend with mobilization billet. An increased reliance on
reservists to meet active duty shortfalls contributes to excess use of
reservists. To ease the resulting stress on reservists, their employers
and their families the Naval Reserve is doing the following:
--Educating reservists to carefully evaluate family, employer and
Naval Reserve priorities prior to volunteering for active duty
in excess of what is normally required.
--Educating our members and emphasizing the important role of the
Employer Support of the Guard and Reserve (ESGR) and mandating
training on the rights and responsibilities of reservists and
employers under the Uniform Services Employment and
Reemployment Rights Act.
--Allowing Naval Reservists to flex drill, which allows them the
ability to meet the mission of the Navy while minimizing
negative impact on employers.
--Preparing and issuing a family oriented Naval Reserve Handbook to
educate and inform families and bring them into the formal
decision making process.
--Working with Family Support Centers to improve and expand the
support they provide to Reserve members and their families.
--In addition, the Naval Reserve has a highly organized and efficient
Ombudsman program in place. The Naval Reserve Ombudsmen are
highly trained professional volunteers that work with our
families and provide the following services:
--Pre-deployment Briefings.--Assisting the families in
understanding the elements that are involved in
mobilization or deployment.
--Spouses' Days.--Ombudsman conduct workshops that acquaint Reserve
Family members with assets at their disposal that can be
used in case of a deployment. These workshops also often
include personnel who assist families in developing Powers
of Attorneys and wills and in obtaining ID Cards.
Reserve Ombudsman are also networked through the Reserve Ombudsman
On-line site and can partner other Ombudsman in different locations to
better assist families through on-line conferencing.
Question. Please address your recruiting and retention status. What
challenges do you find manning your force, and what initiatives do you
have in place? Is there legislative authority you need that you don't
have?
Answer. Naval Reserve recruiting is doing very well in meeting goal
and quality of individuals being brought into the Naval Reserve.
Selected Reserve retention for fiscal year 2001 is 96.5 percent.
Retention has remained high throughout the years for the Naval Reserve,
however attrition is the real issue. Attrition has decreased from 35
percent in previous years to approximately 25 percent in fiscal year
2001.
The majority of the Naval Reserve personnel are prior service
veterans. The challenge is to find these personnel in sufficient
numbers to meet our recruiting goals since the number of personnel
leaving the active service is declining.
Some initiatives underway to alleviate these shortfalls are:
--Increased the recruitment of Non-prior service personnel and
additionally we have initiated a Non-Prior Service (NPS) basic
test program with Active Duty. This program affords active Navy
Delayed Entry Program attrites the opportunity to attend boot
camp and Corpsman ``A'' school prior to assignment to a Naval
Hospital Reserve unit.
--We have increased recruiter manning from 622 Enlisted and 67
Officers to 692 Enlisted and 77 Officers.
--We are expanding the Fleet Concentration Area Recruiting concept to
all USN shore activities. Fleet Concentration Area Recruiting
in San Diego, Bangor, Norfolk/Virginia Beach, Jacksonville/
Mayport/Kings Bay have been successful, with a dramatic
increase from 2.0 to 5.6 accessions per recruiter per month.
--Proposed changes to the Naval Reserve Career Recruiting Force
governing instruction to allow long-term hometown recruiting as
a career option for enlisted recruiters.
--Ongoing cooperative efforts with active Navy Recruiting Command in
advertising, leads/referrals, market analysis, and special
events.
--A professional advertising campaign and demographic research
contract will allow us to target and reach our accession
sources more effectively. Coordinated marketing in all media
utilizing an adequate $8 million advertising budget and a
national recruitment marketing firm will increase Naval Reserve
awareness while instilling pride in those currently serving.
There is no legislative authority currently needed for fiscal year
2001.
Question. After the attack on the U.S.S. Cole, I understand some of
your forces deployed to the Persian Gulf for anti-terrorism and force
protection missions. Are those forces still on station? How is the
mission going?
Answer. Senator, Naval Reservists from Naval Coastal Warfare Group
Two deployed in December 2000 to provide force protection and harbor
security in a Persian Gulf port. The principle mission of this force is
security for the logistics task force and the Military Sealift (MSC)
ships. Recently, this mission requirement was extended to the end of
this fiscal year. Forces on station have rotated every three months,
and will continue to do so. Additionally, Naval Reservists from Naval
Coastal Warfare Group One units will relieve the U.S. Coast Guard
Reserve Port Security Unit providing similar services in another
Persian Gulf port later this month. Naval Reserve participation will
increase from approximately 75 personnel to over 120 members.
This mission has been a success and the Central Command has praised
the performance of our personnel.
Question. How are you doing with pilot retention? Are Reserve pilot
pays and bonuses properly structured to retain your experienced pilots?
Answer. Senator, we are doing extremely well with pilot retention.
We are retaining our pilots and have all of our requirements filled.
Evidence suggests that reserve pilot pays, such as ACIP (Aviation
Career Incentive Pay) and ACCP (Aviation Career Continuation Pay), are
accomplishing their designed mission. Additionally, the command bonus
is having the desired effect and contributing to our high retention
rate.
Question. I am concerned that the Department of Defense and your
services under-fund reserve forces military construction because they
know the Congress will add funding for these projects. Can you comment
on whether your ability to ensure your requirements are adequately
addressed through the future years defense plan and other budgetary
processes has improved.
Answer. The Naval Reserve Military Construction (MCNR) program has
historically been budgeted at approximately 3 percent of the Active
Navy Military Construction (MCON) program. That level of funding is
inadequate to address large projects in a single program year. These
large projects must be phased and supported in multiple years of the
future years defense plan (FYDP) and sometimes displaces execution of
smaller budgeted projects.
Question. I remain concerned about reserve forces equipment
compatibility with the active components as we modernize our forces.
Can you please comment on how we ensure that your respective Reserve
force remains relevant and deployable?
Answer. In the Naval Reserve, equipment modernization priorities
are more related to equipment capability than compatibility. For the
most part, Naval Reserve equipment is compatible with Active Component
equipment. However, Naval Reserve equipment modernization requirements
far exceed funding available for modernization. Naval Reserve equipment
requirements compete among Navy requirements during budget formulation.
Although Naval Reserve equipment modernization requirements are vetted,
they have not been fully funded due to higher priority Active Component
requirements and scarce procurement funding available.
______

Question Submitted by Senator Christopher S. Bond

NATIONAL GUARD RESERVE EQUIPMENT ACCOUNT

Question. It is my understanding that the percentage of funding the
Active components devote to their respective Reserve components varies
from service to service.
Can each of the Reserve Chiefs (Air Force Reserve, Marine Corps
Reserve, Naval Reserve, Army Reserve) recount for me the impact, be it
negative or positive, of DOD's decision to reduce the size of the
National Guard Reserve Equipment (Appropriation)? Are your respective
Active components providing adequate resources for you to perform your
mission?
Answer. It was not DOD's decision to reduce the size of the
National Guard and Reserve Equipment Appropriation (NGREA), however,
the amount of NGREA funding the Naval Reserve receives has declined
from $202 million in fiscal year 1997 to $5 million in fiscal year
2001. With Navy's overall procurement requirements far exceeding
funding available, the Navy's ability to fund the equipment
modernization requirements of the Naval Reserve has not kept pace with
the dramatic reduction in the NGREA over the past five years. The net
reduction in procurement funding available to the Naval Reserve is
negatively impacting equipment modernization and thereby Naval Reserve
capability.
______

Questions Submitted to General Dennis M. McCarthy

Questions Submitted by Senator Ted Stevens

Question. Please describe in detail your fiscal year 2001 funding
challenges, and the impact of those challenges on your ability to carry
out your mission.
Answer. The Marine Corps Reserve has funding challenges in
operations and maintenance accounts and equipment procurement accounts.
1. Operations and Maintenance Challenges. The Marine Corps Reserve
has shortfalls in O&MMCR for facilities (utilities, base operations,
maintenance of real property), equipment and vehicle maintenance, and
flight hours (O&MNR).
a. Facilities: There is an unprojected 40 percent utility cost
increase, 40 percent cost escalation for base operations support (BOS),
and continued escalation in the backlog of maintenance and repair of
real property.

[In millions of dollars]

Commodity area Amount

Utilities......................................................... 2.3
Base Ops.......................................................... 3.2
Maint of Real Property............................................ 2.0
______
Total....................................................... 7.5

(1) Utility costs have risen by an unprojected 40 percent at all of
the 185 MARFORRES sites during fiscal year 2001, leaving MARFORRES
critically short of funding.
(2) The cost of Base Operations Support (BOS) has also escalated by
40 percent during fiscal year 2001. These are ``must pay'' costs such
as leases and permits, and our fair share of payment for BOS functions
that our I-I's are not manned to provide: ground maintenance, HVAC,
refuse service, pest control and custodial services. Many interservice
support agreements have increased for centers where we are tenants. We
have also faced absorption of entire training center operating costs in
cases where the host service has relocated. Other BOS shortfalls
include: GME/GSA vehicle lease program: GSA funding has been reduced at
the same time that we have experienced increased vehicle usage and
mileage to support funeral honors.
Environmental: MFR requires hazardous material waste and storage
facilities at 33 sites to be in compliance with federal and state
regulations. Several sites are awaiting remediation work due to on-site
contamination and lead paint and asbestos removal. These costs have
shown a steady increase and are now 30-40 percent above budget
projections. Meeting the ``must pay'' requirements from within existing
appropriations will impact Maintenance of Real Property (MRP) and
Operating Forces funding. Replenishment, replacement, and maintenance
of some equipment would have to be deferred to future years, creating a
bow wave in these accounts.
(3) Several MARFORRES facilities are in deteriorated condition,
posing health and safety risks to the Marines. The fiscal year 2000
Commanding Officer's Readiness Report (CORRS) identified 65 percent of
the Marine Corps owned facilities (24 sites) as inadequate. The backlog
of maintenance and repair has escalated from $1.2 million in fiscal
year 1995 to well over $12 million in fiscal year 2001, due to the
combined effects of years of under funding MRP and insufficient MCNR
funding for revitalization.
b. Equipment and Vehicle Maintenance: Rising repair costs for
maintenance of armored vehicles, trucks, howitzers, and other ground
equipment.

[In millions of dollars]

Commodity area Amount

Maint of Equipment................................................ 5.0

Maintenance of Equipment and Vehicles includes Critical Low Density
Repairables (CLD) supporting radar and communication assets; Depot
Level Repairables (DLR) supporting repair parts for such equipment as
tanks, trucks, AAVS, HMMWVs; and other maintenance of equipment. While
not ``must pays'' per se, when CLD and DLR equipment fails, the
equipment is deadlined, training is impaired and readiness impacted.
The Marine Corps is also reaching or exceeding the service life of many
major ground weapon systems. Additional funding for Maintenance of
Aging equipment is required to cover rising repair costs for Reserve
Component organic and intermediate level maintenance for tanks, AAVs,
LAVs, trucks, howitzers, and other ground equipment.
2. Equipment Procurement Challenges
a. F/A-18A Engineering Change Proposal (ECP) 583 Requirement: $60.6
million.
Of 76 F/A-18As, 44 have been funded and contracted for retrofit.
The 32 remaining unfunded upgrades include 26 Reserve aircraft. The
primary factor driving the F/A-18A upgrade is the mitigation of the
current F/A-18C/D inventory shortfall that becomes almost unmanageable
beyond fiscal year 2006. The 28 active and 48 reserve F/A-18A's
represent 51 percent of the total single seat strike fighters in the
USMC inventory. The current difference in capability between the F/A-
18A and F/A-18C is significant in several areas including weapons
employment, communications, and sensors. ECP-583 rectifies these
deficiencies. ECP-583 provides the war fighting CINC with enhanced
battlefield aircraft superiority and sustainment. ECP-583 will ensure
seamless precision strike commonality between the reserve F/A-18As and
the active F/A-18A/C/D USMC squadrons by providing the necessary
modernization required to support the Marine Corps Total Force.
Operational and logistical commonality with the F/A-18C will be a large
benefit of the upgrade. Acceleration of the avionics upgrade minimizes
obsolescence and multi-configuration component management, which
reduces the logistics footprint, and training for pilots and
maintenance.
Question. I am concerned that we are at the fine line of over using
the Reserves. While you want to be relevant, this over reliance
stretches your force, and strains families and employers. How would you
address this concern?
Answer. Marines and their families are the most important asset we
have. The Marine Corps recognizes the need to provide predictability
and adequate notice to aid Marines, their families, and employers in
planning for and accommodating periods of extended active duty. To
date, the Marine Corps Reserve has not noted any negative impact on the
force, on families, or on employers resulting from increased OPTEMPO.
New Reserve missions like Guantanamo Bay and UNITAS provide
predictability for the Marine, the family and the employer.
An increase in attrition would be the most important indicator of
overuse or strain on families and employers. The Marine Corps Reserve
has met its goal of keeping overall attrition between 25 percent and 30
percent in fiscal year 1999, fiscal year 2000 and to date in fiscal
year 2001. Because participation above 48 drills and 15 days Annual
Training is voluntary, there is anecdotal evidence that increased
OPTEMPO for meaningful training and real world opportunities may
actually have a positive affect on retention.
The Marine Corps Reserve instituted an Exit Survey that is
administered to Marines as they leave their unit. The survey
transitioned to a web-based form in January and is currently being
tested by Marine Forces Reserve. The response to the prior manual
survey, although limited, offered no indication that increased OPTEMPO
or PERSTEMPO was a contributing factor in a Marine's decision to
discontinue active participation in the reserves.
Additionally, the Marine Corps Reserve, through the Marine Corps
Total Force System (MCTFS), began tracking PERSTEMPO on the
congressionally mandated start date of 1 October 2000.
Question. Please address your recruiting and retention status. What
challenges do you find manning your force, and what initiatives do you
have in place? Is there legislative authority you need that you don't
have?
Answer. The Marine Corps Reserve continues to attain monthly
recruiting missions in fiscal year 2001. Our biggest challenge is to
find officers whose military occupational specialties match unit
requirements within a reasonable commuting distance. The Marine Corps
Reserve recruits over 99 percent of its officers from our prior service
Individual Ready Reserve (IRR) population. This pool decreased during
fiscal year 1999 and fiscal year 2000, presenting more difficulty for
our recruiters. This fiscal year, that trend has been reversed and the
IRR officer population has started to increase. Transitional Recruiters
at major bases and stations are actively targeting Marines before they
leave active service, emphasizing the benefits and opportunities of
Reserve service. Additionally, we are exploring ways to improve our
communication with current, former, and retired Marines by developing
an expanded transition assistance program that will enhance
connectivity and affiliation opportunities for Marines after they leave
active service.
Regarding legislation, under current law, Montgomery GI Bill-
Selected Reserve (MGIB-SR) benefit eligibility requires a six-year
drilling obligation followed by two years of availability for
mobilization as a member of the Individual Ready Reserve. Reducing the
drilling obligation period for MGIB-SR eligibility from six years to
four years would allow us to more effectively match the benefit to the
education patterns and lifestyle changes that occur after college
graduation. A four-year drilling commitment commensurate with four
years of college would remove the drilling obligation as our Marines
establish themselves in their civilian careers. This would then be
followed by a four-year ``inactive Reserve'' commitment during which
they would remain available for mobilization should the need arise.
Because the services control the number of contracts offering MGIB-SR
eligibility, this change can be absorbed within existing
appropriations, making it a no cost option. While the Marine Corps
Reserve continues to meet its recruiting challenges, legislative
authority to provide this benefit for a four-year drilling obligation
would provide an innovative tool that would enable us to more
adequately address evolving recruiting challenges and achieve future
success.
Question. How are you doing with pilot retention? Are reserve pilot
pays and bonuses properly structured to retain your experienced pilots?
Answer. The Marine Corps Reserve experienced a pilot attrition rate
of 25.53 percent for fiscal year 2000. The overall Selected Marine
Corps Reserve officer attrition rate for fiscal year 2000 was 21.97
percent. When compared to the overall officer attrition, the Marine
Corps Reserve pilot attrition was 3.56 percentage points higher.
Seventy-two percent of pilot losses resulted from transfers to the
Individual Ready Reserve. Exit survey data indicates that conflicts
with civilian jobs is the primary reason for ending affiliation.
Although pilot attrition was slightly higher than overall officer
attrition, we do not view this as a significant trend. The current
participation-based structure of Reserve component aviator pay and
allowances is fair and equitable. Historically, participation by our
experienced pilots has been motivated by a desire to continue applying
the critical skills earned on active duty as a member of the Marine
Corps Reserve.
Question. I understand you have recently picked up some missions
from the active Marine Corps. Please tell us more about that.
Answer. Marine Forces Reserve is currently involved in two long-
term operations to help alleviate active duty OPTEMPO. During March
2001, a reserve platoon made up of volunteers from 2d Battalion, 23d
Marines deployed to Guantanamo Bay, Cuba for 120 days. The reinforced
platoon is supporting the ongoing Guantanamo Bay security mission
effectively replacing an active duty platoon commitment. With 25 days
workup and 5 days stand-down, the platoon will be on active duty for a
total of 150 days. Initially planned for odd-year rotations, Marine
Forces Reserve is studying the feasibility of conducting the security
mission every year.
Marine Forces Reserve will also carry out the fiscal year 2002
UNITAS deployment to South America. Volunteers for this company-size
deployment are currently being identified to fill this six-month
commitment. After one year of drills and annual training focusing on
mission preparation, Marines will spend one month of full-time
preparation at Camp LeJeune, North Carolina beginning in May 2002. In
June 2002, the Marines will deploy to South America for 4\1/2\ months.
There will also be a post-deployment stand-down period of half a month.
Question. Last year we added 58 full time reservists for the Marine
Corps Reserve. How has that benefited your force?
Answer. The 4 officers and 54 enlisted Active Reserve end strength
increase was actually a rescission of the QDR reduction. The authority
you provided allowed us to retain 58 Marines we had been scheduled to
lose. The Marine Corps Reserve has assigned these 58 additional
personnel to small Marine Corps Reserve sites throughout the
continental United States. Small staffs of active duty Marines largely
administer the Marine Corps Reserve. These staffs provide for the day-
to-day operations, training and administration of the Reserve. They
have also historically provided community outreach through such means
as color guards, Toys for Tots, military funeral honors details, and
presentations to local organizations. Each staff is comprised not only
of administrative and logistics personnel, but with Marines qualified
to provide continuous training and equipment maintenance. A small site
typically includes approximately eight active duty Marines that provide
for the daily operations of company size (120-180 personnel) units. The
reserve force has benefited by an increased active duty presence that
can better manage the increasing operational tempo, heightened
readiness requirements and community outreach missions. These
additional personnel have increased numerous sites to the threshold
requirement of eight Marines and have kept staffing to previously
validated personnel requirements at other sites.
Question. I am concerned that the Department of Defense and your
services under-fund reserve forces military construction because they
know that Congress will add funding for these projects. Can you comment
on whether your ability to ensure your requirements is adequately
addressed through the future years defense plan and other budgetary
processes have improved?
Answer. The Commandant has stated that readiness of the operating
forces is the Marine Corps' highest priority, and that readiness rests
on four pillars: (1) Marines and their families, (2) ``legacy
systems'', (3) infrastructure, and (4) modernization. The challenge for
the Marine Corps is to maintain the strength of each, while achieving a
balance in the application of its resources. Within the parameters of
this fiscal challenge, the ability of the Marine Corps to ensure
adequate funding levels for reserve military construction through the
Future Years Defense Plan and the budget process has improved over the
past 4 years. The average level of funding for Marine Corps reserve
military construction, prior to Congressional adds, for the years
fiscal year 1993-fiscal year 1997 is $1.2 million. The average level of
funding for Marine Corps reserve military construction, also prior to
Congressional adds, for the years fiscal year 1998-fiscal year 2001 is
$4.8 million, a significant improvement. (These numbers do not include
funding for planning and design.) The Marine Corps will continue to
carefully weigh the many priorities involved in maintaining its
emphasis on operational readiness, and will provide a level of funding
for reserve military construction that addresses the most critical
requirements and is consistent with the best interests of the Marine
Corps.
Question. I remain concerned about reserve forces equipment
compatibility with the active components as we modernize our forces.
Can you please comment on how we ensure that your respective reserve
force remains relevant and deployable?
Answer. As part of our Total Force Policy, Marine Corps
modernization plans are accomplished as part of our single acquisition
objective process, wherein all initial quantities and planned
sustainability requirements for both the Active and Reserve component
are considered. This single acquisition strategy ensures the Reserve
receives the same equipment as the Active Component. Marine Forces
Reserve (MARFORRES) units are fully integrated into the active forces
for mission accomplishment across the complex spectrum of conflict.
MARFORRES is ready today, but its readiness has come at the expense
of investment in modernization and infrastructure. Reserve Marines are
working hard to maintain and improve equipment readiness. The key to
sustain the relevancy and deploy ability of the Marine Corps Reserve in
the long term is to continue to replace current legacy systems. The
funding level must be sufficient to accelerate the pace of Marine Corps
modernization in order to shorten the period of increased Total Force
expense for sustainment of the aging ``legacy'' systems. The Marine
Corps, with the help of Congress through the National Guard and Reserve
Equipment Appropriation and other congressional adds, is currently
upgrading the Reserve's 48 F/A-18A's with Engineering Change Proposal
583 (ECP 583)(22 of 48 upgrades are funded) and 21 CH-53E's with
Helicopter Night Vision System (HNVS) kits (10 of 21 upgrades are
funded). In fiscal year 2008, the Marine Corps, plans to field High
Mobility Artillery Rocket Systems (HIMARS) to the Reserve. In the
future, the Marine Corps plans to transition to the MV-22 helicopter
and the Advanced Amphibious Assault Vehicle (AAAV). During this
transition period, a mixed fleet of helicopters and amphibious vehicles
will exist for several years in the Active and Reserve units. The
Marine Corps is dedicated to planning to assure a coordinated delivery
of the aircraft and vehicles while maintaining a high state of
readiness across the Active and Reserve units.
Question. Describe your plan to upgrade your fleet of F/A-18A
aircraft and rotary wing aircraft. Do you have the resources you need?
Answer. Marine aviation possesses limited resources across the
board to invest in modernization and recapitalization of aircraft. The
Marine Corps includes both active and reserve requirements in
determining funding priorities. Our plan is to mirror the reserve with
the active component. Current upgrades to accomplish this goal are as
follows:
F/A-18A.--The current program objective is to upgrade 76 F/A-18As
with Engineering Change Proposal 583 (ECP-583); 28 active and 48
reserve F/A-18As. This upgrade will increase the capability of the F/A-
18A to a level compatible with the F/A-18C lot XVII, an aircraft eight
years newer. This increase in capability will help mitigate strike
master plan shortfalls and increase operational flexibility across the
spectrum of conflict by increasing interoperability of F/A-18 assets.
Current program funding upgrades 44 F/A-18As, 22 active and 22 reserve
through fiscal year 2003. This program currently requires $246.5
million to complete.
CH-46E.--Based on the current transition plan and introduction of
the MV-22,the remaining Marine Corps CH-46s are scheduled to receive
the Engine Reliability and Improvement Program (ERIP). This program's
current requirement is fully funded and, thanks to Congressional
support, we were able to start it one year early (in this fiscal year).
Current estimate is that this program will be complete in fiscal year
2007. As the restructuring of the MV-22 program becomes more
definitive, Marine Aviation will have to examine how many more ERIP
kits to procure to ensure the CH-46 remains operationally effective
until replaced by the MV-22.
The UH-1N and AH-1W will continue to provide the combat assault
support and attack helicopter requirements for the Marine Corps through
2014. The key operational and safety modifications for the aircraft
include communication and navigation upgrades that provide aircrew with
precision navigation and modernized communication equipment (radio
suite); fielding of a modernized electronic warfare suite to enhance
aircraft survivability against Surface-to-Air Missiles; aircraft safety
upgrades to increase system reliability and operational effectiveness;
and enhancements to the day/night war fighting capability through the
UH-1N Navigational thermal Imaging System (NTIS).
The goal of the current operational safety improvement programs is
to eliminate safety hazards, remedy obsolescence and maintain
significant operational capability until the fielding of the
replacement aircraft--the UH-1Y and AH-1Z. The H-1 Upgrade Program is a
key Marine Corps modernization effort designed to resolve existing
safety deficiencies and significantly enhance the operational
effectiveness of both the UH-1N and the AH-1W. Aircraft agility,
airspeed, range, and mission payload are only a few of the significant
improvements included in the Upgrades Program. Additionally, the
commonality gained between the UH-1Y and AH-1Z (projected to be 85
percent) will significantly reduce life-cycle costs and logistical
footprint, while increasing the maintainability and deploy ability of
both aircraft.
This program extends the service life and increases the operational
capabilities of both aircraft through improvements in crew and
passenger survivability, payload, power available, endurance, range,
airspeed, maneuverability and supportability. Both aircraft include a
fully integrated cockpit upgrade to reduce cockpit workload and improve
mission effectiveness.
CH-53E.--Upgrades to the CH-53E include the procurement of Forward
Looking Infrared Helicopter Night Vision System (HNVS) ``A'' and ``B''
Kits. 20 HNVS ``A'' Kits remain to be procured (11 of those are in the
Reserves) and 105 HNVS ``B'' Kits (10 in the Reserves) remain to
fulfill this upgrade requirement.
______

Question Submitted by Senator Christopher S. Bond

Questions Submitted to Major General James E. Sherrard, III

Questions Submitted by Senator Ted Stevens

FISCAL YEAR 2001 FUNDING

Question. Please describe in detail your fiscal year 2001 funding
challenges, and the impact of those challenges on your ability to carry
out your mission.
Answer. Our top funding challenges are initiatives to improve
recruiting and retention of Reserve personnel, an aging fleet and a
decreased modernization budget.
Recruiting and Retention.--The Reserve achieved 86 percent of its
fiscal year 2000 recruiting goal--we fell short by 1,502. Although
below our accession goal, the Reserve achieved 98.1 percent overall end
strength and filled over 98 percent of our wartime-tasked positions;
accessions were highest since fiscal year 1995. We are experiencing the
challenges of a robust economy, higher college enrollment, a lower
propensity to enlist and a shrinking pool of potential prior service
accessions. The Reserve exceeded its retention goal of 82 percent in
fiscal year 2000 with an overall retention rate of 88 percent.
Retention rates are healthy for the enlisted force and support
officers; however, we are concerned about the retention of pilots,
navigators and non-rated operators. Current Air Force Reserve Command
(AFRC) pilot inventory has leveled out at approximately 3,440, while
the requirement is 3,667. Level and retention of full-time personnel is
a concern due to the high personnel tempo (PERSTEMPO).
Aging fleet.--The following shows the age of the AFRC fleet, by
aircraft:

C-5A.............................................................. 32.0
C-141C............................................................ 35.0
KC-135E........................................................... 42.0
KC-135R........................................................... 39.5
C-130E............................................................ 37.5
C-130H............................................................ 11.1
C-130J............................................................ 5.0
WC-130H........................................................... 35.5
WC-130J........................................................... 3.0
B-52H............................................................. 39.5
A/OA-10........................................................... 21.0
F-16C/D........................................................... 14.0
HC-130N........................................................... 31.0
HC-130P........................................................... 35.4
HH-60G............................................................ 10.5
C-130E............................................................ 37.0

An aging fleet leads to increased Operations and Maintenance (O&M)
spending for maintenance.
Decreased modernization budget.--With an aging fleet and no new
systems projected, we are attempting to modify older aircraft (KC-135,
C-5A, F-16 and A-10), but investment funding for modifications remains
severely constrained. No follow-on mission for our C-141 unit-equipped
squadrons. Reengining of our last two KC-135 units.
Judgement Fund.--An additional challenge we are facing is the $11.9
million owed to the U.S. Treasury's Judgement Fund. As you know, this
bill must be paid out of Military Construction (MILCON) monies. If we
are forced to pay this must-pay bill, our fiscal year 2002 MILCON
budget will be severely impacted, if not decimated.

RESERVES

Question. I am concerned that we are at the fine line of over using
the Reserves. While you want to be relevant, this over reliance
stretches your force, and strains families and employers. How would you
address this concern?
Answer. We, too, are concerned about the effect the high tempo has
on our Reservists, their families, and their civilian employers. Today,
the average Air Force Reservist performs 90 duty days, far above the
required ``one-weekend-a-month, two-weeks-per-year'' of years past.
The high tempo has also had an impact on our ability to conduct
training. Personnel who deploy/use annual tour to support taskings
outside the unit are getting valuable experience; however, they are not
taking care of some of the recurring training requirements which would
have been addressed during their annual tour had they performed their
duty at home station. We must then ask our personnel to give additional
time to ``catch up'' on the training requirements, which were not part
of the deployment scenario. This places a burden on many traditional
Reservists, who are attempting to balance the demands of their reserve
duty with those of their civilian job and family.
We are working to find ways to alleviate the stress caused by
increasing time away from home station. One way is participation in the
Expeditionary Aerospace Force, which has already given us greater
predictability in scheduling time away from home and work. We are
constantly working with civilian employers to keep the lines of
communication open and we support current legislation offering tax
incentives to employers who employ reservists. Additionally, we are
working with the active force to validate all current training events
for relevancy as well as looking for optional modes to deliver the
training.

RECRUITING AND RETENTION STATUS

Question. Please address your recruiting and retention status. What
challenges do you find manning your force, and what initiatives do you
have in place? Is there legislative authority you need that you don't
have?
Answer. The Reserve achieved 86 percent of its fiscal year 2000
recruiting goal--we fell short by 1,502. Although below our accession
goal, the Reserve achieved 98.1 percent overall end strength and filled
over 98 percent of our wartime-tasked positions; accessions were
highest since fiscal year 1995. We are experiencing the challenges of a
robust economy, higher college enrollment, a lower propensity to enlist
and a shrinking pool of potential prior service accessions. With
assistance from Congress, we are increasing our recruiting force by 50
in fiscal year 2001. As of April 2001, we are tracking at 104 percent
of our recruiting goal. The Reserve exceeded its retention goal of 82
percent in fiscal year 2000 with an overall retention rate of 88
percent. Retention rates are healthy for the enlisted force and support
officers; however, we are concerned about the retention of pilots,
navigators and non-rated operators. Current Air Force Reserve Command
(AFRC) pilot inventory has leveled out at approximately 3,440, while
the requirement is 3,667.
Current Recruiting and Retention Initiatives include: Active Guard/
Reserve (AGR) Aviator Continuation Pay (ACP); Reinstatement of full-
time unit Career Advisors; Special salary rate for Air Reserve
Technician pilots; Montgomery GI Bill (MGIB) kicker; Tuition
assistance; Prior Service and Nonprior Service enlistment bonuses for
critical skills.
Future Initiatives: Elimination of 1/30th rule for Aviation Career
Incentive Pay (ACIP) and Career; Enlisted Flyer Incentive Pay (CEFIP);
Basic Allowance for Housing (BAH) disparity for single Reservists;
Elimination of disparities between BAH I and BAH II; Extend time limit
on use of MGIB beyond 10 years; Adjust 14-year cutoff of bonuses to
incentivize beyond 20 years; Increase prior service enlistment bonus
from $5,000 to $8,000 to provide same authority as non-prior service
bonus.

RESERVE PILOTS

Question. How are you doing with pilot retention? Are reserve pilot
pays and bonuses properly structured to retain your experienced pilots?
Answer. Retention of pilots is of great concern. Historical trends
have been toward retention of pilots until retirement. Recent
indicators reveal an increase in number of Air Reserve Technicians
(ARTs) who are leaving early. The Reserve has instituted a special
salary rate for technician pilots. Major airlines hiring, high TEMPO
and perceptions of better civilian pay and working conditions are
reasons for leaving. Active Guard and Reserve (AGR) pilots are
currently receiving aviation continuation pay like their active duty
counterparts.
The following slide illustrates the retention rates for the Reserve
pilot force:

RESERVE PILOT RETENTION
[AFRC Pilot Retention Rates]
------------------------------------------------------------------------
Percent
-----------------------------------------
Fiscal year--
-----------------------------------------
1996 1997 1998 1999 2000
------------------------------------------------------------------------
Pilots total (AFRC)........... 93.9 90.0 89.3 89.9 87.7
Pilots (ARTs) (ART pilots 86.1 83.8 85.5 84.4 80.2
retained as ARTs)............
Unit AGR...................... ...... ...... ...... 100 100
------------------------------------------------------------------------
Approximately 12 percent of AFRC ART pilot force moves to Traditional
Reserve yearly. Number of pilots transitioning from TR to ART nearly
compensates for ART to TR transition.
Major Airlines hiring, high OPTEMPO and perceptions of better civilian
pay and working conditions are reasons being given for leaving prior
to reaching MSD.

AEROSPACE EXPEDITIONARY FORCE

Question. Please describe how the Air Force's transition to the
aerospace expeditionary force, or AEF, will impact the Air Force
Reserve.
Answer. The Air Force Reserve is an active and enthusiastic
participant in the Expeditionary Aerospace Force (EAF). The EAF brings
predictability and stability, better incorporates the total force,
provides a reconsitution period and provides the tools to better manage
the force. During EAF Cycle 1, AFRC deployed 14,249 personnel and
during Cycle 2, 12,425 personnel. All personnel are volunteers and may
rotate on a 15 day in country schedule. We believe this is a win-win
situation for the Reservist (it allows them to use their wartime
skills), their employers and the family.

RESERVE MILCON

Question. I am concerned that the Department of Defense and your
services under-fund reserve forces military construction because they
know the Congress will add funding for these projects. Can you both
comment on whether your ability to ensure your requirements are
adequately addressed through the future years defense plan and other
budgetary processes has improved?
Answer. Overall, funding for the Air Force Military Construction
(MILCON) program has decreased significantly. In addition, aging
infrastructure continues to require additional repair and replacement,
further stressing the Air Force MILCON budget.
Air Force Reserve Command (AFRC) requirements are included in the
total Air Force program for initial development. The Air Force then
validates and scores each project according to the MAJCOM priority, the
type of project and mission impact.
Because of limited resources and other must-pay bills, AFRC is
awarded only one or two projects per year. To illustrate, in fiscal
year 2001, the Air Force submitted $595.5 million in MILCON priorities,
including $14.9 million (2.5 percent) for AFRC. The additional $21.7
million in the Reserve MILCON budget came from Congressional adds,
which we greatly appreciate.
An additional challenge we are facing is the $11.9 million owed to
the U.S Treasury's Judgement Fund. As you know, this bill must be paid
out of MILCON monies. If we are forced to pay this must-pay bill, our
fiscal year 2002 MILCON budget will be severely impacted, if not
decimated.
The following is a current list of approved Air Force Reserve
military construction projects:

[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal
Year State/Base Project Type PA
----------------------------------------------------------------------------------------------------------------
2002AL: Maxwell AFB Maintenance Hangar........................ Current Mission......... 9,276
2002IN: Grissom ARB ADAL Maint Hangar......................... Current Mission......... 5,700
2002MO: Whiteman AFB Squadron Operations Facility.............. Current Mission......... 3,350
2002NY: Niagara Falls ARS Visiting Quarters Phase I................. Current Mission......... 8,300
2002PA: Willow Grove ARS Joint Wing Headquarters................... Current Mission......... 5,700
----------
Fiscal Year 2002 .......................................... ........................ 32,326
Total
==========
2003AL: Maxwell AFB Logistics Complex......................... Current Mission......... 5,000
2003CO: Peterson AFB Fuel Systems Maintenance Dock............. Current Mission......... 7,350
2003DE: Dover AFB Wing Headquarters Facility................ Current Mission......... 3,300
2003MA: Westover ARB Security Forces Operations................ Current Mission......... 3,900
2003MN: Minn-St Paul ARS Hangar Complex............................ Current Mission......... 15,197
2003NC: Seymour Johnson AFB Civil Engineer Maintenance Facility....... Current Mission......... 2,000
----------
Fiscal Year 2003 .......................................... ........................ 36,747
Total
==========
2004CA: Travis AFB Squadron Ops/Aircraft Gen Squad........... Current Mission......... 9,736
2004FL: Homestead ARS Services Training Facility................ Current Mission......... 6,000
2004GA: Dobbins ARB Construct South Cobb Entrance............. Current Mission......... 3,200
2004MA: Westover ARB Base Operations........................... Current Mission......... 2,132
2004MI: Gen Mitchell ARS ADAL Composite Training Facility.......... Current Mission......... 2,300
2004MN: Minn-St Paul ARS Aircraft Maintenance Shop Complex......... Current Mission......... 6,200
----------
Fiscal Year 2004 .......................................... ........................ 29,568
Total
==========
2005MN: Minn-St Paul ARS Consolidated Training Facility............ Current Mission......... 3,121
2005NJ: McGuire AFB ADAL Wing HQ Facility..................... Current Mission......... 3,550
2005PA: Pittsburgh ARS Renovate Lodging Facility B-216........... Current Mission......... 3,016
2005PA: Pittsburgh ARS Consolidated Lodging Facility............. Current Mission......... 18,200
----------
Fiscal Year 2005 .......................................... ........................ 27,887
Total
==========
2006IN: Grissom ARB Services Complex--Phase 3................. Current Mission......... 12,773
2006OH: Youngstown ARS Consolidated Mission Support Facility..... Current Mission......... 9,410
2006PA: Willow Grove ARS Avionics Shop............................. Current Mission......... 2,500
----------
Fiscal Year 2006 .......................................... ........................ 24,683
Total
==========
2007FL: Eglin AFB (Duke Fld) Civil Engineer Training Facility.......... Current Mission......... 3,200
2007GA: Dobbins ARB Training Center........................... Current Mission......... 4,200
2007IL: Scott AFB Wing HQ Facility.......................... Current Mission......... 3,700
2007MA: Westover ARB Vehicle Maintence Facility................ Current Mission......... 5,191
2007NJ: McGuire AFB Airlift Control Flight Facility........... Current Mission......... 2,000
----------
Fiscal Year 2007 .......................................... ........................ 18,291
Total
----------------------------------------------------------------------------------------------------------------

RESERVE FORCES EQUIPMENT COMPATIBILITY

Question. I remain concerned about reserve forces equipment
compatibility with the active components as we modernize our forces.
Can you please comment on how we ensure that your respective reserve
force remains relevant and deployable?
Answer. Like our active duty counterparts, Air Force Reserve
Command (AFRC) is operating an aging fleet. This aging fleet leads to
increased Operations and Maintenance spending for maintenance. Like our
active duty counterparts, Air Force Reserve Command (AFRC) is operating
an aging fleet. This aging fleet leads to increased Operations and
Maintenance spending for maintenance. This, compounded with a decreased
modernization budget for new equipment and modification of old
equipment, will lead to additional challenges in the near future.
AFRC is responsible for providing the war-fighting Commander in
Chief (CINC) with the most capable forces possible. We need to continue
a robust aircraft modernization program. Primarily due to funding
constraints, our gaining Major Commands (GMAJCOMs) have been unable to
adequately meet both Reserve and active requirements. Congress has
traditionally provided AFRC with additional National Guard and Reserve
Equipment Account (NGREA) monies to augment these equipment upgrades
that our GMAJCOMs have been unable to provide. Unfortunately, NGREA
funds have decreased from a high of $50 million to the current level of
$5 million. Our combat aircraft are fast becoming dated and in need of
modernization. NGREA has, in the past, permitted AFRC to have a solid
modernization program. Without NGREA, it is safe to say that the
Reserve would not have a force with the capability it has today.
Without NGREA, key Reserve modernization programs are falling below
the current funding line.

ROTATION POLICY

Question. I understand the Air Guard has shifted to a 90-day
rotation policy to reduce perstempo. Does the Air Force Reserve have a
similar policy and if so, how is this working?
Answer. The Air Force Reserve is an active and enthusiastic
participant in the Expeditionary Aerospace Force (EAF). The Aerospace
Expeditionary Force rotates equipment and personnel on a 90-day
rotation. When tasked, Air Force Reserve Command (AFRC) policy requires
members to serve in country a minimum of 15 days, and tours in excess
of this 15 days must be accomplished by volunteers. This rotation of
personnel means the maximum required commitment of members to serve is
19 days, including travel time. We have used this rotation schedule
throughout EAF Cycles 1 and 2 with great success. During EAF Cycle 1
the AFRC deployed 14,249 personnel and during Cycle 2, 12,425
personnel. We believe this is a win-win situation for the Reservist,
their employers and the family.
______

Questions Submitted by Senator Christopher S. Bond

NATIONAL GUARD RESERVE EQUIPMENT ACCOUNT

Question. It is my understanding that the percentage of funding the
Active components devote to their respective Reserve components varies
from Service to Service.
Can each of the Reserve Chiefs (Air Force Reserve, Marine Corps
Reserve, Naval Reserve, Army Reserve) recount for me the impact, be it
negative or positive, of DOD's decision to reduce the size of the
National Guard Reserve Equipment? Are your respective Active components
providing adequate resources for you to perform your mission?
Answer. Like our gaining major commands (GMAJCOMs), Air Force
Reserve Command (AFRC) is responsible for providing the war-fighting
CINC with the most capable forces possible. We need to continue a
robust aircraft modernization program. Primarily due to funding
constraints, our GMAJCOMs have been unable to adequately meet both
Reserve and active requirements. Congress has traditionally provided
AFRC with additional National Guard and Reserve Equipment Account
(NGREA) monies to augment these equipment upgrades that our GMAJCOMs
have been unable to provide. Unfortunately, NGREA funds have decreased
from a high of $50 million to the current level of $5 million. Our
combat aircraft are fast becoming dated and in need of modernization.
NGREA has, in the past, permitted AFRC to have a solid modernization
program. Without NGREA, it is safe to say that the Reserve would not
have a force with the capability it has today.
Without NGREA, key Reserve modernization programs are falling below
the current funding line.
______

Questions Submitted to Lieutenant General Russell C. Davis

Questions Submitted by Senator Ted Stevens

SUPPORT OF OUR NATIONAL MILITARY STRATEGY

Question. During this year, the National Guard will deploy more
personnel throughout the world in support of our national military
strategy than anytime in our nation's history. What are your major
challenges in sustaining that level of support throughout the remaining
months of the fiscal year?
Answer. For the Army National Guard, short term ``surge'' manpower
capability in the form of ``Active Duty for Special Work'' (ADSW) to
coordinate the reception, staging onward movement and integration of
National Guard troop rotations overseas is critical to achieve the
maximum readiness value from the training dollars already invested.
Full time manning to adequately plan for and coordinate the execution
of Overseas Mission Support. Current manning levels are inadequate and
cause needless confusion, additional staff work and overburdens the
remaining staff members.
For the Air National Guard, there are three major readiness
challenges we are currently facing. The first challenge is three-level
school availability. The ANG has experienced a shortage of 3-level
technical schools during the past two years, due in part to the
unforeseen increase in non-prior service accessions. This shortfall has
created difficulty in achieving 3- and 5-level manning goals. This
shortage further affects deployments, as most career fields require a
5-level for overseas support.
The second challenge is manpower shortages. The ANG recently
accomplished a complete review of both our full-time and traditional
guard manpower requirements needed to support the AEF now and well into
the future. The results of this effort validated a requirement of 2,048
additional full time manpower resources. Historically the ANG has been
resourced as a Respond (Cold War) force with limited full time manpower
to operate and maintain facilities, repair aircraft/equipment, and
train the drilling force. Now with a formalized AEF construct and
increasing support requirements, the ANG must begin to be resourced
properly for both training and increased Optempo. Thus far we have
funded 1,151 of our requirement through internal ANG offsets and
through funding and support received from the Air Force during the POM
process, leaving an unfunded requirements of 897 full-time positions.
Increased Optempo and aging aircraft and weapon systems are driving
increased maintenance workloads to ensure aircraft and systems are
available for training and deployment. Our review also identified
shortfalls in infrastructure and communications, additional air traffic
control and combat communications operators, additional full time
aircrew and crew compliment adjustments in the airlift and air
refueling mission areas. We are continuing our efforts to obtain the
balance of the funding and end strength required.
The third challenge is depot quality and timeliness. This continues
to be the top issue for Logistics. Constantly shifting schedules and
consistently unreliable output dates and products from the depots have
caused disruptions and difficulty in meeting other scheduled
maintenance. This has been an enormous problem for the KC-135 and C-5
fleets. Twenty nine percent of the ANG KC-135 fleet is in depot status.
Less than half of the ANG C-5 fleet is available for unit missions. In
additional to lack of availability, depot quality is a serious concern
for most aircraft types. Of particular concern are recent incidents of
F-100-PW-220 engines with tooling found inside depot-produced Low
Pressure Turbine Modules and perhaps other components in our single-
engine F-16s. This is extremely serious, as the ANG has experienced
two-engine related Class A mishaps since August within our F-16 fleet.
Assessments of our field LGs indicate there could have been more had
not Jet Engine Intermediate Maintenance personnel identified engine
abnormalities during ground operations.

DIFFICULTIES IN SUPPORT OF MISSIONS

Question. From a National Guard perspective, what is the
difficulties in supporting such a broad spectrum of federal and state
missions and civil support matters?
Answer. With the present Army National Guard force structure we are
meeting our primary and secondary missions for the federal or ``DOD
community'' and governors of the states and territories. Any reduction
in the existing force structure will have a direct impact on meeting
the broad spectrum of missions, especially the missions in support of
Military Support to Civil Authorities (MSCA) operations requiring
unique capabilities only found in the military are removed due to force
structure reduction. This impacts the states as well as surrounding
states that utilize those capabilities. At this time the greatest
impact on the National Guard is the lack of authority for the Title 32
AGR and Technician personnel to support Non-DOD Federal (i.e. Wild land
Fire Fighting) and state (i.e. State Active Duty (SAD) missions in
their full-time federal status. As it exists in Congressional
Appropriations Language, Title 32 Active Guard Reserve (AGR) personnel
are prohibited the authority to perform federal or state duty during
Disasters Man-made or Natural reduces the National Guards within the
state or across state lines as directed by the Governors of the States
and Territories. This has grave implications since most key leadership
positions within the National Guard units are usually filled by full-
time members, who are most likely, the most skilled in their military
roles and functions within the unit. This decreases the response and
skill-base required to respond in a timely manner to the ever-
increasing requirement to support not just the strict war-fighting
missions but also the ``domestic disaster response and homeland
security'' missions that are continuing to be an increasing integral
part of the National Security Plan.
For the Air National Guard, PERSTEMPO is the primary difficulty.
The AEF has become the primary driver for ANG manning levels, however
there are still numerous deployments that are still required to sustain
the war-fighting capability. The ANG has looked to re-engineering to
put the fulltime and traditional manpower in the AEF-driven high-
PERSTEMPO jobs. For the most part, re-engineering will fix most of the
shortfalls but there are still some problem areas. Most notably is the
Low Density/High Demand manpower shortfalls within the Combat Rescue
units. The three ANG Rescue units do not have enough Primary Authorized
Aircraft or manpower to sustain the current level of participation
without relief. Their AEF commitment may need to be reduced. ANG Ranges
and Combat Readiness Training Centers are currently funded at 78
percent of authorized strength and are not able to support many of the
requirements of their customers. This has impacted directly on the
ability to support both daily training capability for AEF preparation
and deployments for AEF spinup. There has been an increased emphasis on
night operations over the last several years, but daytime requirements
remain. This has forced ANG Ranges to operate on a two shift schedule
with no additional manning.
These are just two examples of our personnel being tasked beyond
their availability. While state missions and civil support matters are
not a daily concern, personnel must be available to meet their state
commitment whenever needed. The historical State mission many times
becomes Federal when a FEMA emergency declaration is made.

RECRUITING RESOURCES

Question. As the number of active duty personnel transitioning to
the National Guard has decreased, your recruiting requirements have
increased. Does the National Guard bureau have the recruiting resources
it needs?
Answer. The Army National Guard does not have the resources
necessary to carry out its recruiting and retention mission. In order
to maintain our end strength mission of 350,000 soldiers in support of
the National Military Strategy, the Army National Guard requires
additional funding in Advertising, Recruiter Support, and Incentives.
We are also experiencing a manpower shortage within our full-time
recruiting force.
Additional advertising funding is necessary for the Army National
Guard (ARNG) to penetrate markets previously neglected or overlooked.
The goal is to improve the quality of the ARNG force within Test Score
Category (TSC) I-IIIA personnel to meet the Total Army Quality Goal of
67 percent; and 90 percent Tier I (high school degree graduates and
above). Simultaneously, our goal is to increase the diversity of the
force to more accurately reflect the general population. We currently
have an unfinanced requirement (UFR) for recruiter support of $18.384
million for fiscal year 2002. This includes efforts to recruit and
retain officer, warrant officer, and enlisted personnel in the ARNG.
Other programs will target leaders at the Company and Battalion levels
to decrease attrition and increase retention of soldiers. Also, under
development are special programs directed at diversity. This is a
priority for the ARNG.
GSA vehicles support currently has a UFR of $5.478 million. The
increased cost of GSA vehicles is a result of higher fuel costs and the
increased travel requirements related to the increased recruiting and
retention mission.
The incentive (bonuses) UFR for fiscal year 2002 is $20.051
million. The UFR is the result of an increase in the number of non-
prior service (NPS) enlistment's needed to meet the end strength goal.
The bonuses are needed to attract quality applicants to the ARNG while
competing against other services and the civilian sector. A residual
effect of an increase in NPS enlistments is anniversary payments for
the member.
We are experiencing a shortfall in full-time manning due to the
``cap'' on the ARNGs Active Guard Reserve (AGR) force. Unlike other
services, for the ARNG to plus-up recruiting, it would come at the
expense of full-time unit personnel. This movement of AGR personnel
would adversely impact unit readiness. Hence, this option is not in the
best interest of the organization. In lieu of that, we have been
effectively utilizing Active Duty for Special Work (ADSW) personnel to
augment the full-time recruiting and retention force. These ADSW
personnel are current ARNG members hired as temporary help.
We have additional concerns addressing our shortage of company
grade officers in the ARNG. While we are working with Cadet Command to
increase the number of second lieutenant accessions through the Reserve
Officer Training Corps (ROTC), an obstacle we face in commissioning
enlisted soldiers as lieutenants through our Officer Candidate Schools
is the automatic loss of the Student Loan Repayment Program (SLRP).
Section 16301 of 10 United States Code makes SLRP contingent on
enlisted service, and therefore, any initiative to authorize repayments
for service in a commissioning program or as an officer would require a
statutory amendment.
Last year, the Air National Guard Recruiting and Retention Branch
was authorized an additional sixty-five positions to be distributed
over a three year time frame. Many of these positions will be placed on
active Air Force installations to try and capture the departing airmen.

GUARD MILITARY CONSTRUCTION

Question. I am concerned that the department under-funds guard
military construction because they know the Congress will add funding
for these projects. Has your ability to ensure your requirements are
adequately addressed through the future years defense plan and other
budgetary processes improved?
Answer. The Army is severely underfunded for its MILCON, and its
Sustainment, Revitalization, and Modernization of existing real
property. The Army has a valid process for determining ARNG
requirements. Nevertheless, in fiscal year 2001, $59 million was
programmed for ARNG MILCON, which is less than ten per cent of the
requirement, and ARNG received $224 million for sustainment,
revitalization and modernization, which is about 50 per cent of the
sustainment requirement of the Army's Installation Status Report (ISR).
In previous years, the AF would fund a portion of our MILCON
projects, and the ANG would present an unfunded priority list that
would partially be funded by Congressional adds. Together, the AF funds
and the Congressional adds would equal our historic funded position.
That is no longer a viable process. It was degraded by language in the
fiscal year 2001 Authorization Bill that constrained us to strictly a
funded FYDP. The ANG maintains that the funded portion of the FYDP does
not adequately represent our requirements. As this was an fiscal year
2001 change, it is too soon to predict the success of adequate funding
through the FYDP and other budgetary processes.

GUARD EQUIPMENT

Question. I remain concerned about guard equipment compatibility
with the active components as we modernize our forces. How do we ensure
that the guard remains relevant and deployable?
Answer. The Army's ability to execute full spectrum operations in
support of the National Military Strategy, Joint Strategic Capabilities
Plan and the war fighting Commander in Chiefs is largely contingent on
bridging the interoperability gap between analog and digitally equipped
units as we transform. The Army must identify and resource the minimum
essential digital capabilities required to maintain command, control
and situational awareness across the entire force. Less modernized
units must be fully capable, sustainable and interoperable.
The ANG always seeks to acquire and maintain the most capable and
effective aircraft fleet possible. This desire is unfortunately
sometimes constrained by fiscal and operational realities imposed upon
us from external sources. However, there is an on-going list of
aircraft modernization requirements to ensure the ANG is able to
continue to meet its commitments. That list is continually being worked
and funded whenever possible. The Air National Guard is a full and
equal partner in every phase of the Air Force Corporate Budget Process.
We have representation on every panel as well as the Air Force Group,
Air Force Board, and the Air Force Council.
Funding appropriated within the National Guard and Reserve
Equipment Account enables the National Guard to procure items which are
critical in nature. Both Army and Air National Guard components
appreciate the flexibility inherent in the NGREA.

TOUR LENGTH POLICY

Question. With the shift to putting the Army Guard in the regular
Bosnia rotation, has the National Guard Bureau and the Joint Chiefs of
Staff considered reducing the tour length policy in this area?
Answer. The Army National Guard has been following the Chief of
Staff, Army rotational policy guidance of 179 days in theater for
Balkan operations. The Army along with the Army National Guard has
discussed shorter rotations such as 120 days or 90 days for the
Balkans. The Army National Guard currently deploys units on shorter
rotations to South West Asia and has reduced rotational lengths for
lawyers, medical and aviation personnel. Discussion continues between
both staffs on the feasibility for shorter Balkan rotations and the
potential impacts on units, families, employers, and communities.
Funding is also a consideration, such as added transportation
requirements for personnel and equipment and training site usage. As
the Guard takes on more of a role in the Balkans, it will continue to
work towards better rotational solutions that will reduce Personnel
Tempo (PERTEMPO) and OPTEMPO (Operational Tempo) for all components of
the Army.
______

Questions Submitted by Senator Christopher S. Bond

FULL-TIME MANNING

Question. General Davis, it's evident that the operations tempo of
recent years has placed an increased burden on not only our active
forces but our Guard and Reserve forces as well. It is reported that
again this year one of the top priorities for the National Guard is the
need to increase the number of full-time personnel. I understand many
Army National Guard units stand at on 38 percent of their required
manning, down from 50 percent just 12 years ago. What are your full-
time manning requirements and how does this shortage impact readiness
and the ability of the Guard to perform its state and federal missions?
Answer. The Army has validated a full-time support manpower
requirement of 41,321 Active Guard Reserve (AGR) and 42,329 Military
Technician personnel for the Army National Guard. Based on Army
personnel readiness metrics and mobilization deployment scenarios,
there is a minimum acceptable level of manning necessary to maintain
required levels of readiness. For the Army National Guard (ARNG) this
minimal level of support equates to 30,402 AGR and 29,329 Military
Technician personnel, or approximately 71 percent of the full-time
support requirement.
Currently, ARNG full-time support levels are well below that 71
percent level. The fiscal year 2001 Appropriations and Authorizations
Acts provided funds and authorizations for end strengths of 22,974 AGR
and 24,728 Military Technician personnel, for an overall level of
approximately 57 percent of requirements.
However, we resource units using a first-to-fight, first-resourced
methodology. Prior to fiscal year 1996, the ARNG was able to resource
all its units at a minimum of 50 percent with our highest priority
units manned between 70-75 percent of full-time support requirements.
Due to competing priorities for limited resources, our later deploying
units today are resourced at only 38 percent of their full-time support
requirements while our highest priority units are resources only at
approximately 65 percent.
Full-time support personnel are critical enablers in ensuring ARNG
readiness. They provide; administrative, payroll, supply, training,
maintenance and recruiting support at unit level. With a work force
manned well below the level needed to maintain minimum required
readiness levels, the impact is an erosion of readiness to complete
both the federal and state ARNG missions. Many unit level commanders
have attributed a decline in readiness to inadequate levels of full-
time support.

ARMY AVIATION MODERNIZATION PLAN

Question. General Davis, over the last 10 months we've heard
alarming reports about the health of our Army National Guard Aviation
resources. I understand there is a massive shortage of utility, attack
and reconnaissance aircraft due to the retirement of legacy aircraft
and the lack of replacements over the upcoming years. Many aircraft in
the Army Guard have been grounded because of safety issues and this
severely affects the Guard's ability to perform both state and federal
missions.
I have a letter from the National Governors Association citing a
shortage of more than 300 UH-60 Black Hawk helicopters that also states
that more than 600 of the Guard's UH-1 Huey helicopters (75 percent)
are usually not working due to mechanical failures. It's almost
unbelievable that the Army's modernization plan calls for only 10
helicopters per year to be procured through fiscal year 2007. If my
math is correct this will add up to 60 aircraft over 6 years and with a
requirement for upwards of 300 aircraft it will take more than 20 years
to resolve the shortfall. And this does not begin to address our attack
helicopter needs.
How is the current state of affairs in Army Guard aviation
impacting readiness, retention, and safety, and your ability to meet
state and federal mission requirements? And are you getting any signals
from Army or the Department of Defense that this situation is going to
get the type of priority necessary to turn this sad state of affairs
around?
Answer. Please allow me to refer this question to General Schultz
for a more detailed explanation.
General Schultz. The full details of the revised 2001 Army Aviation
Modernization Plan (AAMP) are not yet approved by the Chief of Staff
Army (CSA) nor released to the ARNG. However it is certain that there
will be continuing significant short and long term impacts on our ARNG
aviation units and their parent States.
In the short term the repeated grounding of the Army National Guard
(ARNG) Vietnam-era AH-1 and UH-1 aircraft, combined with the pending
full retirement of both fleets (AH-1 in fiscal year 2001 and UH-1 in
fiscal year 2004), severely limits both our unit and individual aviator
readiness. In addition, units with these older aircraft are no longer
deployable to meet Federal contingency requirements, and also have a
rapidly declining ability to respond to State emergencies.
In the long term the Army's current procurement and cascade rates
(active to ARNG) of modernized aircraft are not adequate to make up the
differential. The current Army buy of new UH-60 utility helicopters is
10 per year, at which rate will take well over twenty years to bring
ARNG aviation units back to near full fill. Also these slow procurement
rates will not be mitigated to any significant degree by movement of
UH-60's from the active Army to the ARNG, with present Army planning
moving only about 6 UH-60 aircraft between now and the end of fiscal
year 2007. The Army has repeatedly stated it's desire to accelerate the
procurement of UH-60 helicopters for the ARNG, but does not currently
have sufficient resource allocations to accomplish this.

NATIONAL GUARD RESERVE EQUIPMENT ACCOUNT

Question. The National Guard Reserve Equipment Account, designed to
supplement Guard and Reserve shortfalls in annual funding is gradually
being eliminated. I understand this initiative was dependent upon the
Active component providing a greater share of annual appropriations to
the respective Guard and Reserve components. In your view, has the
gradual elimination of NGREA funding worked out as planned? Is the
Active component providing you adequate resources for you to perform
your wartime mission?
Answer. For the Army National Guard, the decline in NGREA funds has
not been completely offset by an increase in the P1R. The P1R continues
to reflect the Army's requirements and while it has benefited several
programs such as ADRS, other programs are not sufficiently funded. The
ARNG Top 25 list of unfunded equipment requirements reflects some of
the validated requirements that are not adequately funded by the P1R.
The NGREA benefits the ARNG by providing discretionary funds to
procurement to support the ARNG priorities versus the P1R, which is
developed, based on the Army's priorities. NGREA provides the
capability for short-term readiness solutions. NGREA funds must
increase annually because of inflation costs to maintain the current
rate of procurement.
Over the POM 02-07 $1.5 billion are devoted to ADRS Phase I & II
equipment procurement. ADRS only supports new activations/conversions
of CS and CSS units. Overall other programs have decreased and only
ADRS is fully funded.
Army fielding programs do not always completely include the ARNG
requirements. There are many examples of Army procurement not even
addressing the ARNG (M88A2, Wolverine, M1A2, M2A3, M3A3, etc.) The
Hydraulic Excavator or HYEX (fiscal year 2001) is an example where
NGREA funds had to be used to complete the ARNG requirement. If these
funds had not been available the ARNG would have been left with a
shortfall of 7 systems with no new procurement planned after the Army
procurement closed in fiscal year 2002 and no potential to fill these
with cascaded equipment for 10 to 15 years. Most program shortfalls are
too expensive to address with the current marginal NGREA funding.
The Army decision to delay procurement of FMTVs for the ARNG to
fill other requirements has delayed significantly the ARNG's ability to
eliminate obsolete trucks. Currently the fleet is aging faster than it
can be replaced. Recapitilization will have minimal benefit towards
this problem.
The current P1R slight upward trend over the last few years has not
off set the void left by the low procurement of the nineties. The
current POM is focused on Army priorities, which have marginal effect
on the ARNG's older equipment. The anticipated cascade of modern
equipment has not materialized. Funding for programs like Limited
Division XXI are expiring before the program is complete. Over the last
couple of years NGREA funds have been used to fill shortages in MTVs,
HEMTTs, SINCGARS radios, simulators, and night vision devices that will
have an immediate positive impact on readiness. Without these funds or
other congressional adds these shortfalls could not have been filled
for many years. Realistically the P1R is still inadequate as reflected
in the UFRs generated in each POM year. Without an increase in NGREA
funds the current readiness rates will decline due to equipment
shortages, which impact capability, training and retention.
For the Air National Guard, although the ``big ticket'' items, such
as aircraft and major weapons systems, have migrated to the AF
procurement appropriation, the NGREA account has been instrumental in
our efforts to modernize ANG aircraft and keep us fully relevant to
today's Total Force Military. Using NGREA, we have focused on four key
areas: precision strike, 24 hour operations, information dominance, and
enhanced threat survivability. Using NGREA and existing AF funding we
designed an F-16 modification program called Combat Upgrade Program
Integration Details (CUPID) that dramatically increased the combat
capability of the entire CAF F-16 Block 25/30 fleet and saved over $100
million in the process. CUPID coupled with another GREA success
program, the Litening II targeting pod, has allowed our F-16 units to
perform the full spectrum of day and night combat operations including
Precision Guided Munitions. The Situation Awareness Data Link (SADL)
another of many fine examples of NGREA successes. We were also able to
field Fighter Data Link on the ANG F-15 fleet using NGREA funding which
allows passing information between aircraft and aircraft to ground
without talking. FDL is the true F-15 force multiplier and, again,
using NGREA we are able to maintain full combat capability in the ANG
F-15 fleet. In the area of 24 hour operations, the ANG has led the way
in fielding Night Vision Imaging Systems across the CAF A-10, F-15 and
F-16 fleet. These NVIS systems are now the AF standard yet were
initially fielded using NGREA funding. We have made great strides in
modernizing our 40+ year old KC-135E tankers through the ongoing KC-
135E to R reengining program. We have also begun to field C-130 Cockpit
Armor to allow our C-130 units full protection of the aircrew during in
theater rotations. The flexibility NGREA funding gives us has allowed
the ANG to field commercial off the shelf solutions faster and cheaper
than otherwise able. These combat enhancements have been invaluable in
our efforts to modernize our fleet and support global taskings.

MILITARY CONSTRUCTION

Question. The current state of Army National Guard Military
Construction (MILCON) and Real Property Operations and Maintenance
(RPOM) activities suffers from an alarming backlog of over 1,300
unfunded MILCON projects representing a cost of $6 billion and an RPOM
sustainment requirement of $565 million. These deficiencies must
certainly have a devastating effect on Army National Guard training and
readiness. How is the Guard dealing with this alarming set of
statistics and what is the impact on recruiting, retention and the
ability of the Guard to perform their state and federal missions?
Answer. I agree that we have a challenge. Shortages in MILCON/RPOM
funding have prevented the Guard from revitalizing its facilities in a
timely manner. Who wants to join an outfit where the unit practices for
all sorts of contingencies in undersized, 1950s era facilities that
have never been maintained, and look like junk? Although the Army
National Guard is still a trained and ready force, overtime, ill-
maintained facilities hamper training and adversely effect retention.
Soldier morale is negatively impacted by operational requirements that
are more difficult to meet, and take a significantly longer time to
accomplish in undersized, over aged facilities that impede operations
rather than facilitating them. For example, after training, soldiers
are often forced to wash down their vehicles with a garden hose. Since
this takes so long, training must be curtailed earlier in the
afternoon, but soldiers still do not get home until late at night.
Since this impacts the family, the spouse discourages the soldier from
staying in the Guard.
To improve the condition of all the facilities, the Army has
developed an Army Facilities Strategy that includes the Army National
Guard. If funded, the Army Facilities Strategy will improve one third
of the readiness centers, all of ARNG's surface maintenance facilities,
all organizational equipment parking, and all of ARNG's training
classrooms over the next ten years. This is a major undertaking that
will significantly improve the condition of ARNG facilities, if funded.
Implementing the Army National Guard Division Redesign Study will
modernize facilities for the conversion of 12 brigades to Army Combat
Support Military Construction effects Guard training and readiness and
Combat Service Support missions. These programs will have a direct,
positive impact on ARNG training and operational capabilities.

COMMUNICATIONS EQUIPMENT (SINCGARS RADIOS)

Question. The Adjutant General of the State of Missouri, Major
General Havens, wrote me last month strongly urging me to do all I can
to secure funding for additional SINCGARS radio sets, which as you know
are essential for enabling ground forces to communicate with each
other. He noted that the ability of Missouri soldiers to communicate is
constrained by obsolete equipment. Units from Missouri which are part
of the 35th Infantry Division are scheduled to deploy to Bosnia for a
Stabilization Force rotation in 2003.
I'm told the shortage of SINCGARS radio sets is not just a Missouri
problem and that other Army National Guard Divisions are still
operating with Vietnam-era, VRC-12 radio sets which operate without
secure voice and data capability. How does this shortage of SINCGARS
radios impact the Guards ability to perform their required mission?on
recruiting, retention and the ability of the Guard to perform their
state and federal missions?
Answer. The continued use of the VRC-12 series radio when
interacting with active component units will bring communications
operations ``down to the lowest common denominator of capability.''
Single Channel Ground Airborne Radio System (SINCGARS) equipped units
(transmitting to the VRC-12) will have to switch off the frequency
hopping mode, use single channel, and accept a level of risk where
jamming and or listening in by enemy electronic warfare capabilities is
likely.
SINCGARS is an important part of modernization that is long overdue
in the communications realm of the Total Army. Ongoing cascading will
complete the fielding of the three ARNG divisions through 2002, with
the remaining five divisions (27,667) currently scheduled for fielding
through fiscal year 2004.
SINCGARS features digital data capability, integrated
communications security (COMSEC), an enhanced waveform that improves
the performance of voice and data, less weight, smaller size, and less
cost to sustain. All of these highly advanced capabilities are now
needed to redress the obsolescence problem of the VRC-12 series radios.
The VRC-12 radio only operates one channel at a time, typically stays
on single channel up to 24 hours, and operators must conduct a manual
frequency and COMSEC change. This affords an enemy equipped with Warsaw
Pact era electronic warfare hardware an excellent chance of finding the
signal, jamming, or listening in and collecting intelligence data that
could be used against U.S. forces.
The most significant improvement SINCGARS has over the VRC-12
series radio is the ability to frequency hop (FH). In this mode the
SINCGARS literally hops over 2,320 frequencies at 100 hops per second
and allows virtual jamming-free transmissions. With SINCGARS it is
virtually impossible for an enemy to match the hopping effect, and
clearly listen in on message traffic. Even attempts to jam large blocks
of frequencies are ineffectual, as the quick hopping over 2,320
frequencies (twice the number of VRC series radios) will ensure units
have plenty of open frequencies for their radios to transmit over.
If fielding beyond the enhanced separate brigades and the first
three divisions is not funded the five remaining divisions and a number
of non-divisional units will be unable to execute required missions,
deployments, and or other interactions with active component units.
Units retaining VRC-12 series radios will continue to perform state
missions not requiring the advanced capabilities of SINCGARS radios.
However, VRC-12 equipped units will continue to be plagued with high
maintenance costs and lack of repair parts as well as remaining a
challenge to equip for deployment.
______

Questions Submitted by Senator Robert C. Byrd

HART-RUDMAN

Question. The Hart-Rudman Report, page xiv, states; ``We urge in
particular that the National Guard be given homeland security as a
primary mission, as the U.S. Constitution itself ordains.''
Major General Allen Tackett and other Adjutants General believe
that Homeland Security should be one of the missions of the National
Guard, but not the only mission. The Guard should still maintain its
warfighting missions.
General Davis, do you agree with the Hart-Rudman recommendation?
Answer. I agree with the Hart-Rudman recommendation that homeland
security be a primary mission of the National Guard. Not surprisingly,
the National Guard is best equipped to handle the Homeland Security
Mission. For 364 years, the National Guard has been the first line of
defense for both state and nation. As demonstrated throughout history,
the National Guard has proven its ability to perform both domestic and
warfighting missions. We should maintain our warfighting mission and
the Adjutants General of the several states and territories agree with
that position. We also support President Bush's vision for an expanded
National Guard role in the homeland security mission.

HOMELAND SECURITY

Question. What additional resources would the National Guard Bureau
require in order to fulfill the broader mission of Homeland Security,
and in particular, please comment on the National Training Center for
Homeland Security (NTC-HLS) being developed at Camp Dawson, West
Virginia? (General Davis has been briefed on the concept of the NTC-HLS
and the Memorial Tunnel, the Robert C. Byrd Regional Training
Institute, and proposed Integrated Special Operations Training Facility
(ISOTF).)
Answer. The Chief, National Guard Bureau has completed the
congressionally directed Feasibility Study which reviews and highlights
the capabilities of both Camp Gruber, OK and Camp Dawson WV as a WMD
and counterdrug training center for the military and to the state and
local first responder community. The study discusses the proposal and
capability of each of the facilities mentioned particularly regarding
Camp Dawson. Collective and individual institutional training for the
WMD CST members has been and continues to be conducted at Fort Leonard
Wood, MO. The National Guards Civil Support Teams and their members
also attend WMD type training concurrently with first responders at
various locations. Additional locations used for more focused technical
training within their states and areas of responsibility of WMD CSTs
are:
--Dugway Proving Grounds, Utah (Collective--Bio emphasis)
--Aberdeen Proving Grounds, Aberdeen MD, (Mobile Analytical
Laboratory (MALS))
--Center for National Response, WV (confined space)
--FEMA National Fire Academy, Emittsburg, MD (HAZMAT & Emergency
Preparedness)
--DoJ Center for Domestic Preparedness, Anniston, AL (Civil Domestic
Terrorism)
--Energetic Materials Research & Testing, NM (explosives)
--National Center for Bio-Med Research & Training, LA (bio)
--National Exercise, Test & Training Center, NV (explosive, nuclear/
rad)
--National Emergency Response & Rescue Training Center, TX (emerg &
rescue)
As you can see, there are a variety of locations that WMD training
is currently being conducted. Using this ``menu'' of training areas,
leverage existing expertise from the nations ``experts'' and
significantly enhances the capabilities of the CSTs.
Question. Do you concur with the recommendation to the Senate Armed
Services Committee from General Peter Pace, Commander of the U.S.
Southern Command, that the illicit drugs flooding American should be
considered a weapon of mass destruction? Should counterdrug efforts be
included as a part of Homeland Security?
Answer. Illicit drugs flooding America can have the same or similar
impact as a weapon of mass destruction. To explain this, the answer can
be divided into three question-and-answer responses.
Do illegal drugs cause ``mass destruction'' on a society?--The
answer is ``they could be.'' One destructive effect is financial. The
Office of National Drug Control Policy spent over $17 billion for both
1999 and 2000 fighting the drug problem, and will spend an estimated
$18 billion for 2001. This does not include the tax dollars spent on
drug-induced crime such as murder while influenced by drugs, or drug
related health costs such as emergency room visits. Nor does this
reflect the amount of money lost in the illegal money transactions by
narco-traffickers. In addition, drug addicts often are homeless and
consume a disproportional amount of public services.
The social effect is obvious. Criminals whose offenses are drug
related (beyond just being in possession of drugs) fill many of our
jails, as crime under the influence of drugs can result in murder and
other assault crimes. Meanwhile, increased drug addiction brings an
increase in property crime. A 1998 Bureau of Justice statistics study
found that 33 percent of state and 22 percent of federal prisoners said
they committed their current offense while under the influence of
drugs, and about one in six of both state and federal inmates said they
committed their offense to get money for drugs.\1\ In addition, major
criminal organizations can produce more revenues from trafficking
illegal drugs than from most any other criminal activity, giving them
tremendous influence and power, but without bringing significant
attention to themselves. Finally, physical damage to the individual
from illegal drugs can be significant and have long-term effects. This
decreases the capability of our ``white collar'' and ``blue collar''
work force, affecting our entire future.
---------------------------------------------------------------------------
\1\ Mumola, Christopher, ``Substance Abuse and Treatment, State and
Federal Prisoners, 1997'' (NCJ-172871), Bureau of Justice Statistics, 5
January 1999.
---------------------------------------------------------------------------
Are drugs currently being used as a weapon of mass destruction
against the United States?--In the big picture, the current answer
appears to be ``no.'' Currently, ``money'' still seems to be the
motivating factor for the huge influx of drugs into the United States.
Yet, even if the drug flow is not currently intended as a weapon, its
devastating effects (``mass destruction'') are the same.
Can illegal drugs be effectively used as a weapon of mass
destruction?--The answer is ``yes.'' Illegal drugs can be used as
effectively as an ``indirect'' strategy, as military theorist and
author B. H. Liddell Hart would call it. The greatest example of this
occurred in China. Britain forced China to open itself to opium trade
throughout the late 18th to early 20th centuries. During this time
opium use resulted in a greatly weakened China, and allowed for the
West and other countries to exploit China for many of its resources,
especially silver--the currency of the opium trade. Japan employed
illegal drugs as a strategy against China during the formers occupation
of Manchuria prior to World War II. The Japanese and Chinese had been
enemies for centuries. Aware of the social destruction that drugs
cause, as well as the devastating role that opium had played in China's
history, the Japanese distributed opium, heroin and cocaine along the
Chinese coast when they took control of Manchuria in 1931, earning
Japan $300 million per year (the equivalent of 3.488 billion in 2001).
The strategy not only helped finance Japan's war machine, but the
Japanese planners thought that it would make the subsequent occupation
of China much easier because drug-consumption would reduce the combat
effectiveness of Chinese troops. It took the iron fist of Communism to
finally pull China out of its drug-ridden circumstances.
History has shown that drug trafficking, as a strategy of nation
against nation, is a proven and viable weapon. Drugs' slow, degrading
effects can damage any country. While some countries are very
susceptible to drug abuse--making them more vulnerable to a drug
trafficking strategy--other countries are well suited to trafficking
drugs. It is no surprise that the United States is definitely one of
the drug-vulnerable nations, but what many do not realize is that China
is perhaps the most capable of putting a drug trafficking strategy into
practice.

HOMELAND SECURITY MISSION

Question. What increases in National Guard Force Structure would
you recommend to meet the Homeland Security Mission?
Answer. The full answer to this question depends on what programs
are included within the mission. The National Guard presently performs
several missions which, in my judgement, should be included under
homeland security. Those missions include the counterdrug program,
aerial defense of the continental United States, domestic support to
civil authorities and the weapons of mass destruction program to name a
few.
The weapons of mass destruction program presents the most pressing
need for force structure changes. Presently, only 32 teams are
authorized. The National Guard supports the Congressional intent to
provide a WMD CST capability in each of the states and territories. To
do so would require 23 additional teams, with a total of 506 full-time
soldiers and airmen and associated equipment. Additional manpower is
also needed at the National Guard Bureau to properly perform the
recently assigned responsibilities as WMD program manager. Additional
force structure will also be required if the National Guard is assigned
responsibility for the National Missile Defense program.

COUNTERDRUG MISSION

Question. As it relates to the Counterdrug mission, what additional
resources are needed to maintain and increase the capabilities of the
National Guard-funded state counterdrug programs such as the one in
West Virginia? (The West Virginia program requires $3.5 million to
execute an effective program, yet the fiscal year 2002 National Guard
Budget for state plans funding declines to $1.34 million for fiscal
year 2002, a cut of more than fifty percent.)
Answer. Based on historical program execution, and realized and
projected DOD pay and allowance increases (8.7 percent in last two
years, similar raises projected for fiscal year 2002), the program
would need an additional $40.7 million in fiscal year 2002 to conduct
operations at current fiscal year 2000-2001 levels of effort. Resource
requirements are based on valid support requests from law enforcement
agencies for counterdrug operations, as provided by each of the 54
states and territories. This amount would maintain the program below
the 4,000 maximum personnel limit authorized by Congress. To increase
the capabilities of state counterdrug programs beyond current levels of
effort, additional resources beyond $40.7 million would be needed.

NATIONAL GUARD COUNTERDRUG PROGRAM

Question. It is my understanding from my discussions with MG Allen
Tackett, the West Virginia Adjutant General that the unique aspect of
the National Guard Counterdrug program as opposed to other DOD
involvement is that it focuses on three areas: supply reduction, a high
emphasis on demand reduction, and substance abuse programs for Guard
personnel. What is your assessment of the program?
Answer. The National Guard Counterdrug (NG CD) program is unique to
other DOD programs in the arena of counterdrug efforts. First, the
National Guard (NG) provides counterdrug support under the auspices of
Title 32 U.S.C., which puts them under authority of their state's
governor. This enables the NG to provide a wider range of services than
is possible for Title 10 (active component) forces within the
continental United States. NG personnel work for their state governor
to support state and local law enforcement agencies (LEAs), as well as
federal LEAs to interdict drug trafficking. This support can include
investigative case and analyst support, linguists, communications,
engineer, cargo inspection, logistics and transportation support,
training for LEAs, and air and surface observation of illegal drug
activities. (A 2000 survey of NG supported LEAs showed a remarkably
high satisfaction rate in all categories.) The NG also supports federal
LEAs outside the United Sates via air intelligence and reconnaissance
operations. In addition, the NG CD program is a fulltime program,
thereby permitting NG personnel to become specialized in counterdrug
interdiction--who go through special training to prepare for
counterdrug operations within the United States. Finally, most
interdiction missions provide NG personnel with military training (in
the above-mentioned skills) that enhances, or is in addition to, their
Military Occupation Specialty (MOS)/Air Force Specialty Code (AFSC)
wartime training conducted at their units during monthly drills and
Annual Training. This, in turn, provides the NG with better soldiers
and airmen. However, the active component units, who may receive some
wartime training through temporary counterdrug assignments, are usually
deterred from wartime training and preparation while conducting these
types of missions.
The NG CD Drug Demand Reduction (DDR) program is one of the
greatest assets of the NG CD program. This NG program provides fulltime
support to community based anti-drug organizations, and is a leading
edge ``force multiplier'' focusing on assisting schools, parents, and
other anti-drug coalitions. As a permanent member of every community
across America, and as a partner of the Community Anti-Drug Coalitions
of America (CADCA), the NG serves as a powerful catalyst for state and
community-based mentoring programs, parenting groups, speakers bureaus,
Adopt-A-School, Red Ribbon, and PRIDE projects. The active component
does not offer a program of this type. NG personnel become trained in
DDR skills, and go out in their own communities to work with their own
people in lowering drug demand--a vital role in the counterdrug effort.
Many NG state programs even provide camps and schools for high-risk
youth to build confidence, skills, and an anti-drug attitude within
these young people. NG substance abuse programs use the same drug
testing programs and procedures as the active components.
Question. Again from my discussions with MG Tackett, he believes
that the National Guard Counterdrug program can play a key role in the
broader scope of Homeland Security if given the opportunity and
resources and that the missions are complimentary. Do you concur with
this assessment?
Answer. The answer is ``yes.'' The National Guard Counterdrug (NG
CD) program has skills that could assist in the counterproliferation of
Weapons of Mass Destruction (WMD) such as small nuclear devices, and
chemical and biological agents. The current skills of the NG CD program
could allow it to assist in WMD interdiction efforts with minimal
additional training (such as WMD identification).
The NG CD program has a well-established relationship and a very
good track record toward assisting Law Enforcement Agencies (LEAs) in
interdicting illegal drug smuggling. NG CD skill sets used to support
LEAs in drug interdiction could also be used to assist LEAs and other
federal agencies in interdicting WMD materials at, or within American
borders. Such NG CD skills include investigative case and analyst
support, linguists, communications, engineer, cargo inspection,
logistics and transportation support, training for LEAs, and air and
surface observation. Currently, most American efforts against possible
WMD attack are ``response'' oriented.
The threat of WMD materials being smuggled into or produced within
the United States is very feasible. Prior to the millennium
celebration, an Algerian terrorist was caught smuggling explosives into
the United States at Port Angeles, Washington, with his most likely
target being the Space Needle in Seattle. Had this terrorist--who just
as well could have had WMD materials--simply solicited the help of drug
traffickers to get his explosives into the United States, the
infiltration part of the operation would most likely have been a
success. Major drug lords may not want their market damaged by
terrorists, but low-level traffickers are looking for money, and may
not be quite as concerned about their market. A high financial reward
may be all that is required to get top quality traffickers to smuggle
weapons for terrorists. The fact that drug traffickers and terrorists
can and do work side-by-side (usually for mutual financial benefits)
also indicates that the Homeland Security organizations that counter
both terrorism and illegal drug trafficking should have close working
ties.

FIRST AND EMERGENCY RESPONDER TRAINING

Question. NGB has initiated a study concerning delivering First and
Emergency Responder training to the county level across America as a
part of the NTC-HLS. When will that study be completed?
Answer. As directed by Senate Appropriation Report 106-298, pg. 34,
the Chief, National Guard Bureau conducted a feasibility study and has
prepared a response that satisfies the language in law. The Homeland
Defense Initiative Feasibility Study for Camp Gruber, Oklahoma and Camp
Dawson, West Virginia was not required to nor does it address
feasibility of delivering first and emergency responder training to the
county level. The proposal to train emergency and first responders as
embedded within the above question represents a significant departure
from traditional DOD responsibilities.
Question. Do you agree that the National Guard Bureau be provided
an Other Procurement Line Item to establish the NTC-HLS and the program
be integrated into the Future Years Defense Budget?
Answer. Provision of an Other Procurement Line Item would provide
enhanced Congressional visibility and would streamline the operation of
the program. It is equally important that Homeland Security be
integrated in the FYDP. I support these actions because they would
ensure the continuity of funding that is critical to continuing
operations. Neither action would detract from our ability to continue
to utilize other facilities for specialized training.

NATIONAL GUARD FORCE STRUCTURE AND EQUIPMENT

Question. If the new national defense strategy calls for cuts in
the National Guard force structure, how do you plan to make cuts, and
will these cuts be based on readiness levels or made across-the-board?
Answer. The Army National Guard uses a process called Total Guard
Analysis (TGA) XXI to redistribute force structure due to changes in
the National Military Strategy/Quadrennial Defense Review or resulting
from the Total Army Analysis (TAA) process.
TGA is an objective and unified National Guard Bureau (NGB) effort
to fairly allocate force structure within the States' capabilities,
while maintaining a balanced and ready force for federal and domestic
missions. TGA is the method that all the Adjutants General agree upon
to redistribute force structure.
TGA is a two-step process. Step one utilizes objective, measurable
personnel readiness data to produce an ``Order of Readiness'' list
(ORL). Step two involves analysis by NGB's TGA team. Factors used by
the team include: the ORL, the percentage of units in a given state by
type, the number of headquarters units in a state that provide command
and control for other units, the number of units that can be used for
either federal wartime or domestic support missions, and the projected
demographic changes in a state (population shifts). The outcome of Step
2 is a list of units with low readiness levels and states who are
candidates for consideration of growth or re-distribution of force
structure. The leadership of the ARNG to make decisions on any
necessary force structure cuts uses this list.
The National Security Strategy will define objectives and
capabilities that the Services will be tasked to provide. In order to
meet them, the Services will re-shape their force structure, in size,
types of weapon systems and how those weapon systems will be employed.
The Air National Guard will be affected; however we do not know what
the full impact of this change will be. As a full spectrum partner we
expect to change, just as our active component changes. There will be
new opportunities for the Air National Guard including new missions,
some of which are being explored. There could be some reductions in
force structure. The Air National Guard will work closely with our
active component to apply this transition in ways that best utilize the
capabilities of the Air National Guard while maintaining a force that
is viable, equally trained and equipped.
Question. It is my understanding that the full-time work force of
the Army National Guard is at 57 percent of required levels. Are there
proposals from the Bureau being developed to improve this percentage?
Answer. The Army has validated a full-time support manpower
requirement of 41,321 Active Guard Reserve (AGR) and 42,329 Military
Technician personnel for the Army National Guard (ARNG). Based on Army
personnel readiness metrics and mobilization deployment scenarios,
there is a minimum acceptable level of manning necessary to maintain
required levels of readiness. For the ARNG this minimal level of
support equates to 30,402 AGR and 29,329 Military Technician personnel,
or approximately 71 percent of the full-time support requirement.
The Army plans to seek increases in Reserve Component full-time
support, incrementally, to attain the 71 percent fill by fiscal year
2012. However, due to resource constraints within the Army, the plan
for increases is not funded within Army appropriations. The Army
National Guard seeks appropriations and authorizations for increases of
724 AGR and 487 Military Technician personnel per year beginning in
fiscal year 2002 and culminating in fiscal year 2012.
Question. What is the status of upgrading and updating aviation
assets in states such as West Virginia which only has one UH1H lift
helicopter available to fly? Also, will the aviation force structure in
West Virginia and other states be large enough to meet mission
requirements and also be large enough to prevent a reduction in force
of the full-time aviation personnel and closing of facilities?
Answer. The Army National Guard (ARNG) is working diligently with
the Army Deputy Chief of Staff for Operations and Plans (DCSOPS) and
Army leadership to formulate a realistic plan that will allow for
timely replacement of our aging UH-1 aircraft. Presently the ARNG is
receiving the necessary parts to fix a small number of UH-1 helicopters
per month in order to continue operating until the UH-1 fleet can be
replaced.
As pertains to the aviation force structure and support facilities
and personnel in West Virginia and other States, the impact cannot be
assessed until the revised 2001 Army Aviation Modernization Plan (AAMP)
is approved by the Chief of Staff Army (CSA) and released to the ARNG.
However, it appears a certainty that overall the Army and ARNG aviation
force structure will be smaller as the Vietnam-era AH-1 and UH-1 fleets
are replaced with the modernized, more capable AH-64 and UH-60
aircraft, on a less than one-for-one basis.
______

Questions Submitted to Major General Roger C. Schultz

Questions Submitted by Senator Ted Stevens

ARMY GUARD FLYING HOUR PROGRAM

Question. I understand that the Army Guard flying hour program is
significantly underfunded. There is also concern that your pilots are
not being given enough hours to fly basic minimums. What are your
challenges in this area? What will be the impact of both short and long
term readiness of the Army National Guard?
Answer. In fiscal year 2001, the Army National Guard (ARNG)
identified a significant shortfall in its flying hour program (FHP).
This was caused by a small shortage in the number of hours allocated,
combined with the key fact that the actual cost of flying a modernized
series ARNG aircraft (UH-60 Blackhawk, AH-64 Apache, CH-47 Chinook)
significantly exceeds the hourly funding allocated by the Army, and
does not match the funding per hour provided to other Army commands
flying the same aircraft in the same geographic areas.
Based on mission priorities, some ARNG units were not provided the
FHP necessary to maintain full proficiency in all individual and unit
tasks. There is a measurable impact of the overall readiness of these
ARNG aviation units, and this impact is being appropriately reflected
in the Army's unit readiness reporting system.

MILCON FUNDING

Question. Please comment on how long, at the current rate of MILCON
funding, it will take to replace the plant value of your assets and
your current backlog and annual requirement in real property
maintenance?
Answer. Using the current budget, it would take approximately 300
years to modernize/replace the Army National Guard's (ARNG) assets. The
current backlog for real property maintenance is nearly $7 billion.
According to The Army's Installation Status Report, ARNG requires $439
million per year just to sustain its existing real property at its
current inadequate condition, and prevent further deterioration.

ARMY GUARD AVIATION ASSETS

Question. Describe the Army's plan to modernize the Army Guard
Aviation assets--both in short and long terms?
Answer. While the full details of the revised 2001 Army Aviation
Modernization Plan (AAMP) are not yet approved by the Chief of Staff of
the Army (CSA) and released to the ARNG, it is certain that there will
be a significant short and long term impact.
In the short term, the repeated groundings of the Army National
Guard (ARNG) Vietnam-era AH-1 Cobra and UH-1 Huey aircraft, combined
with full retirement of both fleets (AH-1 in fiscal year 2001 and UH-1
in fiscal year 2004), severely limits both unit and individual aviator
readiness. In the long term the Army's current procurement and cascade
(active to ARNG) rates of modernized aircraft is not adequate to make
up the differential. The current Army buy of the critical UH-60 utility
helicopters is 10 per year, at which rate will take well over 20 years
to bring ARNG aviation units back to acceptable level of fill.

TOUR LENGTH TO THE BALKANS

Question. We were in Kosovo this past February and I was reminded
again of the great contributions made by the guard in support of our
national military strategy. I understand that the Army Guard forces
mobilized for duty in the Balkans typically serve deployed tours of 179
days. Combined with other required training, the combined length is
typically 220-250 days for National Guard soldiers. I believe this puts
a tremendous strain on the units and the individuals who support these
missions. Has the Army Guard and the Army considered shortening tour
lengths to the Balkans?
Answer. The Army National Guard has been following the Chief of
Staff, Army rotational policy guidance of 179 days in theater for
Balkan operations. The Army along with the Army National Guard has
discussed shorter rotations such as 120 days or 90 days for the
Balkans. The Army National Guard currently deploys units on shorter
rotations to South West Asia and has reduced rotational lengths for
medical personnel, lawyers and aviation assets. Discussion continues
between both staffs on the feasibility for shorter Balkan rotations and
the potential impacts on units, families, employers, communities and
funding such as added transportation requirements for personnel and
equipment and training site usage. As the Guard takes on more of a role
in the Balkans, it will continue to work towards better rotational
solutions that will reduce PERSTEMPO and OPTEMPO for all components of
the Army.
______

Questions Submitted by Senator Patrick J. Leahy

ARMY NATIONAL GUARD REQUIREMENTS

Question. General Schultz, does the Army National Guard have a
requirement for the M109A6 Paladin Self-Propelled Howitzer system? How
many additional battalions are required to satisfy the current Army
National Guard requirement? To what degree are these missioned in the
Commanders-in-Chief (CINC) theater war plans?
Answer. 13 battalion sets are required to completely modernize Army
National Guard divisional artillery requirements. Eight of the 13
battalions are missioned against Commander in Chief (CINC) war fighting
requirements at echelons above division.

M109A6 PROCUREMENT

Question. Is M109A6 procurement included in the Army fiscal year
2002 Budget? Realizing that their are funds available as a result of
Foreign Military Sales of Paladin, could such funds be used for the
procurement of M109A6 Self-Propelled Howitzers for the Army National
Guard (ARNG)?
Answer. The Army fiscal year 2002 Budget does not address the
procurement of additional M109A6 (Paladins). The Army National Guard
has 13 Divisional Field Artillery Battalions, which are M109A5
equipped. Eight of these Battalions are also missioned against
Commander in Chief (CINC) CORPS war fighting requirements. Although
nothing is currently programmed, the ARNG anticipates receiving up to
four additional Cascaded M109A6 Battalion sets in fiscal year 2002. As
we continue to modernize the ARNG Divisions with M1A1 Abrams Tanks and
Bradley Fighting Vehicles, it is essential the Divisional Field
Artillery Battalions (particularly those missioned against CINC CORPS
war fighting requirements) be modernized. Without Paladin Howitzers,
these units will lack the essential responsiveness, survivability, and
interoperability in the Advanced Field Artillery Tactical Data System
digitized operational environment.
Question. Do you have additional information that you care to
provide the Committee on this subject (M109A6 Paladin)?
Answer. There is an Army National Guard fiscal year 2003-07 POM
Initiative to buy three battalion sets of Paladin for $102 million. The
three additional battalion sets would go to California (40th Infantry
Division (M)), Pennsylvania (28th Infantry Division (M)) and Texas
(49th Armored Division).
______

Questions Submitted to Major General Paul A. Weaver, Jr.

Questions Submitted by Senator Ted Stevens

FUNDING SHORTFALLS

Question. I understand that the Air Guard faces significant funding
shortfalls this year. Can you describe these shortfalls and the impact
on the Air Guard of not receiving supplemental funds? What will be the
impact on both short and long term readiness of the Army National
Guard?
Answer. Funding shortfalls included in the fiscal year 2001
supplemental (as of 1 Jun 2001) are flying hours ($93.0 million),
utility costs ($16.3 million), and depot maintenance surcharges ($10.0
million). If not fully funded, the ``must pay'' aspect of utility
bills, working capital fund losses, and civilian compensation unfunded
mandates require sourcing from other O&M programs. Flying hours,
already under funded, and depot maintenance are the only viable funding
options. Some combination of curtailed flying activity and reduced
over-haul/repair of ANG aircraft will result. Thus readiness is
vulnerable on two fronts: less training available for aircrews and
potentially fewer aircraft available for sortie generation.

AEF ROTATIONS

Question. Describe how the transition to the AEF is going for the
Air Guard? What are your major challenges in supporting the active Air
Force in these rotations?
Answer. The Aerospace Expeditionary Force (AEF) transition has
presented some real challenges for us and the Air Force, however, we
are ovecoming them and becoming more adept within the AEF concept. We
put 24,184 personnel into the AEF in Cycle One which included 8,411
Expeditionary Combat Support (ECS) personnel. This was a substantial
effort and equaled approximately 19 percent aviation and 8 percent ECS
of all the requirements of the three Commanders in Chief (CINCs).
Our major challenges in the future are securing qualified personnel
via volunteerism. As the AEF progresses, the ability to get volunteers
will dwindle to the point where we may have problems filling the slots
which we have committed. This is our biggest challenge and fear.
Initially, we felt the Air Force was uncertain about working side-by-
side with us. The challenge was in their acceptance of us and our two-
week rotations. Although there are still pockets of skepticism, the
overall attitude seems to be changing. This is in large part to our
Guard members performing at exceptional levels that allows the Air
Force to see we are a well-trained, professional military organization.
Another challenge that we have taken on, is the ability to get
names of deployers to the theaters in a timely manner. This is a huge
problem for a volunteer organization. We are required to have names to
the CINCs personnel operation 60 days prior to the Date-Required-In-
place, and although this is a formidable task that we sometimes have
trouble accomplishing, we are continuing to work this problem and are
confident that soon it will no longer present such a challenge.
Question. Based on your operational requirements and lessons
learned from AEF rotations, do you have the full-time force that you
need?
Answer. The Air National Guard (ANG) recently accomplished a
complete review of both our full-time and traditional guard manpower
requirements needed to support the AEF now and well into the future.
The results of this effort validated a requirement of 2,048 additional
full time manpower resources. Historically the ANG has been resourced
as a respond (Cold War) force with limited full time manpower to
operate and maintain facilities, repair aircraft/equipment, and train
the drilling force. Now with a formalized AEF construct and increasing
support requirements, the ANG must begin to be resourced properly for
both drill training and increased Operation Tempo (Optempo). Thus far
we have funded 1,151 of our requirement through internal ANG offsets
and through funding and support received from the Air Force during the
POM process, leaving an unfunded requirement of 897 full-time
positions. Increased Optempo and aging aircraft and weapon systems are
driving increased maintenance workloads to ensure aircraft and systems
are available for training and deployment. Our review also identified
shortfalls in infrastructure and communications, additional air traffic
control and combat communications operators, additional full time
aircrew and crew compliment adjustments in the airlift and air
refueling mission areas. We are continuing our efforts to obtain the
balance of the funding and end strength required.

REAL PROPERTY MAINTENANCE

Question. How long, at the current rate of Milcon funding, it will
take to replace the plant value of your assets and your current backlog
and annual requirement in real property maintenance?
Answer. Recapitalization Rate.--The current rate of total MILCON
funding in the Air Force budget is roughly $57 million per year
(including planning and design and unspecified minor construction). The
recapitalization rate is roughly 260 years based on the average
calculated plan replacement value of $14.9 billion from fiscal year
2002 to fiscal year 2007.
Real Property Maintenance (RPM).--The current RPM backlog is $1.1
billion and growing. The annual funding for RPM is based on the Air
Force model of 1 percent of plant replacement value (PRV). This funding
is then reduced by $21 million for what Air Force calls the ``state
subsidy''. More accurately the reduction accounts for RPM type work
that is accomplished under the ANG's facilities operations and
maintenance account (FOMA) which is paid for with real property
services (RPS) funds. Given our $12.6 billion PRV that means roughly
$100 million per year is given to the ANG for RPM work. Of this amount
$70 million goes directly to the bases, and the balance is distributed
for conversions, design, and overhead. This is far short of the
requirement across all our installations. It is reasonable to expect
execution of $150-$200 million per year, which creates an annual
shortfall of $50-$100 million.
Projects of highest priority for RPM funding include $230 million
in airfield pavement repairs for cracked and spalling airfield
pavements, $115 million for primary mission operational facilities to
repair leaking roofs and allows functional use of buildings, $465
million for mission support, aircraft maintenance, security forces, and
crash fire rescue facilities to repair failed fire suppression systems,
failed heating and ventilating systems and other quality of life
issues, and $220 million for base support such as supply storage,
vehicle maintenance, administrative, and utility distribution systems.

GUARD AND RESERVE EQUIPMENT

Question. Please comment on the importance of the additional funds
provided by the Congress for procurement of guard and reserve equipment
each year?
Answer. The National Guard and Reserve Equipment Appropriation
(NGREA) account has been instrumental in our efforts to modernize ANG
aircraft and keep us fully relevant to today's Total Force Military.
Using NGREA, we have focused on four key areas: precision strike, 24-
hour operations, information dominance, and enhanced threat
survivability. Using NGREA and existing Air Force funding we designed
an F-16 modification program called CUPID that dramatically increased
the combat capability of the entire CAF F-16 Block 25/30 fleet and
saved over $100 million in the process. CUPID coupled with another GREA
success program, the Lightening II targeting pod, has allowed our F-16
units to perform the full spectrum of combat operations. The Situation
Awareness Data Link (SADL) is another example of NGREA successes. We
were also able to field Fighter Data Link (FDL) on the ANG F-15 fleet
using NGREA funding. FDL is the true F-15 force multiplier and, we are
able to maintain full combat capability in the ANG F-15 fleet. In the
area of 24 hour operations, the ANG has led the way in fielding Night
Vision Imaging Systems (NVIS) across the CAF A-10, F-15 and F-16 fleet.
These NVIS systems are now the Air Force standard yet were initially
fielded using NGREA funding. We have made great strides in modernizing
our 40+ year old KC-135E tankers through the ongoing KC-135E to ``R''
reengining program. We have also begun to field C-130 Cockpit Armor to
allow our C-130 units full protection during in-theater rotations. The
flexibility NGREA funding gives us has allowed the ANG to field
commercial-off-the-shelf solutions faster and cheaper than otherwise
able. These combat enhancements have been invaluable in our efforts to
modernize our fleet and support global taskings. I appreciate your
continued support for NGREA and offer the heartfelt thanks of our
106,000 ANG citizen soldiers in this regard.

PERSTEMPO

Question. I understand the Air Guard has shifted to a 90-day
rotation policy to reduce PERSTEMPO. How is this working?
Answer. By definition, Aerospace Expeditionary Force (AEF)
rotations are 90 days, however, this may be a misunderstanding of
terms. The Air National Guard (ANG), like the Active Duty, assumes a 90
day AEF commitment for a given AEF pair. The Air National Guard fills
this commitment through a process we call ``Rainbowing'' where we
utilize two units or more to cover this 90 day period. In most cases we
have three units each filling 30 days of this 90-day period with one of
the three designated as the lead unit for planning purposes. The units
then fill their 30-day period with ANG ``volunteers''. Our commitment
to the Air Force is 15 days in country as a minimum. This is spelled
out in Air Force Instruction (AFI) 10-400 and also in Air National
Guard Instruction (ANGI) 10-400. As a rule, approximately 20 percent of
our personnel have historically volunteered for tours in excess of 15
days in country; however, ANG policy only requires the 15 days. Our
goal is for each member of the ANG Expeditionary Combat Support
community to rotate overseas in support of AEF commitments once every
30 months (every other AEF cycle). This of course is more difficult to
accomplish within our aviation packages and in some of our critical
skills AFSC's. It is important to note that the ANG entered into the
Expeditionary Aerospace Force (EAF) concept for the long haul. We have
carefully balanced historical OPTEMPO/PERSTEMPO deployment rates with
our AEF expectations and have committed to what we believe we can
``sustain'' without negatively impacting retention and the health of
our units.
______

Question Submitted by Senator Patrick J. Leahy

KC-135

Question. General Weaver, the KC-135 Tanker has served the country
well over its 35 years of service, but I fear that we are not managing
the Guard's inventory very well. Increasing operations and maintenance
funds are being eaten up by the old ``E'' version, which nine Guard Air
Refueling Wings are still flying. The E has significantly shorter range
than the re-engined ``R'' model, which contributes more to our aerial
refueling needs.
From what I understand, converting the Guard's 93 KC-135Es will
save up to $7 billion over the life of the program, more than covering
the $2 billion to complete the conversion. Can you tell me what the
impact will be of failing to carry out the E to R conversion program?
Answer. The E-R conversion program is essential to the viability of
the KC-135 fleet. In addition to the overall savings in maintenance and
sustainment costs there are many more benefits that will be realized by
converting to ``R'' model engines.
The CFM-56 engine on the KC-135 R, meets or exceeds STAGE III noise
and emission standards, provides fleet commonality and allows
interoperability between Air Force, Air Force Reserve Command and Air
National Guard Stage III noise and emission standards went into effect
at the beginning of this year. Technically government aircraft are
exempt from these standards, however there is still precedence for
restricted access to some foreign locations or increased landing fees
for failure to comply. There is also the ``good neighbor aspect''.
Since most of our KC-135 E model units are located at civilian
airfields pressure to comply with the standards is increased because we
are being constantly compared to civilian traffic. An E model streaming
black exhaust and rattling windows is not the most effective way to
advertise your presence in the neighborhood.
KC-135s are an indispensable part of any United States overseas
operation. As seen in the recent past more and more tankers are
required to keep our bombers, fighters and mobility aircraft refueled
and flying. A common fleet would cut the logistics tail in half and
reduce forward basing limitations because of differing requirements
between E's and R's.
Completing the re-engining of the fleet would also allow total
interoperability. Any KC-135 crew could fly any KC-135. This would
increase overall utilization rates for the aircraft and decrease the
need to pick and choose between units on when and where they will
deploy.
When an E model is converted to an R model there are many other
upgrades included in the modification line. These improvements include,
just to name a few, a new auxiliary power unit, new main landing gear,
reinforced wing structure, and more. All these improvements make the
aircraft safer; more cost efficient and more reliable.
Following are some of the effects of not upgrading the KC-135.
Higher Engine Depot Maintenance/Overhaul Costs for the KC-135E will
continue. ANG fiscal year 2000 TF33-P102, KC-135E engine overhaul costs
were $588,000 per engine times 70 engines versus $183,000 per engine
times 6 engines for the CFM-56, KC-135R engines. Projected ANG fiscal
year 2001 TF33-P102, KC-135E engine overhaul costs are $1.039 million
per engine times 45 engines versus $399,000 per engine times 10 engines
for the CFM-56, KC-135R engines.
Decreased KC-135E aircraft availability as the KC-135E engines have
a 10 year unscheduled removal rate that is, on average, ten times that
of the KC-135R engines. Missed cost avoidance opportunity of $137-$276
million for the replacement of corroded KC-135E engine struts if all
KC-135E's are not modified to KC-135R's. E to R model conversion
includes replacement of engine struts.
E models will continue to accrue additional depot costs to repair
corroded engine struts. ANG/LGMA cannot validate the purported $7
billion life cycle savings from a logistic perspective. 1996 OC-ALC
study states zero life cycle savings to 2040. 1999 Boeing study states
over $10 billion life cycle savings to 2040.
______

Question Submitted by Senator Richard J. Durbin

C-130

Question. I am very concerned about delays in replacing the aging
C-130Es at the 182d Airlift Wing in Peoria. The unit had been scheduled
to get ``H'' models when another unit upgraded to C-17s. While I would
welcome the 182d receiving the newer J models, the E models are so old
they are unlikely to last until the J models are delivered in 2016 or
later. Why has that plan changed? What do you propose to do to
modernize the C-130 fleet in Peoria to be sure the unit can keep
flying?
Answer. The ANG always seeks to acquire and maintain the most
capable and effective aircraft fleet possible. This desire is
unfortunately sometimes constrained by fiscal and operational realities
imposed upon us from external sources.
While there is no funded ANG program to replace the C-130E
aircraft, we have developed plans to incorporate a variety of possible
modernization initiatives into the ANG airlift fleet. The 182 AW at
Peoria will benefit from the ensuing redistribution following any
airlift modernization initiatives, as they are next in line in the ANG
C-130E Modernization Plan, signed by NGB/CF on 22 January 1998.
The most near-term USAF modernization program is the C-130 Avionics
Modernization Program, which is pending a source selection decision.
This will upgrade the avionics and supporting infrastructure of the C-
130E and C-130H aircraft into a modern, common configuration. This
modification will provide for full Global Air Traffic Management (GATM)
compliance, allowing global airspace access.
The United States Air Force (USAF) C-130J roadmap reflects the ANG
decision to move 8 C-130H aircraft to the 152 Air Wing (AW) Nevada Air
National Guard (NVANG) in order to provide additional operational
capability for that unit in their Senior Scout mission. The 182 Air
Wing (AW) Illinois Air National Guard (ILANG) replaced Reno in the USAF
C-130J beddown roadmap, where they are projected to receive 8 C-130J
aircraft in 2016. This has since changed to reflect the wishes of the
Adjutant General (TAG) ILANG. The 182AW will receive C-130H model
aircraft when the 144 Airlift Squadron, Alaska (AK) ANG receives C-17s.

SUBCOMMITTEE RECESS

Senator Inouye. The subcommittee will stand in recess until
Wednesday, May 23.
Thank you very much.
[Whereupon, at 12:13 p.m., Wednesday, May 9, the
subcommittee was recessed, to reconvene at 9:30 a.m.,
Wednesday, May 23.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, MAY 23, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:39 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
Present: Senators Stevens and Inouye.

NONDEPARTMENTAL WITNESSES

STATEMENT OF MARY J.C. HENDRIX, Ph.D., PRESIDENT,
FEDERATION OF AMERICAN SOCIETIES FOR
EXPERIMENTAL BIOLOGY

OPENING STATEMENT OF Senator TED STEVENS

Senator Stevens. Good morning. I apologize for being late.
There are all sorts of strange things happening around this
place this morning, and I know we have 34 witnesses today that
want to submit their statements and make comments for the
record. We are going to do our best to hear you. I would hope
that you would understand our problem.
Senator Inouye and I are going to have to go vote some time
in the next 15 minutes and after that we will probably be on a
10-minute cycle. So what I would like to do is break that cycle
when we get to the floor, but I do not know how successful we
will be.
I would like to tell you that we are going to hear as many
of you this morning before we go vote as we can. All the other
statements will be filed in the record as though read if we do
not get back. But you are welcome to wait as long as your
patience will allow you to do so. But we do not control the
situation on the floor and that is the best thing we can do.
I do appreciate your courtesy of being here. We want to
hear from you, and as a matter of fact this may be the last
hearing I will chair, as I turn it over to my friend. As far as
defense is concerned, it would make no difference. We are
absolutely in agreement, I believe, on all matters concerning
defense. So I am very comfortable with telling you I will
happily listen to Senator Inouye as long as necessary.
Senator Inouye. We just rotate chairs.
Senator Stevens. Ms. Hendrix, will you please proceed. The
shorter you will be, the more people we will hear. Thank you
very much.
Dr. Hendrix. Good morning, Mr. Chairman and distinguished
members of the subcommittee. I thank you for the opportunity to
testify today as President of the Federation of American
Societies of Experimental Biology (FASEB). FASEB is comprised
of 21 societies with more than 60,000 scientist members and is
the largest coalition of biomedical research associations in
the United States. Our mission is to enhance the ability of
biomedical and life scientists to improve through their
research the health, wellbeing, and productivity of all people.
I am also especially honored to address the Defense
Subcommittee today as the daughter of a career naval officer
Captain Charles N.G. Hendrix.
It is not commonly appreciated that more than one-half of
the Department of Defense's (DOD's) 6.1 research budget is
awarded to university researchers. In addition to research-
supported academic institutions, the DOD also supports graduate
students working for their doctorates and also training for
research careers. The DOD therefore plays a leading role in
engaging and encouraging future researchers on whom both our
future military and economic security will depend.
Let me offer just one stellar example of DOD research. The
Virtual Naval Hospital, a digital health sciences program to
deliver expert medical information to health providers,
patients, and their families at remote sites of deployment,
represents one of the best examples we know of an academic-
military partnership that involves the University of Iowa and
the United States Navy Bureau of Medicine and Surgery. I serve
as the Administrative Co-Director of the Virtual Naval Hospital
and have the privilege of working with physicians at the
University of Iowa and Captain Richard Baccalar, who is
Director of Navy Telemedicine at Bethesda Naval Hospital.
The Virtual Naval Hospital provides health promotion
information and military clinical handbooks and manuals for
providers, which previously consumed a lot of space on board
ship, and now all that information is contained on convenient
computer disks. In addition, the Virtual Naval Hospital offers
the opportunity for personnel to enroll in educational courses
on line that accrue credits toward their college degrees. The
slogan ``Go to Sea and Get a Degree'' was recently carried by
the press in a recent article about the benefits of the Virtual
Naval Hospital and shows how taxpayer dollars and time can be
saved and maximized to everybody's benefit.
Mr. Chairman, in inflation-adjusted dollars DOD's budget
for basic research in the life sciences declined by 25 percent
in the years from 1993 to 1998. This steady erosion in
commitment has come at a time when the scientific potential to
dramatically improve our military readiness is more promising
than ever. As the pace of technology quickens, it is clear that
new funding and research opportunities for DOD basic research
programs are at a critical need if the United States military
is to maintain its current technological superiority.
Therefore, FASEB recommends a $50 million increase to the
DOD basic research 6.1 budget for life sciences for fiscal year
2002. FASEB strongly supports the extramural programs in life
sciences that are managed by the congressional-directed medical
research program. This program has maintained the highest
standards of merit review and has benefited both military and
non-military individuals.
Lastly, FASEB also recommends that DOD be encouraged to
extend its existing interagency collaborations with academic
institutions, with industry and other government agencies to
achieve multi-interdisciplinary efforts with broadly based
information networks.
Mr. Chairman, that concludes my testimony and I thank you
for this opportunity.
Senator Stevens. Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF MARY J.C. HENDRIX, PH.D.

Mr. Chairman and distinguished Members of the Subcommittee, I am
Mary J.C. Hendrix, Ph.D., President of the Federation of American
Societies for Experimental Biology (FASEB) and the Kate Daum Research
Professor and Head of the Department of Anatomy and Cell Biology and
Associate Director of Basic Research and Deputy Director of the Holden
Comprehensive Cancer Center at The University of Iowa in Iowa City,
Iowa.
Thank you for the opportunity to testify before you on behalf of
FASEB, which is comprised of 21 societies with more than 60,000
scientist-members and is the largest coalition of biomedical research
associations in the United States. FASEB's mission is to enhance the
ability of biomedical and life scientists to improve, through their
research, the health, well-being and productivity of all people. FASEB
serves the broader public, by serving as the voice of biomedical
scientists nationwide.

FASEB'S COMMITMENT TO DOD RESEARCH MISSION

In the balance of my testimony this morning, I will be offering
recommendations developed during FASEB's Annual Consensus Conference in
December of 2000. Representatives of our 21 member societies gathered
to review the research portfolios of all federal agencies that support
biomedical research. As FASEB President, I made sure that my scientist
colleagues paid special attention to DOD's portfolio, because it
supports cutting edge research that can benefit our society as a whole,
as well as support its national security mission.

DOD'S BASIC RESEARCH MISSION

The Department of Defense (DOD) supports a major basic research
program in the Life Sciences that has produced significant benefits for
the nation. The productivity of this program is threatened, however, by
a decline in funding. FASEB urges a reversal of this trend in the
interests of the nation's health, economy, and military readiness.

TABLE 3.--DOD LIFE SCIENCES
------------------------------------------------------------------------
BEHAVIORAL,
BIOLOGICAL SCIENCES MEDICAL RESEARCH COGNITIVE AND
NEURAL SCIENCES
------------------------------------------------------------------------
Molecular & Cellular Infectious Personnel,
Systems & Organisms Diseases Of Training And
Biomimetics Military Leadership
Biorobotics Importance Human-System
Biosensors Combat Casualty Integration/
Marine Mammals Care Human Factors
Environmental Biology Military Pattern
Non-medical Chemical and Biological Operational Recognition
Defense Medicine
Medical Chemical/
Biological (CB)
Defense
------------------------------------------------------------------------

Table 3, DOD basic research in the Life Sciences falls into three
major categories: biological sciences, medical research and behavioral
and cognitive neural sciences.
DOD basic research in the life sciences addresses all of the major
levels of biological organization: molecular, cellular, tissue, organ,
organ system, integrated organism, and cognitive science (Table 3). On
average, about 13 percent of the agency's basic research budget (6.1)--
which in fiscal year 1999 was $1,107.9 million--is invested in the
Biological and Medical Sciences; six percent in the Cognitive and
Neural Sciences \1\ (Figure 6). In addition, the DOD manages the
Congressional Special Interest Medical Research Programs, which focus
on, among other areas, programs on cooperative DOD/Veterans
Administration (VA) medical research, defense health research, defense
women's health research, and osteoporosis research.
---------------------------------------------------------------------------
\1\ http://www.acq.osd.mil/ddre/research/.

Figure 6. This chart represents a DOD estimate of the 6.1 investment in
the Life Sciences ($206.3 million). The agency's investment in the
Congressional Special Interest Medical Research Programs, which
includes the Congressionally Directed Medical Research Programs, is not
reflected in these numbers. Source: Office of Basic Research, ODUSD
(S&T), DOD.

Most of the extramural basic research is executed through the Army
Research Office (ARO), the Office of Naval Research (ONR), the Air
Force Office of Scientific Research (AFOSR), the Defense Advanced
Research Projects Agency (DARPA), and the Army Medical Research and
Materiel Command. Coordination and cooperation among offices is managed
through several committees (called Project Reliance) established to
minimize unnecessary duplication. Additionally, the DOD collaborates
with National Institutes of Health (NIH), the VA, and the National
Oceanographic and Atmospheric Administration to leverage its funding
and avoid duplication. More than one-half of the DOD's 6.1 budget is
awarded to universities.\2\ Significant portions of these funds support
graduate students working for their doctorates and/or training for
research careers. Thus, DOD is actively engaging and encouraging future
researchers on whom both the future military and economic security of
the United States will depend.
---------------------------------------------------------------------------
\2\ Basic Research Plan, Third Edition. Office of the Deputy Under
Secretary of Defense (Science & Technology/Plans and Programs), pg. II-
4.
---------------------------------------------------------------------------
RECENT ACCOMPLISHMENTS

Today, military personnel are protected from epidemic hepatitis as
a result of knowledge gained from basic research on the biology and
immunology of the hepatitis-A virus. In addition, basic research into
the physiology of body temperature control has produced procedures that
are used at Army Ranger training sites to protect trainees from
hypothermia, and which have been adapted for civilian use. The Virtual
Naval Hospital (VNH), a digital health sciences program designed to
deliver expert medical information to health providers and patients at
remote sites of deployment, represents a fruitful academic-USN
partnership and provides a template to provide telemedicine services to
civilians and to meet some of the specialized needs of veterans. These
are just a few examples of the breadth of DOD contributions to
biomedical research. Detailed below are a few specific accomplishments
of both military and civilian benefits of life science research.

Medical Research
DOD-funded scientists established an in vitro cultivation system
for malaria parasites, which contributed significantly to the malaria
genome sequencing, and is thus important in the development of future
vaccines.
DOD-funded scientists determined that brain regions mediating the
highest order mental capabilities are most susceptible to sleep
deprivation and are also the most easily restored by subsequent sleep.
These findings will have innumerable consequences for military
deployments as well as for other occupations in which sleep deprivation
is an issue, such as airline pilots and physicians.
DOD-funded scientists determined how red blood cells and platelets
could be stored long-term for later transfusion into humans, while
maintaining Food and Drug Administration standards for safety and
efficacy.
DOD-funded scientists characterized three protein components of two
anthrax toxins in order to better understand virulence patterns and to
facilitate vaccine development.

Behavioral, Cognitive and Neural Sciences
DOD supported research leading to the development of an implantable
``eye chip'' able to replace damaged retinas to restore lost vision.
Congressional Special Interest (CSI) Medical Research Programs
DOD played a significant collaborative role in the development of
both antibody-mediated and vaccine therapies directed against a novel
breast cancer protein (HER-2).

SCIENTIFIC OPPORTUNITIES

The demonstrated and potential future impact of DOD's basic
research program is tremendous. The research programs are competitive,
productive, and vital to our nation. Advances in immunology,
toxicology, physiology, neuroscience, biochemistry, psychology, and
molecular biology, all of which are directed toward the understanding
of disease and injury processes that will transcend the active military
applications bringing benefits to both veterans and the broader
civilian community. The knowledge will be used to enable applied
research for the development of novel drugs, vaccines, medical devices,
health promotion and prevention procedures, medical diagnostics, and
treatments for trauma and disease.
The following research themes in the biological sciences are
examples of how additional resources might be used. Such an investment
will also lead to the expansion of partnerships between the military,
academe and the private sector.

Basic Research in the Life Sciences
Biological Sciences.--Research on olfactory sensing offers novel
biologically inspired approaches for the design and eventual production
of engineered systems capable of detecting trace amounts of explosives
and toxic chemicals. In addition, this research will provide the
military with unique advanced capabilities for sensing contamination of
food, clothing, material, and the environment. Basic research on
antibodies, characterization of cell surface receptors, and cell-based
sensing has enabled the development of biochemical detector technology
and provided the U.S. military with its first automated capability for
detecting biological substances. These discoveries will concomitantly
benefit society as a whole.
DOD Cognitive and Neural Sciences.--Two important areas of
opportunity for collaborative potential with academic and industrial
partners are Behavioral Science and Neural Science. Behavioral science
research seeks to use the understanding of human performance to improve
personnel selection, assignment, and training, to augment personnel
performance in military environments, and to organize more effective
teamwork in command and control organizations. Neural science studies
explore reverse engineering of biological neural systems, for example
studies of dolphin and bat active sonar processing, for target
detection, tracking, and classification.

Congressional Special Interest (CSI) Medical Research Program
The CSI's Congressionally Directed Medical Research Program (CDMRP)
is an unprecedented partnership among the military, scientists,
physicians, and the patient-advocacy community, bringing together
multi-disciplinary efforts to focus on the control and ultimate
eradication of specific diseases, such as breast cancer, prostate
cancer, neurofibromatosis, and ovarian cancer. This highly effective
program continues to offer opportunities pursuing novel directions in
medical research and for attracting and training new investigators in
these fields.

Partnerships
Unique funding and partnership opportunities exist from DOD
sources, which include the Young Investigators Programs, the Small
Business Innovation Research Program, the Faculty Sabbatical Leave
Program, the Infrastructure Support Program for Minority Institutions,
the High School Science Awards Programs, and the Clinical Translational
Research Programs. Other noteworthy partnerships include the University
Research Initiative (URI), a merit-reviewed program that is vital to
the academic-DOD partnership. It is important to maintain funding for
this program, which includes the Multidisciplinary University Research
Initiative (MURI), which supports research groups from different
disciplines working for a common objective; the Defense University
Research Instrumentation Program (DURIP), which supports badly needed
instrumentation for scientific and engineering research; the National
Defense Science and Engineering Graduate Fellowships, which allow
outstanding students to pursue graduate research in areas of strong
interest to DOD; and, the Defense Experimental Program to Stimulate
Competitive Research (DEPSCoR), which funds research in states that are
under-represented in federal research support.

FUNDING RECOMMENDATIONS

FASEB recommends a $50 million increase to the DOD Basic Research
(6.1) budget for the Life Sciences for fiscal year 2002. This increase
should be for the designated purpose of providing an increase to the
Army, Navy and Air Force Defense Research Science Programs (program
elements #0601102A, 0601153N and 0601102F), the University Research
Initiatives, and the Chemical and Biological Defense Program.
DOD's budget for basic research in the life sciences has declined
by 25 percent from 1993 to 1998 (in inflation-adjusted dollars).\3\
These cutbacks have compromised basic biomedical research at a time
when the potential to have a larger impact on military readiness is
greater than it has ever been. As the pace of technology quickens, it
has become obvious that new funding and research opportunities for the
DOD Basic Research Program are critical if the U.S. military is to
maintain its technological superiority. Therefore, it is imperative
that the level of support for this area be substantially increased to
realize this potential.
---------------------------------------------------------------------------
\3\ Ibid, pg. I-1.
---------------------------------------------------------------------------
FASEB strongly supports the extramural programs in life sciences
research managed by the Congressionally Directed Medical Research
Program (CDMRP). The CDMRP has maintained the highest standards of
merit review, and represents an excellent example of a unique
partnership among the military, scientists, physicians, and patients.
The benefits from this collaborative, integrative approach to address
various aspects of medical research are innumerable--to both military
and non-military individuals.
FASEB recommends that DOD be encouraged to extend its existing
interagency collaborations.
We highly encourage collaborative extramural partnerships with
academic institutions, industry, and other government agencies to
achieve multi-disciplinary efforts with broadly based information
networks. There are great opportunities to be gained by encouraging
additional multi-agency collaborative interactions to meet national
goals and maximize the DOD investment portfolio. In this manner, the
fundamental research needs of each branch of DOD engaged in basic and
applied research can be more effectively attained.
DOD Biological and Biomedical Research is not duplicative of
funding provided by other agencies. Nonetheless, there are synergistic
existing partnerships with the National Science Foundation (NSF) and
other federal departments and agencies, and with interagency groups
such as those under the National Science and Technology Council. In
addition, opportunities exist for collaborations with NIH institutes,
as evidenced by the recent solicitation for research applications on
likely bioterrorism pathogens by the National Institute of Allergy and
Infectious Diseases. The National Cancer Institute has announced the
creation of the first network for cancer information, which will allow
the integration and sharing of all basic and applied cancer research
activities among multiple agencies.
We encourage cross-agency participation of DOD scientific staff in
NIH and NSF strategic research planning that would likely lead to
mutually beneficial interagency initiatives, thereby maximizing the
Congressional investment.
In conclusion, Mr. Chairman and members of the Subcommittee, I
thank you for this opportunity to testify before you on behalf of my
more than 60,000 scientist-colleagues. We urge you to increase support
for DOD 6.1 research and encourage inter-agency partnerships that will
leverage the return on our national security research investment.

Senator Stevens. Dr. Knapp.

STATEMENT OF DEIRDRE J. KNAPP, Ph.D., AMERICAN
PSYCHOLOGICAL ASSOCIATION

Dr. Knapp. Good morning. Mr. Chairman and members of the
subcommittee: I am Dr. Deirdre Knapp, Manager of the
Assessment, Research, and Analysis Program at the Human
Resources Research Organization (HmRRO). I am submitting
testimony on behalf of the American Psychological Association,
a scientific and professional association of more than 155,000
psychologists and affiliates.
Although I am sure you are aware of the large number of
psychologists providing clinical services to our military
members, you may be less familiar with the extraordinary range
of research conducted by psychological scientists within the
Department of Defense. Our behavioral researchers work on
issues critical to the national defense, particularly with
support from the Army Research Institute for the Behavioral and
Social Sciences, the Office of Naval Research, and the Air
Force Office of Scientific Research.
In its most recently congressionally mandated report, the
independent Defense Science Board (DSB), noted that
``Increasingly, scientific research is the key to military
supremacy.'' However, for each of the last 5 years the
Pentagon's budget request for science has not even kept up with
inflation, much less approach the minimum level suggested by
the DSB.
We thank this subcommittee and your colleagues in the House
for reversing deep cuts and providing critical additional
support for DOD research in the past several funding cycles.
American Psychological Association (APA) joins the Coalition
for National Security Research and the DSB in recommending $10
billion for DOD research in fiscal year 2002. Within the DOD,
the military service labs provide a stable mission-oriented
focus for science and technology, conducting and sponsoring
basic research, applied exploratory development research, and
advanced development research. Psychological scientists address
a broad range of important issues and problems with expertise
in understanding and optimizing human performance individually,
in teams, and with regard to human-system interactions.
For example, I am working with a project now with the Army
Research Institute to develop the foundation for a promotion
system that would help ensure that the backbone of the Army,
its Non Commission Officer (NCO) corps, is prepared to meet the
evolving demands of the twenty first century.
As another example, the Navy has funded cutting edge
research in the development and application of artificial
intelligence systems that, for example, allow for highly
effective shipboard training.
Unfortunately, reductions in the Air Force's support for
applied research in human factors have resulted in an inability
to determine the human-system requirements early in system
concept development, when the most impact could be made in
terms of manpower and cost savings. DOD research has continued
to demonstrate the importance of considering the human factor
in organizational and system performance and has led to
important outcomes, not only in the military but in the public
and private sectors in which scientific advances for military
research have been successfully applied.
We urge the subcommittee to provide funding increases for
each of these three military laboratories at the DSB-
recommended level of inflation plus 2 percent, a total of 4.1
percent. Please help our military men and women by supporting
DOD human-oriented research.
Thank you.
Senator Stevens. Thank you very much, doctor.
[The statement follows:]

PREPARED STATEMENT OF DEIRDRE J. KNAPP, PH.D.

Mr. Chairman and Members of the Subcommittee, I'm Dr. Deirdre
Knapp, Manager of the Assessment Research and Analysis Program at the
Human Resources Research Organization. I am submitting testimony on
behalf of the American Psychological Association (APA), a scientific
and professional organization of more than 155,000 psychologists and
affiliates. Although I am sure you are aware of the large number of
psychologists providing clinical services to our military members here
and abroad, you may be less familiar with the extraordinary range of
research conducted by psychological scientists within the Department of
Defense. Our behavioral researchers work on issues critical to national
defense, particularly with support from the Army Research Institute,
the Office of Naval Research, and the Air Force Office of Scientific
Research. I would like to address the proposed fiscal year 2002
research budgets for these three military laboratories within the
context of the larger Department of Defense Science and Technology
budget.

Department of Defense (DOD) Research Budget
APA joins the Coalition for National Security Research, a group of
over 50 scientific associations and universities, in urging the
Subcommittee to provide DOD with $10 billion for 6.1, 6.2 and 6.3 level
research in fiscal year 2002. This figure also is in line with the
recommendation of the independent Defense Science Board.
The Defense Science Board (DSB) released its most recent
(Congressionally-mandated) report several weeks ago, noting that
``increasingly, scientific research is the key to military supremacy''
and concluding that ``if the DOD does not pursue a strong forward
looking Science and Technology Program, it runs the danger of
ultimately falling behind potential challengers.'' For each of the last
five years, the Pentagon's budget request for science has not even kept
up with inflation, much less approached the minimum levels suggested by
the DSB. We thank this Subcommittee and your colleagues in the House of
Representatives for reversing deep cuts and providing critical,
additional support for DOD research in the past several funding cycles.
Both the DSB and the Coalition for National Security Research (CNSR)
recommend funding the DOD Science and Technology Program at a level of
at least $10 billion in fiscal year 2002 in order to maintain global
superiority in an ever-changing national security environment.
Within DOD, the military service laboratories provide a stable,
mission-oriented focus for science and technology, conducting and
sponsoring basic (6.1), applied/exploratory development (6.2) and
advanced development (6.3) research. These three levels of research are
roughly parallel to the military's need to be able to win a current war
(through products in advanced development) while concurrently preparing
for the next war (with technology ``in the works'') and the war after
next (by taking advantage of ideas emerging from basic research). Our
past investment in basic research in particular is responsible for the
dramatic increases we have seen in our military capabilities--and yet
basic research continues to be a target for cuts and elimination.
Especially at the 6.1 and 6.2 levels, research programs which are
eliminated from the mission labs as cost-cutting measures are extremely
unlikely to be picked up by industry, which focuses on short-term,
profit-driven product development. Once the expertise is gone, there is
absolutely no way to ``catch up'' when defense mission needs for
critical human-oriented research develop.
The President's budget blueprint does not provide funding details
beyond the proposed overall DOD budget, but we urge this Subcommittee
to provide funding increases for each of the three military
laboratories at the DSB-recommended level of inflation plus two
percent. Using the current inflation rate for research costs of 2.1
percent, a 4.1 percent increase in the research budgets will meet the
DSB's recommendation of inflation plus two percent.

The Army Research Institute for the Behavioral and Social Sciences
(ARI)
In keeping with the DSB's recommendation to increase DOD research
budgets by inflation plus two percent, APA recommends that the basic,
applied and advanced development behavioral research programs at the
Army Research Institute be funded at $24.48 million.
ARI works to build the ultimate smart weapon: the American soldier.
ARI was established to conduct personnel and behavioral research on
such topics as minority and general recruitment; personnel testing and
evaluation; training and retraining; and attrition. ARI is the focal
point and principal source of expertise for all the military services
in leadership research, an area especially critical to the success of
the military as future war-fighting and peace-keeping missions demand
more rapid adaptation to changing conditions, more skill diversity in
units, increased information-processing from multiple sources, and
increased interaction with semi-autonomous systems. Behavioral
scientists within ARI are working to help the armed forces better
identify, nurture and train leaders. One effort underway is designed to
help the Army identify those soldiers who will be most successful
meeting 21st century noncommissioned officer job demands, thus
strengthening the backbone of the service--the NCO corps.
Another line of research at ARI focuses on optimizing cognitive
readiness under combat conditions, by developing methods to predict and
mitigate the effects of stressors (such as information load and
uncertainty, workload, social isolation, fatigue, and danger) on
performance. As the Army moves towards its goal of becoming the
Objective Force (or the Army of the future: lighter, faster and more
mobile), psychological researchers will play a vital role in helping
maximize soldier performance through an understanding of cognitive,
perceptual and social factors.

The Office of Naval Research (ONR)
APA recommends an increase of inflation plus two percent for the
Office of Naval Research's 6.1, 6.2 and 6.3 budgets, for a total of
$63.605 million.
The Cognitive and Neural Sciences Division (CNS) of ONR supports
research to increase the understanding of complex cognitive skills in
humans; aid in the development and improvement of machine vision;
improve human factors engineering in new technologies; and advance the
design of robotics systems. An example of CNS-supported research is the
division's long-term investment in artificial intelligence research.
This research has led to many useful products, including software that
enables the use of ``embedded training.'' Many of the Navy's
operational tasks, such as recognizing and responding to threats,
require complex interactions with sophisticated, computer-based
systems. Embedded training allows shipboard personnel to develop and
refine critical skills by practicing simulated exercises on their own
workstations. Once developed, embedded training software can be loaded
onto specified computer systems and delivered wherever and however it
is needed.

The Air Force Office of Scientific Research (AFOSR)
APA urges the Subcommittee to fund basic, applied and advanced
technology development behavioral research at the Air Force Office of
Scientific Research at a level of $105.5 million (inflation plus 2
percent).
AFOSR behavioral scientists are responsible for developing the
products which flow from manpower, personnel, and training and crew
technology research in the Air Force, products which are relevant to an
enormous number of acknowledged Air Force mission needs ranging from
weapons design, to improvements in simulator technology, to improving
crew survivability in combat, to faster, more powerful and less
expensive training regimens.
As a result of recent cuts to the Air Force behavioral research
budget, for example, the world's premier organization devoted to
personnel selection and classification (formerly housed at Brooks Air
Force Base) no longer exists. This has a direct, negative impact on the
Air Force's and other services' ability to efficiently identify and
assign personnel (especially pilots). Similarly, reductions in support
for applied research in human factors have resulted in an inability to
fully enhance human factors modeling capabilities, which are essential
for determining human-system requirements early in system concept
development, when the most impact can be made in terms of manpower and
cost savings. For example, although engineers know how to build cockpit
display systems and night goggles so that they are structurally sound,
psychologists know how to design them so that people can use them
safely and effectively.

Summary
On behalf of APA, I would like to express my appreciation for this
opportunity to present testimony before the Subcommittee. Clearly,
psychological scientists address a broad range of important issues and
problems vital to our national security, with expertise in
understanding and optimizing cognitive functioning, perceptual
awareness, complex decision-making, stress resilience, and human-
systems interactions. We urge you to support the men and women on the
front lines by supporting the human-oriented research within the
laboratories and universities. Thank you.

Senator Stevens. Sergeant Dean.

STATEMENT OF CHIEF MASTER SERGEANT RICHARD M. DEAN,
U.S. AIR FORCE [RETIRED], LEGISLATIVE
ASSISTANT, AIR FORCE SERGEANTS ASSOCIATION

Sergeant Dean. Mr. Chairman, distinguished committee
members: On behalf of the Air Force Sergeants Association and
our 135,000 Active, Reserve, Guard and military retiree
members, I want to thank you for the tremendous support this
committee has provided for our personnel and their families'
military quality of life issues last year and also thank you
for this opportunity.
There are about four areas that I want to highlight today,
the first being military pay. Due to force drawdowns that
started in the early nineties, enlisted members have had to
assume positions of much greater responsibility, and these
positions often were held by commissioned officers. The
enlisted corps stepped up and they accepted this increase in
responsibilities. However, they have had no significant
increase in compensation.
We believe the method of military compensation needs a new
model and we need to compensate them for their increase in
their responsibilities. We also think that we should raise
military pay to ensure that all military personnel are above
the poverty level and that no one is having to receive
additional funds in order to not be on the food stamp program.
The next area I would like to highlight is the basic
allowance for housing (BAH). The basic allowance for housing
are based on an unrealistic standard. Rank determines the
square footage, the number of bedrooms, and whether an
apartment or stand-alone dwelling is authorized. This
unrealistic standard forces most military members to increase
their out of pocket expenses so they can live in relatively
safe neighborhoods with relatively decent schools.
Two categories of basic allowance for housing currently
exist, the with-and without-dependent rates. The with-dependent
rate is seen in order to relieve some of the burdens on married
military members. However, members in both categories see this
as unjust. Many single members, especially E-4 and above, are
forced to live off base because there is not enough dormitory
space today. Cost for a one-bedroom apartment whether the
person is married or single does not matter. It still costs the
same.
We ask that this committee restructure the BAH system to
include only one category and a more equitable system aimed at
protecting all military members regardless of marital status or
rank.
Another area of major concern is the retirement benefits.
Service before self was a core value of military members long
before core values were buzzwords. Regretfully, our country has
not shown a reciprocal dedication to some of those military
members, and those are the ones who retired from the military
with 20 or more years of service with a service-connected
disability. These members have their retirement pay offset
dollar for dollar for every dollar received from Veterans
Administration (VA) disability compensation.
We believe that retirement pay and disability compensation
are as different as daylight and dark. We ask this committee to
make efforts to not keep these disabled retirees in the dark
any longer, but to provide them with what they have earned, and
that is their full military retirement pay and their VA
disability compensation.
On the issue of education, we ask you to raise the value of
the Montgomery GI Bill to cover the cost of an average
university. We also ask that a one-time enrollment opportunity
be abolished and replaced with an open enrollment window, to
occur at any time during a member's military service, and that
this option be available to all members currently serving in
the military.
We also ask that the Montgomery GI Bill enrollment
contribution fee be eliminated and that this benefit be
provided as an earned benefit. We also ask that members be
afforded the option to transfer any or all of their earned
education benefits to dependents.
Finally, for our Air Reserve component members, we ask that
full comparable retirement benefits be provided as soon as the
reserve member retires from the service to their country,
instead of having to wait until they are age 60.
Finally, we ask that funds be made available to pay for our
Air Reserve members' health care premiums when they are called
to active duty for periods of more than 30 days.
Mr. Chairman, committee, with that, thank you.
Senator Stevens. Thank you very much, Sergeant. Nice to see
you today.
[The statement follows:]

PREPARED STATEMENT OF RICHARD M. DEAN

Mr. Chairman and distinguished committee members, on behalf of the
135,000 members of the Air Force Sergeants Association, we want to
thank you for the tremendous support this committee provided last year
to improve the military health care systems, increase military pay and
allowances, increase educational benefits and provide a special,
although small, allowance for severely disabled veterans. We also thank
you for this opportunity to offer our views on the 2002 funding efforts
needed to assure the quality-of-life of our Armed Forces, thereby
improving recruitment and retention goals in an effort to ensure the
defense of our country.
In this testimony, we will limit the focus to items directly
related to quality-of-life issues for active duty Air Force, Air
Reserve Component, and retired members and their families. Those items
are overall quality-of-life, workload vs. available workforce, military
health care, housing and housing allowances, pay, and retirement
benefits.

THE QUALITY OF THE MILITARY LIFE

The men and women in the Armed Forces work very long and hard hours
in extremely difficult environments to protect this nation. They are
generally selfless and devoted to get the job done--often to the
detriment of their own well-being while sacrificing many things the
average American citizen often takes for granted.
Contemporary military forces have faced significantly greater
missions with considerably fewer people, increasing family separations,
declining health care programs, curtailed pay and allowances increases,
deteriorating military housing, diminishing opportunity for educational
benefits, and more out-of-pocket expenses with every military member
relocation. It is amazing that so many continue to selflessly serve in
the Armed Forces. They obviously do so because of their dedication to a
higher, patriotic ideal. However, it is time to take certain actions to
provide the necessary funding needed to enhance the quality of enlisted
military lives.

WORKLOAD VERSUS AVAILABLE WORKFORCE

As a result of our Armed Forces members' efforts, we have witnessed
the fall of the Berlin Wall, the collapse of the Soviet Union, and the
emergence of the United States as the world's only true ``super
power.'' As the United States got caught up in the so-called ``Peace
Dividend'' to redirect funds from and decrease manpower within the
Department of Defense, many failed to acknowledge the increase in our
Armed Force's responsibilities. No longer is our National Strategy one
of projecting America's military force only in support of our ``vital
national interests'' but instead one of global engagement and full
participation in police actions and humanitarian efforts (military
operations other than warfare) around the world. This has taken a
tremendous toll on maintaining an all-volunteer force, because instead
of decreasing the workload commensurate with the decrease in personnel,
the workload has increased to provide support for those operations
other than warfare. Global military missions (with far fewer people)
have increased several fold while manpower has decreased by almost
half. The results are not only an increase in deployments, but also an
increase in responsibilities of those left behind as they now must
assume even more tasks because the job that needs to be done at home
must continue to be accomplished.
Doing ``more with less'' is greatly deteriorating the morale,
proficiency, recruitment and retention of our military forces. Having
far fewer people accomplishing far greater tasks has resulted in longer
hours, significantly more family separations, higher levels of stress,
and the creation of a physically challenged force. Many military
members wonder if they might have healthier, happier lives on the
``outside'' as a participant in the fruits of the booming economy they
helped to create. The Air Force, in particular, has implemented
initiatives in efforts to decrease the impact of this ``spent force''
situation by transitioning to an Expeditionary Aerospace Force (EAF)
concept. Within the EAF concept, predictability of long-term
deployments are more visible, and members should be better able to plan
their individual responses to lessen the impact of deployments and
family separations. However, it should be noted that the EAF is not a
``fix'' to the manning problems the Air Force faces, but instead an
attempt to provide the senior Air Force leadership with a management
tool to aid them in meeting the increasing demands with fewer people.
While we applaud this effort, it will only be successful if manning
levels are increased. Many officials call for further base realignments
and closures to eliminate unnecessary infrastructure and transfer the
assets (people, equipment and money) to remaining bases. If this is in
fact done, it would decrease the workload and lessen the pace of
deployments. If this transfer of manpower is not done, more and more
military members will leave, and fewer and fewer people will choose to
enter any of our Armed Services. This is a situation we have created,
and it is one we can and must correct. We urge this Congress to
increase the quality of the lives of the all-volunteer force by taking
action to establish manpower levels to match the mission requirements
our nation has chosen to levy on those who serve--both at home and
abroad.

MILITARY PAY

Building on the gains made in the fiscal year 2001 Authorization,
it is important to realize that the work is not finished. We applaud
the pay adjustments made, but they are only the first step in
accurately adjusting the pay charts. Also, increasing annual future
military pay raises through the year 2006 by a half percentage above
the Employment Cost Index sent a strong signal to those serving in our
Armed Forces. However, there are some realities which must be examined
about the way we pay our military members--especially the enlisted
members.
There are two pay charts for the military: one for commissioned
officers, and a significantly lower-compensation one for enlisted
members. The net effect of across-the-board pay raises over the years
has served to pull these charts further apart while the manpower
reductions have placed more and more responsibility upon the shoulders
of the enlisted force. As AFSA representatives visit United States Air
Force bases around the world, they run into innumerable cases where
relatively low-ranking enlisted members are handling technologically
awesome tasks. In addition, many positions previously held by
commissioned officers are now held by enlisted members. The
responsibilities of these converted positions, often involving life or
death decisions, have not changed; only the pay grades of the persons
now making those decisions have changed. Not only have the mid-to-upper
grade noncommissioned members assumed many tasks formerly performed by
commissioned officers, they often assume the responsibility to train
junior commissioned officers.
While at the same time facing the same ``economic survival''
challenges as the commissioned officers, the enlisted members have not
only accepted the burden of increased responsibility, they have become
increasingly educated in an attempt to adequately carry out those
responsibilities placed upon them. It is time that military
compensation be re-examined and a new model must be established to
remove the disparity between the officer and enlisted compensation
tables by moving them closer together to accurately reflect the
changing enlisted roles in relation to the overall military
establishment. This will aid tremendously to help sustain the all-
volunteer force.
Another key pay area is the Basic Allowance for Subsistence (BAS).
BAS is designed to pay for food for military members. Because the cost
of food parallels the cost of goods and services in our economy, over
the years Congress has increased the BAS by the same percentage each
year as the growth of basic military pay--until two years ago when BAS
was frozen at one-percent growth per year for the next several years.
This change resulted from the contention that military members,
enlisted in particular, were receiving more than they needed for food,
and (some claim) DOD's desire to provide alternate funding to pay for
their meal card program (payment for the members residing in the
dormitories to eat in base dining facilities). Also, DOD maintained
that limiting the growth of BAS would allow the provision of BAS
allowances to those residing in the dormitories--a reality that has yet
to come about except in very rare cases--usually when it is
inconvenient for the government to feed the troop due to his/her
austere duty hours. When it is in the best interest of DOD, DOD
complains that it cannot feed military members in their dining
facilities at the allowance rate for BAS. Last year's Defense Bill even
tied BAS to a food index. AFSA and its members believe that it is time
to once again tie the annual growth of BAS to military pay increases.
We must:
--Ensure adequate future pay raises.
--Establish a new model for military pay recognizing modern enlisted
responsibilities.
--Establish minimum pay and compensation levels to place all members
above the national poverty level without having to provide
special subsidies in efforts to avoid admitting there are
enlisted personnel eligible for food stamps.
--Tie the annual increase of BAS to the military pay raise
percentages.

HOUSING AND HOUSING ALLOWANCES

Where a military member and his/her family live is dictated by a
number of factors, usually not by the member's choice. Those deploying,
of course, live where (and under whatever conditions) the location of
the mission dictates. At home base, factors include the member's rank,
the number of accompanying family members (if any), the availability of
on-base housing, dormitory space, and other factors. Those living on
base generally face a variety of models of on-base housing ranging from
a half-century old, to very modern structures. Some homes meet the
quality muster--some are substandard. In an effort to achieve
efficiencies, DOD has entered into arrangements with private industry
for the construction and maintenance of on-base facilities. The goal of
construction outsourcing and privatization is to cut down on the
backlog of the number of homes that are dilapidated and which must be
upgraded or replaced. AFSA supports this effort toward privatization
with the caveat that we must ensure that privatization should not
infringe on any military benefits or cause more out-of-pocket expenses
for the military member.
For those who must live off-base, the provision of the Basic
Allowance for Housing (BAH) is intended to account for the average of
85 percent of the members out-of-pocket housing expenses. This
committee has recently taken strong steps to provide funding to achieve
that goal. Indeed, BAH is based on an independent assessment of the
cost of housing for given areas based on certain parameters, including
an arbitrary standard of housing (square footage, number of bedrooms,
and whether an apartment/townhouse or stand-alone dwelling) determined
by rank. For example, under the BAH standard, the only enlisted grade
authorized a stand-alone dwelling is the very highest grade of ``E-9.''
AFSA supports full funding of BAH, but maintains that BAH has created
significant consternation among the military members because of the
unrealistic standard used to determine where military members may live.
Their allowance generally dictates the neighborhoods where they reside
and the schools their children may attend. Ironically, in order to
protect their families from the limitations of the standard, enlisted
members--especially the mid to lowest ranking (who are obviously paid
the least)--must expend additional out-of-pocket dollars. A fact of the
military institution is that privileges and benefits increase following
the achievement of higher rank; however, BAH needs to be restructured
to protect all military members and their families regardless of the
member's rank.
Another inequity in the BAH arena is the difference in housing
allowances paid to married members versus single members. While it is
understood this difference is aimed at easing the burden on married
military members, this is seen by members on both sides as unjust in
light of equal compensation for equal work. The single member works
side by side with the married member on a daily basis doing the exact
same job. The single member willingly often sacrifices to volunteer for
deployments and work holidays so that married members can have the
opportunity to spend a little more time with their families. The single
members do this out of a sense of esprit de corps and to help out their
counterparts who happen to have a family. Furthermore, many single
members (especially after attaining the grade of E-5) are forced to
live off-base because there is not enough single or unaccompanied
quarters available on-base. This is where the dissatisfaction,
rightfully so, begins to appear. The single member must pay the same
amount for a one-bedroom apartment as does the married member. This is
not equal pay for equal work--it is discrimination. This fact often
contributes to the single military member's decision to leave the
military service. We ask that this committee eliminate this injustice
by replacing the ``with and without dependents'' categories with one
BAH category.
To improve housing and housing allowances, we ask this committee
to:
--Ensure that military members' housing and housing allowances are
adequate to cover actual housing cost.
--Restructure BAH to provide adequate housing in safe neighborhoods
with quality schools for those members who must live off-base.
--Modify the housing standard that determines square footage, number
of bedrooms, and apartment or stand alone dwelling to more
closely coincide with average private sector standards.
--Eliminate the ``With and Without dependents'' categories and
replace them with one category to provide more equal
compensation for equal work accomplished.

MILITARY HEALTH CARE

Military health care and readiness are inseparable, and military
members and their families must know that no matter where they are
stationed or where the families live, their health care needs will be
taken care of. In recent years, military family member, retiree and
retiree family member medical and dental care have evolved from fully
funded coverages to member-subsidized coverages. Members have noted
these ``DOD erosion-conscious'' choices to lessen their overall benefit
which was promised to them and their families. Additionally, DOD has
closed many military hospitals and transformed them to limited-service,
outpatient ``clinics.'' In most locations, members and their families
must travel to a local civilian hospital for serious health care needs,
or must travel a distance to a health care facility for specialized
care. It is important to note that the 106th Congress adopted
legislation to allow for reimbursement of medically related travel
expenses; however, to date funding has not been obtained. This
legislation was seen as a monumental step in the right direction, and
members are anxiously awaiting full implementation of the program.
Without a doubt, medical care for self and family--while on active duty
and after retirement--is one of the top priorities of our military
members. The availability, or lack thereof, of quality medical care
greatly influences the member's decision when deciding to ``stay
military'' or look for better options in the private sector. This
association asks for your support to fund medically related provisions
that enhance the quality of life of the personnel who so greatly
sacrifice for the defense of this great country.

RETIREMENT BENEFITS

One of the values of the enlisted corps--before ``core values''
were buzzwords--was ``service before self.'' Thankfully many military
members took this value seriously and decided to remain in the service
to their country because of patriotism, their desire to make a
difference in the world, and their dedication to and pride in their
country. Regretfully, their country has not shown a reciprocal
dedication to many of those who gave so much in defense of this
country--those being the members who retired after 20 or more years of
honorable service with a service connected disability. Retired members
in this category have their retirement pay reduced dollar-for-dollar
for each dollar they receive in veterans disability compensation. Any
other disabled veteran, regardless of whether they continued to work
for and eventually retire from the Federal Sector (as FBI agents, Civil
Service employees, elected officials, etc.), State, City or County
government, or any other form of employment receive their full veterans
disability compensation and their full retirement pay.
It is our position that ``retirement pay'' is for extended and
honorable service. It is also our position that ``veterans disability
compensation'' is compensation for decreased functionality or suffering
as a result of that service. We do not believe these two in any shape,
form or fashion--regardless of the math used--equate to using the same
period of service for similar benefits. Retirement pay and disability
compensation are not similar benefits, they are as different as
daylight and dark. Armed Forces' retirees see a disgrace in their
country asking them to pay their disability compensation for injuries
sustained in the defense of their country! We ask this committee to do
the right thing and correct an injustice that has gone on far too long.
This injustice can be corrected by adopting S. 170, The Retired Pay
Restoration Act of 2001.
Another area where there is great concern among our membership is
the reduction in benefits from 55 percent to 35 percent for those
surviving spouses receiving annuities under the Survivors Benefits Plan
(SBP) and entitled to Social Security benefits. Upon retirement, the
military members who elected to participate in SBP had a portion of
their retirement pay withheld for the purpose of paying for their
surviving spouse's annuity. Enactment of S. 145 would, over a period of
time through 2011, eliminate the offset and bring all SBP annuity
recipients up to the same percentage level.
To show this country's dedication and compassion for its military
retirees, we ask you to:
--Provide military retirees full concurrent receipt of their earned
retirement pay and Veterans Disability Compensation by
supporting S. 170 would do.
--Eliminate the SBP reduction surviving spouses face when they attain
the age of 62 by supporting S.145.

EDUCATION

We should take action now to raise the value of the Montgomery G.I.
Bill (MGIB), the military's primary tool for a successful post-military
readjustment into civilian society. The MGIB should cover the cost of
an average university, instead of an arbitrary dollar figure that has
little to do with actual education costs. This should include adequate
funding to cover books, tuition and fees toward a higher education for
not only after separation, but also for those able to take classes
while in the military. The better educated a member becomes, the better
he/she can perform their increasingly difficult taskings and accept
greater responsibilities.
Also, we ask this Congress to change the enrollment methods now in
place. The first thing to do is immediately provide an opportunity, an
open window, for all military members not enrolled in the MGIB to
enroll in that program. The other enrollment change is to eliminate the
one-time enrollment opportunity during basic training--when members can
little afford to enroll and are so overwhelmed with information. We ask
you to allow military members to enroll in the MGIB anytime during
their careers. However, if only windows of opportunity for enrollment
are to be used, a less than optimum option we recommend is to allow an
opportunity for enrollment at each reenlistment point.
Additionally, we ask you to support legislation to change the
policies that tend to push members away from the educational benefit.
Policies such as requiring military members to contribute $1,200 toward
their own educational ``benefit.'' A better move would be to eliminate
the $1,200 member contribution; this would affirm that military members
``earn'' the benefit by putting their lives on the line for this
nation.
Finally, we ask you to consider this benefit as an earned program
which the member may choose to transfer, in whole or in part, to
immediate family members. We should not be concerned that the MGIB
benefit may be used if members are allowed to transfer the benefit, but
instead encourage its use to provide for a better educated citizenry.
We ask that:
--A new G.I. Bill Model tying the value of the MGIB to an annual
educational benchmark that reflects the actual cost of tuition,
book, and fees at an average four-year college be implemented.
--An open window for enrollment for in the MGIB be established.
--Eliminate the member's $1,200 enrollment fee and make the MGIB an
earned benefit.
--Make enrollment in this benefit an automatic part of being in the
military or, at the least, allow members to enroll at any time
during their careers.
--Allow members to transfer the educational benefit, in whole or in
part, to immediate family members.

RESERVE COMPONENT MEMBERS

Our nation's military is now truly a ``Total Force.'' Our military
forces could not even come close to accomplishing the many and varied
tasks levied upon them by our national military command authority
without the members of the Air Reserve Components ([ARC] Guard and
Reserve). The Citizen soldiers used to be standing ready in the
background in case they were needed in an extreme national emergency.
This is not the case today. The citizen soldier is working side-by-side
with their active duty counterparts on an almost daily basis. It is
safe to say, that our military forces could not meet mission
requirements without the constant dedication and support from the ARCs.
In addition to facing many of the same challenges active duty members
face, ARC members are still not totally recognized for all their
sacrifices. Therefore, additional funding must be made available to
provide the ARC members with adequate health care, full benefits,
comparable retirement benefits, and protection of their families. Their
readiness is critical to our nation's defense and attainment of these
goals for ARC members is important.
Just as with the active duty force, increased mission taskings are
coming despite plans for continued cutbacks in Reserve forces end
strengths. Furthermore, because of the nature of the use of America's
military forces, today--more than ever--reserve component members face
challenges of accomplishing increasingly long-term military
deployments, while at the same time hoping to continue to enjoy the
support of their civilian employers. Proposed tax credits as in S. 540,
Reserve Component Tax Assistance Act of 2001, if implemented for
employers and self-employed ARC members would be great gestures on the
part of our nation for their support to our ARC members and more
importantly-the defense of this country.
In order to meet the readiness needs of today's ARC forces, we
should:
--Provide full benefits and protection of the families of reservists.
--Ensure proper manning levels to allow home land missions and the
ability to participate in military tasking abroad.
--Provide comparable retirement benefits at the point of retirement
instead of at age 60.

CLOSURE

We not only ask members of our military forces to accomplish great
things under austere conditions, but to be ready to accomplish those
great things anywhere in the world on a few hours notice. These members
sacrifice many facets of their family lives. We ask them to sacrifice
many things most Americans take for granted. We--more often than not--
prevent them from owning a home due to change-of-assignment moves. We
force them to lose money in every change-of-station move because funds
provided do not cover actual cost and low weight allowances force them
to get rid of items they will have to replace at their new duty
location. We ask them to miss the births of their children, to miss
watching their children take their first steps, to miss seeing the
accomplishments of their children as their children grow up and become
adults. The military member can only hope that their families will
understand that all their sacrifices are for a higher calling--the
protection of the freedoms America holds so dearly. Service before self
is a value few can really say they understand. America's military
members and their families, can beyond a shadow of a doubt, honestly
say they understand that value.
Mr. Chairman, AFSA respectfully submits that the suggestions above
would enhance the quality of the lives of military members and, at the
same time, go a long way towards helping the Air Force meet its
readiness commitment by assuring a secure, positive force of
servicemembers. We also ask that while you're deliberating the
appropriation requirements of the fiscal year 2002 Defense Bill, its
personnel programs, and its role in attracting and retaining those who
serve, that you pay particular attention to the quality of the military
lifestyle. A lifestyle that inherently brings sacrifices that should
not be compounded through the loss or reduction of benefits, pay,
education or an unjust expectation that they someday pay their own
disability compensation. We trust you to take care of our men and women
in uniform and their families by maintaining current benefits and
ensuring future benefits--to include retirement benefits--commensurate
with the sacrifices we ask of our active and Air Reserve Component
members. For reserve force members, please include a realization of the
unique sacrifices and contingencies these Americans face. On behalf of
this association I want to thank you and the members of this committee
for your dedication to those who serve. We are proud to work to
complement your efforts and are ready to support you in matters of
mutual concern.

Senator Stevens. Dr. Bursell and Mr. Violi.
STATEMENTS OF:
SVEN BURSELL, M.D., JOSLIN DIABETES CENTER
RON VIOLI, JOSLIN DIABETES CENTER
Mr. Violi. Thank you, Mr. Chairman. I am Ron Violi with
Children's Hospital. I am here with Dr. Bursell from Joslin
Diabetes. I want to thank you for having us here today.
As we have shared with you in the past, Dr. Massimo Trucco
was the first scientist to discover the link between a common
childhood virus and the onset of juvenile diabetes. We now know
through published results that the Coxsackie B Virus (CVB), or
hand, foot, and mouth virus triggers the onset of type 1
diabetes in children and adults who are genetically at risk for
the development of this disease. This new research, which has
been conducted in collaboration with Army medical personnel, is
bringing us one step closer to developing a vaccine against
type 1 diabetes.
For fiscal year 2002, we are respectfully requesting $7.6
million in Federal funding to expand the joint diabetes project
by pursuing a program that will allow us to screen military
personnel and their dependents for genetic susceptibility to
diabetes. Our proposal has three broad goals:
First, by screening larger populations we intend to improve
our ability to determine who will actually develop diabetes.
Currently we can identify who is susceptible and who is
resistant with about an 85 percent accuracy.
Secondly, we plan to use Joslin's telemedicine network to
communicate information about individuals at risk for
developing diabetes, both to health care professionals and
families. In the future, this will be especially useful for
caring for minority populations, such as the American Indians
in Alaska or New Mexico, where there is a higher proportion of
incidence of diabetes.
Finally, we are offering appropriate counseling to limit
the psychological and behavioral effects that this information
will have.
We envision this to be a two-phased project. The first
phase will evaluate 5,000 families from ten separate Army
bases. Based on the results from phase one, the research
protocols will be refined, with the intention of implementing a
larger-scale screening program that would be made available on
all Army bases.
As part of our collaboration with Joslin, their
telemedicine infrastructure will be utilized to centralize the
data stored from our studies. By doing so, we can quickly
develop a large shared database with which we can establish any
association that may exist between genetic risk and a more
rapid development of diabetes complications.
The bottom line advantage to this analysis is that patients
that are at risk for developing diabetes or diabetic
complications may be detected early and managed more
appropriately via telemedicine, thus improving their medical
care, reducing complications, and lowering health care costs.
Mr. Chairman, we are pleased to be part of this project
with the Department of Defense and appreciate your and Senator
Specter's continuing support again this year.
Sven.
Dr. Bursell. Yes. I would also like to express our thanks
to the committee for their support and leadership. The Joslin
Vision Network (JVN) project represents a translation project
leveraging telemedicine technologies. The mission is to
translate results from 25 years of national multi-center
clinical trials in diabetic retinopathy into clinical practice
and make this evidence-based medical care available to all
diabetic patients.
As part of the project, by the end of December 2001 we will
have deployed a total of 31 remote JVN imaging sites and 8
centralized reading centers. Additionally, to date we have
trained and certified JVN images, 16 readers, and 3 senior
adjudicators. For fiscal year 2002 funding, taking this number
of imaging sites, with each imaging site potentially being able
to image 30 patients per day, we would be able to access
358,800 diabetic patients per year. The physicians who conduct
the imaging reading look at this in terms of over 700,000 eye
examinations per year because you have to examine each eye
separately.
We are also working with the participants in the DOD and
the VA towards the development of a comprehensive diabetes
management program in a virtual environment. With fiscal year
2002 funding of $7.6 million, we anticipate deploying a further
15 imaging stations at 10 different sites.
I would also like to highlight briefly the collaboration
with Children's Hospital of Pittsburgh that Mr. Violi referred
to. Again, we are excited about this because it will focus on
the analysis and potential identification of genes associated
with the development and complications of diabetes, and we will
leverage the JVN telemedicine platform and the work done for
retinopathy assessment and patient education.
Again, thank you very much for your attention and support,
sir.
Senator Stevens. Thank you very much, gentlemen.
[The statement follows:]

Prepared Statement of Dr. Sven Bursell

INTRODUCTION

Mr. Chairman and Members of the Committee, we would like to thank
you for the opportunity to appear before you. I am Dr. Sven Bursell of
the Joslin Diabetes Center, and joining me today to present an update
on the Joint Diabetes Project is Ronald Violi, president and chief
executive officer of Children's Hospital of Pittsburgh. We are here to
provide information on our work with the Departments of Defense and
Veteran's Affairs on the health concerns related to diabetes.
The establishment of the Joint Diabetes Project has allowed each of
our institutions to contribute its unique strengths and scientific
talents to this partnership. Three years ago, you provided us with the
opportunity to combine our resources to offer the most advanced
detection, treatment, prevention and basic and applied research
approaches to managing diabetes and its resulting complications.
We are excited about the progress that we have made to date and
remain enthusiastic and optimistic about our future collaborative
endeavors. Our proposal for third year funding will allow us to
continue to provide the most balanced approaches available to
addressing Type 1 and Type 2 diabetes (or juvenile and adult onset
diabetes, respectively).

Children's Hospital of Pittsburgh Plan for Fiscal Year 2002
As we have shared with you before, our principal investigator, Dr.
Massimo Trucco, was the first scientist to discover an immunologic link
between a common childhood virus and the onset of juvenile diabetes. We
now know through our recently published results that the particular
viral infection in which we are interested, CVB, or hand, foot and
mouth virus, triggers the onset of Type 1 diabetes in children and
adults who are genetically at-risk for developing the disease. This
research further emphasizes the involvement of viruses in initiating
autoimmune responses that cause the onset of diabetes.
Through our work with the Army's Telemedicine and Advanced
Technology Research Center (TATRC), we propose to continue our work
with Army medical personnel and with specialists in Endocrinology at
Walter Reed Army Medical Center to further isolate segments of the CVB
virus with the intent of developing a vaccine against type 1 diabetes.
Last year, to assist with these efforts, we began a collaborative
initiative between the National Science Foundation's Science and
Technology Center located at Carnegie Mellon University in Pittsburgh
and with experts in microarray technology at the University of
Tuebingen in Germany. This partnership has provided us with the ability
to use advanced medical technology to screen thousands of blood samples
each month to determine an individual's genetic susceptibility to
diabetes and other autoimmune diseases.
Using this technology, these blood tests can be performed in less
than 30 minutes and at a very reduced cost, allowing larger populations
to be screened more effectively. Our ultimate goal is that once at-risk
individuals are identified, they can be followed more closely and
ultimately vaccinated against type 1 diabetes.

FISCAL YEAR 2002 PROGRAM OVERVIEW

For fiscal year 2002, we look to expand upon the Joint Diabetes
Project funded by Congress through the Department of Defense by
pursuing a program that will allow us to embark upon an outreach
project that will enable us to screen Army personnel, and later other
military personnel and their dependents, for genetic susceptibility to
diabetes.
Using the advanced testing technology that we discussed, we feel
that we are uniquely qualified to provide rapid and cost-effective
diabetes screenings for large military populations.
Once these screenings have occurred, we can offer the most current
diabetes care, including psychological, emotional and clinical care
components to military personnel regardless of their location via the
use of telemedicine. In the future, this methodology will be especially
useful among minority populations such as the American Indians in
Alaska or in New Mexico where there is a higher proportional incidence
of diabetes.
This proposed project has three broad goals:
--First, by screening larger populations we intend to improve our
ability to determine who will develop diabetes. Currently, we
can identify who is susceptible and who is resistant with an
accuracy rating of between 80 and 85 percent.
--Second, we plan to utilize the telemedicine network that has been
already well established by Joslin to communicate information
about an individual's risk of developing diabetes both to
health care professionals and to families.
--And finally, we will tailor appropriate counseling to limit the
psychosocial and behavioral effects that this information will
have on individuals and family members.
We envision this to be a two-phased project. The first phase will
allow for the evaluation of 5,000 families from 10 Army bases, and
would include all children between 7 and 16 years of age. On the basis
of the results received from the first phase, the research protocols
will be refined with the intention of implementing a larger-scale
screening program that would be made available at all Army bases.
As part of our collaboration with Joslin, their telemedicine
infrastructure will be utilized to centralize the data stored from our
studies. In this way, we can quickly develop a large shared database of
genetic information from which we can perform the required analysis to
establish any association that may exist between genetic risk and a
more rapid development and/or progression of diabetic complications,
such as retinopathy, cardiovascular disease and kidney disease.
The bottom line advantage to this analysis is that patients who are
at-risk for developing diabetes or diabetic patients who are at
increased risk for developing complications could be detected early
enough so as to be appropriately managed via telemedicine, thus
improving their medical care, reducing complications and lowering the
costs associated with their care.

FISCAL YEAR 2002 CHP/DIABETES INSTITUTE OF PITTSBURGH FUNDING REQUEST--
$7,600,000

The diabetes research program at Children's Hospital of Pittsburgh
has become a world-class, state-of-the-art research center that will
have a tremendous impact at both the regional and national levels.
For fiscal year 2002, we are respectfully requesting $7.6 million
in federal funding so that we may continue our efforts and expand upon
the important work that we have begun. The proposed budget will
consider expenditures associated with:

New Advanced Technology to Improve Prediction and Prevention of Type 1
Diabetes

Salary Support................................................ $500,000
Equipment (laboratory and electronic)......................... 2,500,000
Supplies/Reagents............................................. 1,500,000
Management Cost (mailing, receiving, bar-coding, storing blood

samples).................................................. 1,500,000
CHP & Joslin Joint Program (mapping of genes predisposed to
diabetes complications)................................... 500,000
DOD Administrative Fee........................................ 1,100,000
--------------------------------------------------------------
____________________________________________________

Total CHP/Diabetes Project Costs........................ 7,600,000

JOSLIN DIABETES CENTER

Fiscal Year 2001 Status Report
JVN Deployment.--By December 2001 we will have deployed a total of
8 independent remote JVN imaging sites and 5 centralized reading center
sites operating off 2 independent servers in the Department of Defense
Infrastructure concentrating on sites in Hawaii, Walter Reed Army
Medical Center and Alaska at Elmendorf Air Force Base and Bassett Army
Medical Center. In the VA system we will have deployed a total of 10
remote imaging sites, 3 reading center sites operating off 2
independent servers and at the Joslin Diabetes Center we will have 7
imaging sites and 4 reading center sites operating of the Joslin JVN
server for a total of 37 separate sites operating the JVN system.
Additionally, a total of 21 JVN imagers, 16 JVN readers and 3 senior
JVN adjudicators have been trained and certified throughout the
participating organizations.
JVN Validation.--The JVN validation study has been completed and
the results published in the March issue of Ophthalmology. The results
demonstrated the equivalence, with respect to level of diabetic
retinopathy assessment, between JVN digital video imaging through a
non-dilated pupil to the current clinical gold standard of the Early
Treatment Diabetic Retinopathy Study protocol of dilated 7 stereo
standard field 35-mm photography. In addition the above prestigious
peer reviewed publication the JVN studies have resulted in a further 5
peer reviewed publications and a total of 10 abstracts accepted for
presentation at the Association for Research in Vision and
Ophthalmology, American Diabetes Association, and American Telemedicine
Association national meetings. Additionally, the ATA has devoted a
symposium for the 2001 meeting dedicated to the JVN system with an
opportunity for participants from all organizations to present results
in a focused forum.
JVN Application Enhancement.--The enhancements to the JVN
application will be tested and completed by March 31, 2001. This next
generation JVN application is developed using totally non-proprietary
hardware and software. Workstations are now standard PCs with MicroSoft
2000 operating systems interfaced to the Agfa PACS environment. The
system is fully DICOM and HL7 compliant as well as being compliant to
the latest HIPAA security standards. The development off the Agfa PACS
environment facilitates direct interfaces to the DOD CHS and VA VISTA
medical record systems. Thus the JVN system becomes an integrated
component of the DOD and VA patient medical record system.
Additionally, the JVN system is operational over the internet with the
appropriate securities implemented. The deployments in 2001 will be
performed so as to develop a proof-of-concept model for widespread,
cost effective, and sustainable deployment and support.
Deployment of the Advanced System.--The prototype of the new non-
mydriatic retinal imaging system has been completed and will undergo an
iterative cycle of testing and refinement during the rest of 2001. The
rationale for this development effort was to enable a portable and less
expensive retinal imaging system that would overcome the current
limitations of the commercially available models. The portability is a
critical requirement for mobile operations to remote communities as
well as in the DOD. The automated reading center application is also
being readied for deployment. The JVN has been working with an image
analysis vendor to develop this application. The first phase of the
application has been developed and will be undergoing validation
testing in April using the JVN data base of 48,000 retinal images that
have already undergone manual grading for diabetic retinopathy. If the
validation tests prove to be positive then the application will be
deployed with all JVN reading center systems. The application is
currently designed to automatically detect any abnormalities in the
retinal images. It is anticipated that the implementation of this
application will reduce the reading center workload by at least 50
percent.

COLLABORATIVE PROGRAM WITH CHILDREN'S HOSPITAL OF PITTSBURGH

An initial symposium that includes investigators from the JVN and
Children's Hospital of Pittsburgh will be hosted by the VA as part of
their National Diabetes meeting on March 28, 2001. The deliverable for
this meeting is consensus agreement on a formalized collaborative
program that leverages the telemedicine experience of the JVN and the
immunogenetics expertise of Children's Hospital of Pittsburgh in the
devlopment of a program that can significantly impact on the care of
diabetic patients.

Fiscal Year 2002 Objectives
Deployment.--We anticipate that the current level of funding for
2002 will allow us provide support for existing JVN systems and to
target new deployments for 15 additional JVN systems at 10 different
sites that will be identified in collaboration with the participating
agencies. This will make a total of 22 sites deployed through the DOD
and VA that will be operating the JVN system.
JVN Application Enhancements.--There will be ongoing development
work to continue enhancements to the JVN platform. These enhancements
will include incorporation of a module to facilitate rigorous clinical
research studies in diabetic eye disease, to validate JVN imaging for
the detection of other eye diseases such as glaucoma and age related
macula degeneration, and to incorporate application enhancements based
on user feedback.
Comprehensive Diabetes Management program.--Work will be continuing
for the development of the appropriate modules that will be deployed
and implemented in the web-based comprehensive diabetes management
program. The development of these modularized components is vital to
user acceptance as modularization will facilitate customization to meet
the specific needs of each practice. It is anticipated that the
development of the interactive web-based education and behavior modules
will provide the largest potential benefit with respect to motivating
patients to set reasonable goals for their management of diabetes and
thus maximize the clinical benefit.
Deployment of the Advanced System.--We will incorporate full
automation into the new retinal imaging system. This will facilitate
the imaging of the different fields required for assessment of level of
diabetic retinopathy. Thus it is anticipated that the retinal imaging
system based on retinal tracking and translation of the optical system
be capable of acquiring all retinal images without having the patient
change fixation. This will reduce the time for retinal imaging and
significantly increase patient throughput. We will also continue our
development efforts to enhance the capability of the automated retinal
reading application to detection of specific types of retinal lesions.
This will further enhance the efficiency and reduce the resource load
that would be needed to staff a JVN reading center.

COLLABORATIVE PROGRAM WITH CHILDREN'S HOSPITAL OF PITTSBURGH

The main area of potential collaboration would be in the
identification of genes associated with the risk for diabetic
complications. This is important as we know that some diabetic patients
will develop complications much more rapidly than other diabetic
patients who are comparably aged with comparable glycemic control. This
fact would implicate a genetic component associated with a risk for
developing diabetic complications. Thus it becomes logical to leverage
the expertise at Pittsburgh with respect to immunogenetics and genechip
technologies and Joslin's expertise with gene analysis and JVN
technology to undertake a study involving gene expression associated
with an increased risk for development of diabetic complications such
as diabetic retinopathy with a primary focus on type 2 diabetic
patients.

Joslin Diabetes Center Fiscal Year 2002 Budget

Joslin expenses and personnel costs, including Equipment
purchases for DOD ownership...............................$3,628,000
DOD/VA expenses and personnel costs........................... 2,560,000
Management and fees extracted by DOD.......................... 912,000
Collaborative research with CHP............................... 500,000
--------------------------------------------------------------
____________________________________________________

Total, Joslin Diabetes Center........................... 7,600,000

SUMMARY

For fiscal year 2002, federal funding for the Joint Diabetes
Project will allow both Joslin Diabetes Center and Children's Hospital
of Pittsburgh to continue their work to improve the diagnosis and
treatment of enlisted personnel and their dependents with diabetes.
Through concentration of efforts and cutting edge research, it is our
intent to ultimately identify a vaccine against and a cure for the
disease.

Joint Diabetes Project, Fiscal Year 2002 Funding

Joslin Diabetes Center........................................$7,600,000
Children's Hospital of Pittsburgh............................. 7,600,000
--------------------------------------------------------------
____________________________________________________

Total Program...........................................15,200,000

Mr. Chairman, we are pleased to be a part of this project with the
Department of Defense and appreciate the support that your Committee
provided to us last year. Please know that we would be appreciative of
your continued support again this year. At this time, we would be
pleased to answer any questions from you or any other Members of the
Committee.

Senator Stevens. Our next witness is Chief Master Sergeant
Olanoff.

STATEMENT OF CHIEF MASTER SERGEANT MARK H. OLANOFF,
U.S. AIR FORCE [RETIRED], NATIONAL
LEGISLATIVE DIRECTOR, THE RETIRED ENLISTED
ASSOCIATION

Mr. Olanoff. Good morning, Mr. Chairman. I know that the
time is short. We have submitted our statement and hopefully
you and your staff will have time to read it. But I do want to
thank you, and I am sure you remember from the last couple
years of us coming here, and many of us are back, about the
promise. Well, I am sure you are aware that we worked with
Senator Warner, with the authorizing committee, and you know
the TRICARE for Life happened and the senior pharmacy benefit
happened and this committee funded it, and I would like to
thank you and your ranking member Senator Inouye for all your
help.
I am sure you are aware there still are some shortfalls in
military health care, but I think that they are going to be
addressed and I think that there is going to be a supplemental
that you are going to consider later.
However, I want to bring up two issues for this year for
the committee to really look at and consider. One of the
previous speakers mentioned the fact about the promise of
retired pay, and this is another issue that we realize that we
have to go back to Senator Warner and the Armed Services
Committee authorizers to get authorization for you to fund it.
However, I would like you to know that Senate Bill 170, a
bipartisan bill introduced by Senator Reid, 10 members of this
subcommittee are co-sponsors, 16 of the full committee,
Appropriations Committee, are co-sponsors, and a total of 59 of
your colleagues are co-sponsors of this bill.
So there is a lot of momentum to restore the retired pay.
This is an injustice that has been going on for many, many
years, and we have had large bipartisan success in the House.
Now we have the success in the Senate and we are hopeful this
year that the Armed Services Committee will report a bill out
to you so you can fund the restoration of retired pay so our
retired military veterans do not have to pay for their own VA
disability.
Mr. Chairman, the other issue is the survivor benefits
plan. I do not know how familiar you are with this, but there
are a couple of bills out there, one by Senator Thurmond and
one by Senator Smith. Basically, the problem with this is that
widows who thought that they were going to get a 55 percent
survivor benefit when their spouses passed away, they find out
after the fact that this benefit is lowered from 55 percent to
35 percent, and the two bills ask for an increase to get them
back up to 55 percent. One bill would do it over a phase-in
period over about 6 or 7 years. Senator Smith's bill would
implement it immediately.
So those are the two big issues for us this year. Again,
Mr. Chairman, we really thank you for what you have done over
the last few years and we look forward to working with you in
the future. Thank you.
[The statement follows:]

PREPARED STATEMENT OF MARK H. OLANOFF

The Retired Enlisted Association (TREA) would like to thank the
chairman and distinguished members of the Senate Defense Appropriations
subcommittee for the opportunity to come before you to discuss funding
issues as it relates to our members needs. TREA commends the Chairman
for his help with the funding of the Defense Health Program and the new
provisions of TRICARE for Life. We are sure that the chairman remembers
the discussion of last year and his challenge to us in working with the
Armed Services Committee to determine the promises of healthcare for
military retirees. Again, we salute you for the fine effort.

HEALTHCARE

TRICARE
In order to ensure the viability of TRICARE for all eligible
beneficiaries to the program, it is necessary that TRICARE funding
reflect the number of beneficiaries eligible for military health
benefits, not just the ever-declining number of people able to use the
military system the previous year.
TRICARE Standard (CHAMPUS) reimbursement levels are still much too
low to attract quality health care providers. There are also
unreasonable delays in reimbursement for TRICARE Standard (CHAMPUS)
claims. Members have reported that in the more rural areas, and even
some urban areas, where providers do not depend on a military patient
base, health care providers have become increasingly unwilling to
accept TRICARE Standard (CHAMPUS) patients at all. TREA feels that de-
linking the CMAC (CHAMPUS maximum allowable charge) from the Medicare
Schedule and authorizing higher payments to providers as necessary will
improve access to quality care for our beneficiaries. The Fiscal Year
2000 Defense Authorization Act gave the Secretary of Defense the
authority to go over the current CMAC rates to bring in providers into
TRICARE networks, but TREA still sees this being implemented.
The current claims processing system for TRICARE needs to be
revamped in order to reduce the hassles of claims payment for
physicians and beneficiaries. The beneficiaries end up getting caught
in the middle when they receive collection notices from their
creditors, even after they were told the TRICARE subcontractor would
pay the claim. The Fiscal Year 2000 Defense Authorization Act moved to
allow TRICARE contractors to use electronic processing for claims and
streamlining the information flow, this being two pieces of the claims
puzzle to be fixed. DOD has the authority to bring the claims system to
``the best industry standard'', and TREA understands that DOD is
currently working to implement improvements effective October 2002. As
stated in a December 11, 2000 TriCare press release, ``the TriCare
Management Activity (TMA), DOD's designee for evaluating the new rule,
has formed a group of experts from its staff and uniformed services
into an Integrated Program Team (IPT). The IPT is currently studying
how best to apply these standards to the eight administrative
transactions used routinely in health care administration, including
claims processing.'' TREA appreciates this effort and requests that
this committee continues to stay abreast to this work in progress.
As we review the TRICARE program, the issues of low reimbursement
rates and claims processing continue to be a disincentive for providers
to sign up with a Prime network or to be a provider to accept TRICARE
Standard. We will continue to work with this committee to address these
issues, as well as the shortfalls in the overall TRICARE program too.

TRICARE for Life (TFL)
TRICARE for Life is part of the Fiscal Year 2001 National Defense
Authorization Act (NDAA) to be effective October 1, 2001. We applaud
the President and the Congress (Budget Resolution) for including the
additional $3.9 billion needed to fund TFL for fiscal year 2002 and we
now ask that this subcommittee appropriate the money.
TRICARE Standard Improvements
TRICARE Standard, the fee-for-service option, needs improvement to
at least equal the quality and standard of care as provided under the
Federal Employee Health Benefits Program (FEHBP) standard fee-for-
service by:
--Eliminating the need for Non-availability statements (NAS) from
military treatment facilities and clinics and completely
eliminate the requirement for pre-authorization.
--Eliminating the 115 percent billing limit when TRICARE Standard is
second payer to other health insurance.

Lowered Catastrophic Caps Funding
Additional funding is required to cover the lowered catastrophic
caps for TriCare users. Fiscal Year 2001 DOD Defense Authorization Act
lowered the cap from $7,500 to $3,000 but there is currently no funding
to pay for it. DOD's request that TriCare participants keep the
documentation, ask their carriers to wait until DOD pays them is
unfortunate. The lowered cap is law and TREA requests that it be
funded.

Medicare Part B Waiver for Military Retiree 65+
The recently passed TFL requires the participant to be on Medicare
Part B. Most retirees who settled near a military treatment facility
(MTF) were counseled by MTF advisors not to enroll in Part ``B''
because the MTF would provide their free health care. These retirees
should not be punished with late enrollment fees due to the fact that
the local MTF has closed. TREA is requesting that this committee will
work with your colleagues to help authorize and then appropriate the
waiver of the penalty for not enrolling in Medicare Part ``B'' for
Medicare-eligible military retirees.
TREA believes that this small investment will enable retirees to
enroll in health care programs, which require Medicare Part B for
eligibility such as, and most importantly, TriCare-for-Life, as well as
TriCare Senior Prime, and the Fee-for-Service Option plans in FEHBP.
Currently, we have military retirees that either are paying a high
penalty for Medicare Part B, or just cannot enroll because it is too
costly. We realize that the authorizing committee must provide
legislative relief, however, we ask for this committee to support this
effort.

Other Personnel issues:
Survivor benefits
TREA members as well as all military retirees who have invested in
the Department of Defense sponsored Survivor Benefit Plan (SBP), are
frustrated by the offset faced by survivors of military retirees once
they reach the age of 62. Currently, a survivor of a military retiree
would receive 55 percent of a military retirees retirement pay per
month, if the retiree opted for full SBP. However, that amount will be
reduced to 35 percent once the survivor becomes eligible for Social
Security, regardless of whether or not they have earned Social Security
from their own work experience or not. With the average enlisted
retiree earning $16,000 per year, a Social Security-eligible survivor
is left with only $6,600 in income from their spouses' military
service.
TREA, along with several other military retiree organizations, has
worked closely with several members of Congress recently to eliminate
this offset. Last year, the Senate included legislation, outlined in S.
145 sponsored by Senator Thurmond, which would increase the amount a
survivor receives from the current 35 percent to 45 percent over a
five-year period. TREA strongly endorsed this language and was very
disappointed when it was not included in the Fiscal Year 2001 National
Defense Authorization Act Conference Report.
We are currently working with members of both the House and Senate
Armed Services Committees to include legislation eliminating the Social
Security off-set, as defined in S. 305 by Senator Smith of New
Hampshire. It is our hope that, finally, it will be included in the
Conference Report of the National Defense Authorization Act. We request
that this committee appropriate the resources to implement it.
Another issue of concern regarding SBP is the implementation of the
paid-up SBP program. Slated to begin in 2008, this program will allow
those retirees who have been paying into SBP for 30 years and have
reached the age of 70 to cease making payments but still keep their
spouses covered. While we applaud this program, it is TREA's desire to
move the start date up to 2002, as was called for in the original bill.
As the program is currently set up, those retirees who enrolled in SBP
when the program started in 1972 will pay far more than 30 years. We
are currently working with members of Congress to have the paid-up
program begin as early as possible. However, this committee would again
have to appropriate the necessary dollars to implement it.

Concurrent receipt
TREA would like to thank the members of this Committee who
appropriated the necessary funding last year to expand the special pay
program for the most severely disabled military retirees. This payment,
which provides certain military retirees rated 70 percent disabled or
higher by the Department of Veterans Affairs (VA) with a special pay
ranging from $100 to $300, will be of great assistance to these
disabled veterans.
TREA is grateful for this small step in addressing the fact that
military retirees are the only class of federal retirees who have their
retirement pay reduced when they receive VA disability compensation.
The legislation passed last year only addresses a fraction of disabled
retirees whose income is reduced because of their disability. We look
forward to working with the members of this committee, as well as of
the Armed Services Committee, to expand the number of retirees who can
receive this special pay. Currently, disabled retirees who have served
twenty years and those retirees who retired under early retirement
legislation at the 15-year point are not eligible for this payment.
Certainly, their inclusion is a matter of fairness and we look forward
to quickly addressing this inequity.
The ultimate goal in this issue, as defined in S. 170, sponsored by
Senator Reid, is complete concurrent receipt of military retirement pay
and VA disability compensation.
Mr. Chairman, 56 of your colleagues in the U.S. Senate are now co-
sponsors of S. 170 including 10 on this subcommittee and a total of 16
on the full Appropriations Committee which also includes your ranking
member, Sen. Inouye and we ask for your consideration in this matter.

Senator Stevens. Thank you. I will say, however, that the
amount of funding we have got now for retired persons is over 6
percent of the budget. If we grant your request it will be over
10 percent of the budget for defense. We did not use to take
retired benefits out of the current year funding for the
Department of Defense. That is going to grow as the years go on
and I think we will all have to think about how to do that.
We ought to be looking to a system which funds retirement
on an annual basis, as we do the civil service. But we have not
done that. I commend to you the thought of trying to figure out
how to do it.
When that reaches more than 10 percent a year, it will mean
that we will be putting more money into those people who have
served in the past than we are in training the people who are
coming in. That is self-defeating. So I think we have to find a
new system.
Thank you very much.
Mr. Olanoff. Thank you, Mr. Chairman.
Senator Stevens. They tell me I must go now. We will try to
get back. Thank you very much.
Senator Inouye [presiding]. The chair recognizes Dr.
William Nelson, the Association for the Cure of Cancer of the
Prostate. Dr. Nelson will be accompanied by Dr. Richard Atkins.

STATEMENT OF WILLIAM G. NELSON, Ph.D., ASSOCIATION FOR
THE CURE OF CANCER OF THE PROSTATE
ACCOMPANIED BY RICHARD N. ATKINS, M.D., NATIONAL PROSTATE CANCER
COALITION

Dr. Atkins. Mr. Chairman, on behalf of CAPCURE and the
National Prostate Cancer Coalition, I am delighted to introduce
Dr. Bill Nelson from Johns Hopkins, one of the country's
outstanding young biomedical researchers.
Dr. Nelson. Thank you, and thank you very much, Mr.
Chairman. I am a cancer research scientist and clinical
investigator at Johns Hopkins and I have dedicated my life to
searching for new opportunities to beat prostate cancer. I am
here today to speak in support of the invaluable contributions
that are now made each year by the Department of Defense
prostate cancer research programs. To that end, I would like to
ask your committee to provide $135 million to support the
Congressionally Directed Medical Research Program (CDMRP), in
prostate cancer for the fiscal year 2002, and also ask that you
maintain sufficient funding to support the intramural prostate
cancer research program at the Walter Reed Army Hospital.
I know that you, Mr. Chairman, and all the members of your
committee share my concern that prostate cancer has become the
most commonly diagnosed non-skin cancer for men in the United
States. This year more than 198,000 men, or three times the
number of casualties in the 10 years of the Vietnam War, will
learn that they have prostate cancer. Nearly 32,000 men, or the
size of an entire corps of the United States Army, will lose
their lives to prostate cancer, making prostate cancer the
second most common cause of cancer death among men.
Why do we need a national investment? This country's
investment in all of cancer research pales in comparison to the
dark and devastating specter of cancer, in that less than one-
thirtieth of what we spent on cancer care goes to research to
find new treatments. Just this month, the opportunities are
really arising. Just this month, we have marveled at the
appearance of a new drug called Glivak, a Novartis
Pharmaceutical pill that treats chronic myelogenous leukemia
that was developed by a colleague of mine, Dr. Brian Druker, at
the University of Oregon. That disease, once inevitably fatal,
may be curable in as many as 90 percent of the patients who
suffer from it.
Now, remarkably, this discovery was made and translated to
the clinic in less than a decade and, although we know that not
every miracle for cancer patients is going to move as quickly,
I believe that if we made a greater national investment in such
discoveries we could accelerate progress greatly.
Why the military? Prostate cancer poses a grave risk to our
men in uniform and, while we do not know the full impact of
prostate cancer on our military service, we can posit some
estimates. Eighty-five percent of active and reserve uniformed
service personnel are men, constituting about two million
individuals. If their prostate cancer risks are the average
expected, that means that more than 300,000 military men will
be diagnosed with prostate cancer during their lifetimes.
But the economic and social impact of the disease does not
stop there. There are more than eight million people in the
Department of Defense health network worldwide. The cost of
prostate cancer in terms of direct health care expenditures and
human capital over time could be enormous.
Why is the Department of Defense program the right program
for prostate cancer research? The CDMRP prostate cancer program
is the only program that focuses specifically on prostate
cancer, and there are four features of this funding strategy
that I would like to comment on.
First, the funding strategy adopted by the CDMRP is both
innovative and effective. An example are the idea development
awards initiatives, which provide funding to stimulate venture
research, recognizing and rewarding speculative but promising
ideas. These projects often do not qualify for funds from other
Federal sources because of an abundance of proof of principle
evidence is usually required before those funds are awarded.
However, since these ideas are at the cutting edge of research
they often bring us the greatest returns. It is worth noting
that Dr. Druker has said that he did not get his first three or
four research grants.
The second point, the CDMRP is committed to correcting the
unequal burden of prostate cancer on America's African American
men and their families through its health disparity awards. It
is providing funds for research and training to help solve this
problem and it is offering collaborative research grants to
historically black colleges and universities.
Third, the CDMRP is committed to accelerating clinical
trials. Fiscal year 2001 marks the first time they have had
sufficient funding to support clinical research. However, we
believe that the potential impact is echoed by the successes of
the CDMRP program for breast cancer research, which hastened
the development of Herseptin, an important tool in breast
cancer treatment.
Finally and perhaps most important, the CDMRP is committed
to developing new prostate cancer research consortia and it
needs more funding to pull this off. The CDMRP research
development consortia awards bring together researchers from
two or more institutions to collaborate on research focusing on
a common theme. It is widely regarded that the establishment of
centers of research excellence of this sort that balance
research collaboration and competition is the best way to beat
the disease. That is also one way the DOD efforts can synergize
with the efforts at the National Cancer Institute.
In conclusion, the CDMRP is an important source of research
funding for prostate cancer. Over the past few years, the
growing commitment of Federal funds that Congress has
appropriated to beat prostate cancer and other serious cancers
has begun to make a difference. But I believe we can do more,
we must do more, and with the right investments I am confident
that we can and will beat prostate cancer.
So on behalf of the millions of American men and their
family members whose lives have been touched and all too often
devastated by prostate cancer, I thank you for your continuing
commitment to eradicate it. Thank you very much, Mr. Chairman.
[The statement follows:]

PREPARED STATEMENT OF WILLIAM G. NELSON, PH.D.

INTRODUCTION

Mr. Chairman, my name is Bill Nelson. I am Associate Professor of
Urology, Oncology, Pharmacology, Medicine and Environmental Health
Sciences at Johns Hopkins University and to my left is Dr. Richard
Atkins, the Vice Chairman and Chief Operating Officer of the National
Prostate Cancer Coalition. We are pleased to appear before you on
behalf of both of our organizations and thank you for your time and
commitment to the issues that surround prostate cancer.
As a research scientist and clinical investigator, I spend my life
searching for new opportunities to beat prostate cancer, and I am here
to support the incalculable contributions that are now made annually by
the Department of Defense prostate cancer research programs. They must
continue, and they must grow. To that end, I ask your committee to
provide $135 million for the Congressionally Directed Medical Research
Program (CDMRP) in prostate cancer in fiscal year 2002. On behalf of
the National Prostate Cancer Coalition and CaP CURE, I also ask that
you maintain sufficient funding for the intramural prostate cancer
research program at Walter Reed Army Hospital.
I know that you, Mr. Chairman, and members of this committee share
my concern that prostate cancer remains the most commonly diagnosed
nonskin cancer in America. More than 198,000 men will learn that they
have the disease in 2001. Nearly 32,000 men will lose their lives to
prostate cancer this year, making it the second most common cause of
cancer death among men. Those statistics translate into devastating
realities for men and families across this country.

AFFECTING THE NATION'S ECONOMY

Prostate cancer will affect one in six men in the United States
during his lifetime. More than 25 percent of those battling this
disease are under the age of 65, prime years of productivity for
families and for this nation. As baby boomers continue to pass the
threshold of age 50, the number of Americans impacted by cancer--and
prostate cancer--is expected to grow. If unchecked during the next
decade, cancer incidence and mortality rates could increase by 25
percent to 30 percent. Cancer already costs this nation more than $110
billion a year, a figure that might exceed $200 billion annually by
2010.

MAKING A NATIONAL INVESTMENT

The country's investment in cancer research pales in comparison:
less than about one-thirtieth of what we spend on cancer care goes into
research to find new treatments. This month, we celebrated the historic
arrival of a drug called Gleevec, Novartis Pharmaceuticals' landmark
new treatment for chronic myelogenous leukemia. That disease,
inevitably fatal, may now be curable for more than 90 percent of
patients who suffer from it. Gleevec began as a dream in the laboratory
of my fellow medical oncologist, Brian Druker. How much time did it
take to translate Brian's dream into a reality for thousands of
patients? Less than a decade. Not every miracle for cancer patients is
going to occur as quickly, but many could if there were a greater
national investment in such discoveries.
During the past decade, about five cents of every federal cancer
research dollar has been directed to prostate cancer, a
disproportionate sum for a disease that has accounted for about 15
percent of all new cancer cases and 15 percent of male cancer deaths.
Congress is beginning to correct that inequity, and I thank you for it.
But, we must do more.

DESTROYING AFRICAN AMERICAN FAMILIES

We must do more because prostate cancer unequally impacts America's
African American families. Prostate cancer incidence rates are 35
percent to 50 percent greater in African American men than among white
males, and death rates are twice as high.

DETECTING THE GENETIC LINK

We must do more because prostate cancer unequally impacts men who
have close relatives with the disease. If a man has one close relative
with prostate cancer, his risk of the disease is double. With two close
relatives, his risk is fivefold. Should he have three close relatives,
his likelihood of a prostate cancer diagnosis is nearly certain.

PROTECTING MEN IN THE MILITARY

We must do more because prostate cancer also poses a risk to our
men in uniform. While we don't know the full impact of prostate cancer
on our military service, we can posit some estimates. About 85 percent
of active and reserve uniformed service members are male, about two
million individuals. If their risks are only average expectable, that
means that more than 300,000 men will be diagnosed with prostate cancer
during their lifetimes. But the economic and social ramifications on
the Department of Defense don't stop there. There are more than eight
million people in the defense health network worldwide. The cost of
human and fiscal capital, over time, could be enormous. That's one
compelling reason to encourage the CDMRP program in prostate cancer to
thrive.

EXPANDING RESEARCH DEVELOPMENT

The CDMRP program must thrive because it is also unique. Providing
$135 million to the program in fiscal year 2002 expands its special
contributions to research idea development, remedies health
disparities, provides for research consortium development and enhances
clinical trials--along with funds to support postdoctoral trainees and
young investigators.

MAKING ORGAN SITE SPECIFIC RESEARCH WORK

Within the research resources of the federal government, the CDMRP
prostate cancer program is the only one that is organ site specific. I
can personally attest to the impact the program has had. Since its
inception in 1997, CDMRP has made fourteen research awards at Johns
Hopkins, more than $4.2 million, in most of its designated categories.
As they are at other institutions, these awards are non-duplicative of
other funding sources.
First, CDMRP is committed to innovation through its ``Idea
Development Awards.'' These awards stimulate ``venture research,''
projects that reward often speculative but promising ideas. In general,
these projects would not qualify for grants from other federal
resources, wherein demonstration of ``proof of principle'' is generally
required. Since these ideas are good, but speculative, they often
forecast great returns on the investment made. At Hopkins, for example,
one Idea Development awardee is studying potential drug targeting on a
specific enzyme affecting prostate cancer cells. This methodology is
similar to the one that led to a great payoff in Brian Druker's
laboratory for leukemia.
CDMRP is committed to correct the unequal burden of prostate cancer
on America's African American families through its ``Health Disparity
Awards.'' It is providing funds for research and training to help solve
the problem, and it is offering collaborative research grants to
Historically Black Colleges and Universities (HBCU), so that, in
partnership with other universities and medical centers, prostate
cancer research opportunities at minority institutions are
strengthened. At Hopkins, colleagues are searching for biomarkers that
isolate aggressive prostate cancer in African American men, developing
survey measures targeting inner-city African American men and studying
the potential role of African American churches in prostate cancer
prevention.
CDMRP is committed to accelerate clinical trials. Fiscal year 2001
is the first time that CDMRP has received sufficient funding in
prostate cancer to support clinical research. But the potential impact
is echoed by the successes of the sister CDMRP program for breast
cancer research, which uniquely hastened the availability of Herceptin,
a drug targeted to impact the specific expression of a protein in
breast cancer cells. The April 1998 business plan submitted by CDMRP to
Congress indicates that, at the then forecasted full funding level of
$200 million, the prostate cancer research program could engage in
significant support for clinical trials. An appropriation of $135
million next year will energize that effort.
Perhaps most important, CDMRP is committed to develop new prostate
cancer research consortia, and it needs more funding to make these
opportunities thrive. The CDMRP consortium development awards bring
researchers together from two or more institutions to collaborate on
research that engages a common theme. Why is this important? It is
widely recognized that the establishment of centers of research
excellence hasten efforts to beat any serious disease. These awards
start the process through the creation of ``virtual centers of
excellence,'' and they may well pave the way for any single institution
to receive a SPORE (special program of research excellence) grant from
the National Cancer Institute (NCI) in future years. That's one
significant way that research support at DOD and research support at
NCI synergize a common aim.
Finally, CDMRP fills another important niche in this nation's
research efforts to find new treatments for prostate cancer. It has
become an important contributor to the market forces governing prostate
cancer research. Those of us who enter this field frequently come into
it with significant debt accrued from the expensive years of medical
training. To stay in prostate cancer research, access to research
funding is crucial. My first three attempts to secure funding from the
National Institutes of Health (NIH) failed, but there were no
alternative resources at the time.

CONCLUSION

CDMRP is one important alternative resource. While maintaining high
standards of peer review, its application process is far less
cumbersome than that of other federal agencies. Its focus on breeding
young investigators and nourishing creative ideas is singular. A good
friend, Jonathan Simons, and a former colleague at Johns Hopkins, is
now director of the Winship Cancer Institute of Emory University in
Atlanta. When Jonathan was considering prostate cancer research as a
vocation, his friends outside the field told him he would be committing
``professional suicide.'' Funds weren't there to sustain a career.
The CDMRP program has begun to change that. Indeed, Congress's
growing commitment of federal funds to beat this disease is making a
big difference. While prostate cancer may not yet be an all-alluring
field of dreams among biomedical research opportunities, its growth is
forecasting great new developments. With the right investments, we
can--and we will--beat prostate cancer.
On behalf of the millions of American men and family members whose
lives have been touched--and too often devastated--by this disease, I
thank you for your continuing commitment to eradicate it.
Thank you, Mr. Chairman and members of the committee.

Senator Inouye. Doctor, you can be assured that we will do
our best.
Dr. Nelson. Thank you.
Senator Inouye. Thank you very much.
Now may I call upon Dr. Rogene Henderson, Lovelace
Respiratory Research Institute. Dr. Henderson.

STATEMENT OF ROGENE F. HENDERSON, Ph.D., LOVELACE
RESPIRATORY RESEARCH INSTITUTE
Dr. Henderson. Thank you for allowing me to speak to you
today about a problem shared by defense agencies as well as
other government agencies and industry. I am speaking of the
problem of determining how complex mixtures of air pollutants
contribute to health effects. Defense agencies are attempting
to understand and deal with exposures of military personnel and
civilians to mixtures of airborne hazardous materials
encountered in training and military operations.
At the present time we do not know how to deal with
mixtures of pollutants very well. Research and regulation have
focused on single air contaminants or classes of contaminants.
Little effort has been spent to understand the effects of
pollutants as we actually breathe them, that is in complex
mixtures.
Let me give examples of pollutant mixtures of concern to
the military. All services are concerned about emissions from
engines used to propel vehicles. The Army alone operates the
Nation's largest fleet of diesel-powered on-road and off-road
vehicles, including the Nation's largest truck fleet. The Navy,
through its Naval Sea Systems Command, is concerned with diesel
emissions from vessels, as is the Coast Guard. The Air Force
and other services are concerned with emissions of traces of
toxic materials from heaters, paints, and solvents, and even
chemical warfare agents.
In 1998 Congress initiated a multi-agency government-
industry program, the National Environmental Respiratory
Center, specifically to attack this problem. The center is
based at our institute, but also involves researchers at other
laboratories. The effort is supported by Environmental
Protection Agency (EPA), Department of Energy (DOE), Department
of Transportation (DOT), one State, five trade associations,
and 11 individual corporations.
We are developing new information comparing the composition
of specific mixtures with their induced health effects through
identically designed laboratory studies. These mixtures include
diesel and gasoline engine emissions, wood smoke, cooking
fumes, tobacco smoke, road dust, and coal combustion emissions.
Over 400 components of the mixtures and 200 health effects are
being measured.
This database will allow statistical analyses that will
point towards the components and their combinations that are
associated with different health effects. Beyond this program,
our institute offers additional resources that have been used
by the DOD during recent years to study issues such as
detecting airborne chemical-biological hazards, the composition
of emissions from heaters in field tents, the long-term effects
of retained depleted uranium fragments, and the long-term
effects of inhaling small amounts of the nerve gas sarin.
We are discussing several additional projects with the
military. For example, we observed that a month after an
exposure to a level of sarin that caused no measurable
immediate effects in rats, neuroreceptors in the hippocampus of
the brain were altered. This is the region of the brain
associated with memory. We also observed a depression in the
activity of cells in the immune system. These findings warrant
follow-up to determine the long-term implications and the level
of exposure to cause these effects.
We are also focusing on acute respiratory distress syndrome
(ARDS), a rapidly developed accumulation of fluid in the lungs
that accompanies shock and injury. ARDS is responsible for many
deaths of wounded personnel, who survive to leave the
battlefield but later die.
Mr. Chairman, we seek the encouragement of this committee
for the Department of Defense through the Army to establish a
cooperative agreement with the Lovelace Respiratory Research
Institute to participate in the National Environmental
Respiratory Center and other military-related research at
Lovelace in an ongoing, iterative working relationship with the
agency.
Thank you.
[The statement follows:]

PREPARED STATEMENT OF ROGENE F. HENDERSON, PH.D.

Thank you for allowing me to draw your attention to a problem
shared by several Defense agencies. I'm speaking of the so-called
``mixture'' problem, a simple name for the difficulty of determining
how individual air contaminants contribute to the health effects of
exposure to complex mixtures of air contaminants. Defense agencies are
attempting to understand and deal with exposures of military personnel
and civilians to traces of airborne hazardous materials encountered
together with other exposures in training and military operations. This
is something that we can't do well at the present time.
Let me give an example. All services are concerned about emissions
from propulsion systems for vehicles. The Army alone operates the
nation's largest fleet of diesel-powered on-road and off-road vehicles,
including the nation's largest truck fleet. This is why its Tank-
Automotive and Armaments Command (TACOM) is a major partner with other
agencies and industry in the 21st Century Truck Program, in part to
identify and reduce the most hazardous components of diesel emissions.
The Navy, through its Naval Sea Systems Command, is concerned with
diesel emissions from vessels, as is the Coast Guard. The Air Force and
the other services are concerned with aircraft emissions. All services
have concerns for exposure to traces of other airborne toxic materials
ranging from heater emissions, to paints and solvents, to chemical
warfare agents.
These issues have a common root problem: our poor understanding of
the health hazards presented by individual components of complex
mixtures of air contaminants. This issue also plagues other federal
agencies, state and local governments, and industry. Research has
focused on single air contaminants, classes of contaminants, or source
emissions one at a time. Little effort has been spent to understand the
effects of traces of pollutants as they are actually breathed in
complex mixtures. We have poor ability to determine which contaminants
or combinations of contaminants cause which health effects and what
levels are hazardous. This problem is not new, but it has been
sidestepped because of its daunting complexity. We can't possibly study
every combination of air contaminants!
A multi-agency, government-industry program, the National
Environmental Respiratory Center, was initiated by Congress
specifically to attack this problem. Based at our Institute but also
involving researchers at other laboratories, this effort is supported
by EPA, DOE, DOT, one state, five trade associations, and 11 individual
corporations.
We are developing new information on mixture composition vs. health
by identically designed laboratory studies of several complex mixtures,
including diesel and gasoline engine emissions, wood smoke, cooking
fumes, tobacco smoke, road dust, and coal combustion emissions. Over
400 composition variables and 200 health variables are being measured.
This database will support the kind of statistical analyses that will
point toward the components and their combinations that are associated
with different health effects in a way that is impossible using data
from past laboratory and epidemiological studies. This strategy will
require approximately $6 million/year for 6 years to complete--a large
sum, but not so large if spread across the stakeholders.
Beyond this program, our Institute offers resources that have been
accessed by DOD during recent years to study issues such as detecting
airborne chemical/biological hazards, the composition of emissions from
heaters in field tents, the long-term effects of retained depleted
uranium fragments, and the long-term effects of inhaling small traces
of the nerve agent Sarin. We are discussing additional projects. For
example, we observed that a month after an exposure to Sarin that
caused no measurable immediate effects, neural receptors in the brain
hippocampus were altered. This is the brain region associated with
memory. We also observed a depression of cells in the immune system.
These findings warrant follow-up to determine long-term implications
and the level of exposure required to cause the effects. We are also
focusing on the ``acute respiratory distress syndrome'', a rapidly-
developing accumulation of fluid in the lung that often accompanies
shock and injury, and is responsible for many deaths of battlefield
wounded that survive to leave the battlefield, but die later.
Mr. Chairman, we seek the encouragement of this Committee for the
Department of Defense, through the Army to establish a cooperative
agreement with the Lovelace Respiratory Research Institute to
participate in the National Environmental Respiratory Center, and other
research, in an ongoing, iterative working relationship with the
Agency.
Thank you.

Senator Inouye. Thank you very much, doctor. Where is
Lovelace located?
Dr. Henderson. It is in Albuquerque, New Mexico, on
Kirtland Air Force Base.
Senator Inouye. Thank you very much.
Now may I call upon Martin B. Foil, National Brain Injury
Research Treatment and Training Foundation. Mr. Foil.

STATEMENT OF MARTIN B. FOIL, JR., NATIONAL BRAIN INJURY
RESEARCH, TREATMENT AND TRAINING FOUNDATION

Mr. Foil. Good morning, Senator Inouye. It is nice to see
you again, sir. I appreciate your allowing me to be here.
My name is Martin Foil. I am the father of a man with a
severe brain injury. I sit on the boards of the National Brain
Injury Research, Treatment and Training Foundation and on the
John Jane Brain Injury Center. I am the immediate Past Chairman
of the International Brain Injury Association (BIA) and for
many years served as Chairman of the BIA here in the United
States.
On behalf of my son and the thousands of military personnel
that receive brain injury treatment and services annually, I
respectfully request that $5 million be added to the DOD's
health affairs budget for the operation and maintenance for the
defense and veterans head injury program. This would be in
addition to the $7 million already in the budget, thus a total
of $12 million.
Good morning, Mr. Chairman.
Senator Stevens [presiding]. Good morning, sir.
Mr. Foil. A total of $12 million for the fiscal year 2002.
Brain injury is a major national problem that
disproportionately affects the Nation's young service men and
women. It is the leading cause of death and disability in young
Americans. Approximately one and a half to two million injuries
occur each year. Ninety thousand injuries lead to long-term and
severe disability. Males from the ages of 14 to 24 have the
highest incidence.
Under the leadership of Defense Secretary Cheney, the
Defense and Veterans Head Injury Program (DVHIP) was
established when it became apparent after the Gulf War that
there was no overall systematic program for providing brain
injury-specific care and rehabilitation within the DOD and the
Department of Veterans Affairs (DVA), and as a result our
service men and women now receive brain injury care and
rehabilitation second to none in the world.
The DVHIP is a significant contribution to the health of
the United States military and veteran populations. It is a
component of the defense military health system, providing
direct care at military treatment facilities and veterans
hospitals throughout the Nation.
While there is a research component to the program, the
primary purpose is to provide state of the art medical care to
personnel sustaining concussions and more severe brain injury
while on active duty. The purpose is to get them back to work
or to appropriate rehabilitation as soon as possible.
This program strengthens our Nation's military readiness by
helping service members get appropriate care and return to
duty. Combat readiness requires spilt-second decisions to be
made as to whether a soldier is capable of returning to his
post. Assessing the extent of the injury and functional
capacity of the injured military personnel is critical,
especially in the use of sophisticated weapons systems. Just as
important, if not more important, our treatments help determine
which injured personnel are not capable of returning to their
post.
I am pleased to report that through the DVHIP the DOD
realizes significant savings in medical and retirement costs.
The cost of a brain injury in a young adult may cost $4 million
over a lifetime. I have expended more than that on my son. DOD
saves millions if only three service men are treated by this
program.
I respectfully request your support for the $5 million in
the DOD appropriations bill under health affairs for operation
and maintenance, for a total of $12 million for fiscal year
2002. We are always grateful for your support for the project
over the years and hope you will again support our efforts to
provide the best care possible for our Nation's men and women
in uniform. I will answer any questions.
[The statement follows:]

PREPARED STATEMENT OF MARTIN B. FOIL, JR.

Dear Chairman Stevens and Members of the Senate Appropriations
Subcommittee on Defense: My name is Martin B. Foil, Jr. and I am the
father of Philip Foil, a young man with a severe brain injury. I serve
on the Board of Directors of the National Brain Injury Research,
Treatment and Training Foundation (NBIRTT) \1\ and the John Jane Brain
Injury Center (JJBIC).\2\ I am the immediate past Chairman of the
International Brain Injury Association \3\ (IBIA) and also previously
served as Chairman of the national Brain Injury Association (BIA).\4\
Professionally, I am the Chief Executive Officer and Chairman of
Tuscarora Yarns in Mt. Pleasant, North Carolina.\5\
---------------------------------------------------------------------------
\1\ NBIRTT is a non-profit national foundation dedicated to the
support of clinical research, treatment and training. It coordinates
the non-governmental programs of the Defense and Veterans Head Injury
Program.
\2\ JJBIC in Charlottesville, Virginia, provides brain injury
rehabilitation to military retirees, veterans and civilians through an
innovative and cost effective day treatment program.
\3\ IBIA is a non-profit organization that represents medical and
clinical professionals as well as persons with brain injury and family
members dedicated to improving treatment and rehabilitation for persons
with brain injury throughout the world.
\4\ BIA is a national, non-profit organization dedicated to serving
persons with brain injury, their families and caregivers in all 50
states and the territories.
\5\ I receive no compensation from this program. Rather, I have
raised and contributed millions of dollars to support the non-
governmental components of this program.
---------------------------------------------------------------------------
On behalf of the thousands of military personnel that receive brain
injury treatment and services annually, I respectfully request that $5
million be added to the Department of Defense (DOD) Health Affairs
budget for Operation and Maintenance for the Defense Brain and Spinal
Cord Injury Program (DBSCIP). This would be in addition to the $7
million provided in the Department of Defense's budget, thus DBSCIP
funding would total $12 million for fiscal year 2002.
I appreciate the opportunity to provide testimony regarding this
important program which is a collaborative effort among DOD, Veterans
Affairs (DVA), the Henry M. Jackson Foundation and NBIRTT. Last year,
the Uniformed Services University of the Health Sciences (USUHS)
changed the name of the Defense and Veterans Head Injury Program
(DVHIP) to DBSCIP to reflect the collaborative research on spinal cord
injury being done at the University. In addition, this year the
National Brain Injury Research Treatment and Training Foundation
(NBIRTT) has joined the effort to assist in coordinating the non-
governmental aspects of the program through the use of its Scientific
Advisory Board and to share some of its privately funded research
findings with the DBSCIP. This testimony only reflects the work on
brain injury through the DVHIP and its civilian partners, yet requests
full funding for the entire DBSCIP.

The Defense and Veterans Head Injury Program (DVHIP)
The DVHIP is a disease management system based on a ``learn as we
treat'' principle, that integrates clinical care and clinical follow-
up, with applied research, prevention, education and family support
information. The program was created after the Gulf War in 1991, when
it became apparent that there was no overall systemic program for
providing brain injury specific care and rehabilitation within DOD or
DVA. With the leadership of Defense Secretary Richard Cheney and the
Congress, the DVHIP was established, and as a result, our service men
and women now receive brain injury care and rehabilitation second to
none in the world.
In the U.S. military, there are over 7,000 peacetime TBI admissions
to DOD and DVA hospitals each year. In addition to the costs of acute
and long-term care, a conservatively estimated $30 million in obligated
medical retirement payments is added each year in the military alone.
DVHIP is a prime example of a dual use project that contributes
significantly to U.S. military readiness. The program not only treats
active duty military personnel who sustain brain injuries each year and
helps them return to duty, but the DVHIP serves as an important
resource to veterans and the civilian population as well. Nationwide,
there are some 1.5 million brain injuries per year, with an estimated
societal cost of over $48 billion per year, including direct care and
loss of productivity. There are now 5.3 million Americans living with
long term disability as a result of brain injury.

DVHIP and Military Readiness
An important goal of the DVHIP is to address basic questions
relating to active duty military personnel sustaining brain injuries,
including acute care and the combat casualty process, but the greatest
impact on readiness is the assessment of mild brain injury on combat
performance. The DVHIP has developed basic combat casualty care
protocols (including penetrating head injury) that can ensure
treatments for brain injury are available in the field.
The DVHIP is a program of integrated care combined with
translational research--the purpose is to use DVHIP research findings
on the battlefield. Combat readiness requires split second decisions to
be made as to whether a soldier is capable of returning to his post.
Assessing the extent of brain injury and functional capacity of injured
military personnel is critical, especially with the use of
sophisticated weapon systems.
The DVHIP maintains an extensive historical military TBI archive,
including WWI, WWII (Okinawa Campaign), Korean War, Vietnam War and
Gulf War TBI medical records. The Vietnam War data include paper and
computerized records of Phases I and II of the Vietnam Head Injury
Study (VHIS) that have led to numerous publications. The DVHIP also
includes a simple, updated Head and Spinal Combat Injury Registry form
similar to that used by the Vietnam Head Injury Study. The registry has
been approved by the Joint Committee of Military Neurosurgeons of the
American Association of Neurological Surgeons and Congress of
Neurological Surgeons and is ready for deployment in time of war. Early
identification of injured soldiers will not only assist in immediate
readiness efforts, but will facilitate long term management as well as
the study of TBI resulting from battlefield operations.

DVHIP Clinical Treatment, Research and Training
In addition to supporting and providing treatment, rehabilitation
and case management at each of the 7 primary DVHIP TBI centers,\6\ the
DVHIP includes a regional network of additional secondary veterans
hospitals capable of providing TBI rehabilitation, and linked to the
primary lead centers for training, referrals and consultation. This is
coordinated by a dedicated central DVA TBI coordinator and includes an
active TBI case manager training program. Highlights of the program
include:
---------------------------------------------------------------------------
\6\ Walter Reed Army Medical Center, Washington, DC; James A. Haley
Veterans Hospital, Tampa, FL; Naval Medical Center San Diego, San
Diego, CA; Minneapolis Veterans Affairs Medical Center, Minneapolis,
MN; Veterans Affairs Palo Alto Health Care System, Palo Alto, CA;
Hunter McGuire Veterans Affairs Medical Center, Richmond, VA; Wilford
Hall Medical Center, Lackland Air Force Base, TX.
---------------------------------------------------------------------------
--DVHIP maintains brain injury patient registries at each of the
primary and secondary centers. The registry now includes some
9,000 patients, over 1,600 of whom have been added in 2000. The
DVHIP registry includes mostly participants from DVHIP centers,
but is working to expand to the entire military and veterans
medical systems.
--A TBI treatment and referral algorithm was designed to assist
primary caregivers in the management and referral of their
patients with TBI. This now has been implemented at DVHIP sites
and disseminated throughout the DVA medical system.
--A broad education and referral network has been created which
includes providers from all branches of the military.

DVHIP's ``Learn as We Treat'' Site Projects
The combat training and sports TBI program identifies the impact of
mild TBI on military performance and develops treatments to minimize
its effects. Active programs are currently ongoing at Fort Bragg, North
Carolina; West Point U.S. Military Academy, New York; and Camp
Pendleton, California. The Fort Bragg program involves pre-injury
baseline testing of about 2,500 paratroopers and more extensive post-
injury evaluation of about 400 persons. Over 2,000 baseline evaluations
have been completed to date.
The site at Camp Pendleton incorporates a surveillance system for
concussive injury into an operational setting, provides continuous
education to primary medical providers, and has collected pilot data
using a screening battery on patients with Grade 3 concussive injuries.
The DVHIP program at Walter Reed Army Medical Center, using
telemedicine, conducted a briefing on TBI for all Army psychology
services worldwide.
A third randomized trial is ongoing at Wilford Hall Air Force
Medical Center focusing on military personnel with acute mild TBI. The
study will compare a program of counseling and rest on convalescent
leave plus graded return to work, versus counseling and graded return
to work alone. Primary outcome measure will be post-concussion symptoms
and work supervisor ratings.
The DVHIP site at the Naval Medical Center, San Diego provides
outpatient evaluations and case management services to TBI survivors
across the entire range of severity of injury.
The lead veterans' centers are conducting a randomized controlled
study comparing in-hospital cognitive therapy to in-hospital functional
rehabilitation for individuals with more severe TBI. The primary
outcome measures are return to work and level of independence at one
year post injury.
DVHIP has developed three neuroprotective trials for service men
and women with both severe and mild TBI. Focusing on combat training
injury in Marines at Camp Pendleton, these studies utilize safe and
inexpensive compounds--pyruvate and niacinamide--to protect energy
metabolism in the injured brain.
A TRICARE demonstration project providing specialized treatment
reimbursement and rehabilitation of military beneficiaries at four lead
veterans sites is being continued.
In June, 2000, the results of the WRAMC Randomized Controlled Trial
of Cognitive Rehabilitation were published in the Journal of the
American Medical Association. Participants in this study had a 90
percent return-to-work rate and 67 percent returned to active duty.

NBIRTT and Translational Research
The National Brain Injury Research Treatment and Training
Foundation is a great addition to the program. As a national foundation
dedicated to the support of clinical research, treatment and training,
it makes available the results of private sector research grants to
support DVHIP objectives. NBIRTT works closely with the Henry M.
Jackson Foundation and USUHS to coordinate the non-governmental
programs of the DVHIP (the work of JJBIC, IBIA and BIA). NBIRTT's
Scientific Advisory Board reviews the non-governmental partners'
activities to assure that all efforts are or can be militarily related
and consistent with the principles and goals of the DVHIP.
Many of the Foundation's Board Members have been personally
affected by brain injury, including Jim and Sarah Brady and Felicia and
Byron Rubin of Texas. The Rubin Family has contributed millions of
dollars toward research on brain injury and will continue to do so.
These resources enhance the work of the DVHIP and help assure that
federal funds are used primarily for treatment of military personnel
and veterans.

IBIA/JJBIC Collaboration with DVHIP
Unlike research projects funded by the National Institutes of
Health, DVHIP research is treatment oriented, showing immediate results
in the real world. IBIA and the John Jane Brain Injury Center in
Charlottesville, Virginia assists in the three major components of the
DVHIP: clinical treatment, clinical research and clinical training:
--IBIA/JJBIC/DVHIP supports research and treatment to address
neurobehavioral problems that affect return to work and fitness
for duty.
--The IBIA is sponsoring the development of evidence based practice
guidelines for the treatment of mild traumatic brain injury,
neuroimaging in brain injury, and pediatric brain injury, along
with practice guidelines development for neurobehavioral
problems and bowel and bladder dysfunction following brain
injury. These projects raise the standards of care worldwide.
--The John Jane Brain Injury Center is moving brain injury
rehabilitation into the 21st Century, using a groundbreaking
combination of modern computer technologies, virtual reality
approaches for assessing military personnel's ability to return
to work and other uses. This model stands to revolutionize
rehabilitation in military and civilian settings, allowing
clinicians to reach patients easily in remote locales,
providing treatment interventions around the clock, wherever
they are needed.
--IBIA/JJBIC/DVHIP conducts collaborative outcomes research utilizing
functional Magnetic Resonance Imaging (fMRI) to identify brain
lesion location and create diagnostic criteria for mild and
moderate brain injuries which are significant problems in the
military; this research is valuable to maintaining readiness by
discerning who is capable of returning to active duty.
--IBIA/JJBIC/DVHIP conducts studies on executive dysfunction and
decision-making in persons with mild TBI (mild TBI is the
single most important reason for failure to return to active
duty, work or school); this study complements efforts to
improve military readiness.
--Active duty military personnel have benefited from an intensive 15-
session treatment intervention for mild traumatic brain injury.
This program, which focuses on life-skill training and
cognitive prosthetics, has drastically shortened disability
times for the participants.

BIA Services--Information and Resources
The Brain Injury Association serves an important role in the
program by providing information and resources to any and all active
duty military personnel, retirees, veterans and family members seeking
assistance for brain injury treatment, placement, rehabilitation, and
general information. In particular, BIA does the following:
--BIA maintains a nationwide 1-800 help line, staffed by trained
specialists. The Information and Resources Department of BIA
acts as a clearinghouse of community service information and
resources for military personnel, veterans and civilians and
responds to tens of thousands of inquiries for assistance
through its free Family Help Line. Through BIA's state
affiliates, some 50,000 calls for assistance are answered each
year, and hundreds of thousands of informational brochures,
pamphlets, books, videos, and other material are distributed.
--BIA's Brain Injury Resource Center (BIRC), provides easy access to
a multi-media computer library through a touch-screen monitor
and program that allows users to learn about brain injury at a
personalized pace. The BIRC is available in over 60 locations
across the country, including 18 DOD and VA hospitals.\7\
---------------------------------------------------------------------------
\7\ Central Arkansas Veterans Health Care Network, North Little
Rock, AR; Darnall Army Community Hospital, Ft. Hood, TX; Denver
Veterans Affairs Medical Center, Denver, CO; Hines Veterans Affairs
Medical Center, Hines, IL; James A. Haley VA Medical Center, Tampa, FL;
Madigan Army Medical Center, Takoma, WA; Minneapolis VA Medical Center,
Minneapolis, MN; National Naval Medical Center, Bethesda, MD; Palo Alto
VA Medical Center, Palo Alto, CA; Portsmouth Naval Medical Center,
Portsmouth, VA; Richmond VA Medical Center, Richmond, VA; San Diego
Naval Medical Center, San Diego, CA; San Juan VA Hospital, San Juan,
Puerto Rico; Seattle Veterans Affairs Medical Center, Seattle, WA;
Tripler Army Medical Center, Hawaii; Walter Reed Army Medical Center,
Washington, DC; Wilford Hall Air Force Medical Center, San Antonio, TX;
Womack Army Medical Center, Fort Bragg, NC; VA Medical Center,
Albuquerque, NM.
---------------------------------------------------------------------------

Conclusion
The DVHIP is a significant contribution to the health of the United
States military and veteran populations. Using the principle ``learn as
we treat,'' the program has three major components: clinical treatment,
research and training. The goal is to maximize the potential of
military personnel, assist able soldiers to return to duty, and conduct
translational research that will revolutionize care on the battlefield.
The work of the DVHIP has resulted in better care for military
personnel and has optimized their chances of returning to active duty,
thus saving DOD significant medical and retirement costs.
DVHIP is in a unique position to combine the treatment of military
personnel and veterans with the program's education, information and
support services. This synergy allows DOD and VA, in partnership with
NBIRTT to lead the nation in providing state-of-the-art care to all
active duty military personnel and veterans with brain injury.
We respectfully request funding of $5 million for fiscal year 2002
in DOD Health Affairs for Operation and Maintenance to continue this
important program (at a total funding level of $12 million).

Senator Stevens. Thank you very much.
Senator Inouye, I appreciate your courtesy.
Mr. Foil. Thank you so much for allowing us to be here.
Senator Stevens. Dr. Ko, National Security Research.

STATEMENT OF HARVEY KO, Ph.D., COALITION FOR NATIONAL
SECURITY RESEARCH

Dr. Ko. Good morning, Mr. Chairman and members of the
subcommittee. My name is Harvey Ko. I have over 28 years of
experience in classified DOD programs. I am presently the Chief
Scientist for Counterproliferation at the Johns Hopkins
University Applied Physics Laboratory.
I am here to testify today on behalf of the Coalition for
National Security Research (CNSR), a broadly based group of
scientific, engineering, mathematical, and behavioral
societies, universities, and industrial associations committed
to a stronger defense science and technology base. The CNSR
strongly supports DOD's science and technology (S&T) programs
across all defense organizations, especially those defense
research programs providing support to our Nation's
universities. These programs are the foundation of the
Department's research, development, test and evaluation
activity.
I want to express deep appreciation for the committee's
past support for the fiscal year 2001 funding approved for
these programs. We urge the subcommittee to approve robust and
stable funding for these basic, applied, and advanced
technology development elements in fiscal year 2002.
Specifically, CNSR joins many other organizations in urging the
subcommittee to increase the S&T program to $10 billion in
fiscal year 2002, a funding target consistent with numerous
program and Department review, including recommendations made
by the Defense Science Board.
With consideration of the fiscal year 2002 budget, it is
important to recognize the critical role that Department of
Defense science and technology plays in ensuring the future
national security of the United States and the safety and
effectiveness of our soldiers, sailors, airmen, and marines.
Simultaneously, these defense science programs contribute to
the research enterprise of the country, especially the
education of tomorrow's scientists and engineers.
I would like to now take a few moments to give you an
example of the return on investment of these DOD programs. In
response to the need to deter and counter the use of biological
and chemical weapons of mass destruction, the Applied Physics
Laboratory of the Johns Hopkins University is working under
Defense Advanced Research Projects Agency (DARPA) sponsorship
to develop and test new technologies that will protect both
military and civilian populations.
Advanced time of flight mass spectrometer instruments are
being developed and tested to be able to detect a broad range
of biological pathogens and chemical warfare agents. Background
environmental characterization and biosurveillance networks are
being tested to measure behavior in a population that could
signal the possible use, terrorist use of biological and
chemical warfare agents. The background characterization helps
us to understand the nature of the background fluctuations, to
differentiate naturally occurring phenomena such as seasonal
flu from anomalous events like the West Nile Virus and man-made
biological threats introduced by terrorists.
Such systems will inform government when such events occur,
help decide the proper course of action, and reassure the rest
of the unaffected population.
New biosurveillance networks are using information-based
architectures, sampling data from local medical,
pharmaceutical, and veterinary sources. Sophisticated signal
processing techniques, such as those we have used in anti-
submarine warfare, are being used to collate this information
in a positive fashion.
Collectively, these developments will give us the
capability to deal with today's threat spectrum and future
emerging threats.
In closing, I want to thank again the subcommittee for its
continued support of defense science and technology and for the
opportunity to appear here today on behalf of the Coalition of
National Security Research. We look forward to assisting you in
any way possible. Thank you.
[The statement follows:]
Senator Stevens. Thank you very much, Dr. Ko.

PREPARED STATEMENT OF DR. HARVEY KO

Good morning Mr. Chairman and Members of the Subcommittee, my name
is Dr. Harvey Ko. I have 28 years of experience with DOD research
programs and am currently Chief Scientist for Counterproliferation at
the Johns Hopkins University Applied Physics Laboratory. I am here to
testify today on behalf of the Coalition for National Security
Research, a broadly based group of scientific, engineering,
mathematical and behavioral societies, universities and industrial
associations committed to a stronger defense science and technology
base.
CNSR strongly supports DOD's S&T programs across all defense
organizations, especially those defense research programs providing
support to our nation's universities. These programs are the foundation
of the Department's Research, Development, Test and Evaluation (RDT&E)
activity. I want to express deep appreciation for the Committee's past
support and for the fiscal year 2001 funding approved for these
programs. We urge the subcommittee to approve robust and stable funding
for these basic (6.1), applied (6.2) and advanced technology
development (6.3) elements in fiscal year 2002. Specifically, CNSR
joins many other organizations in urging the subcommittee to increase
the S&T program to $10 billion in fiscal year 2002, a funding target
consistent with numerous program and department reviews including
recommendations made by the Defense Science Board.
Despite substantial appreciation for the importance of DOD S&T
programs on Capitol Hill, total research within DOD declined by over 24
percent in constant dollars during the last decade. This decline poses
a real threat to America's ability to maintain its competitive edge in
the long term, as warfare becomes increasingly technology- and
information-based. As you know, the President proposes to increase
defense R&D programs by $20 billion over five years, including $2.6
billion in fiscal year 2002. Although the administration did not
specify which R&D accounts would receive increases, we strongly
recommend that enough of this proposed increase be directed to the core
S&T research accounts to achieve the $10 billion funding target, an
increase which will continue the positive trend started in fiscal year
2001 and allow for both preparation and protection of the men and women
in our future military.

Partnerships
Basic research is of critical strategic value to all of DOD and
important to maintaining the relationship between DOD, other federal
agencies, and the university research community. The Department's
investment in S&T, which comprises about 25 percent of the overall
RDT&E line, is executed through a partnership among the Defense
Agencies, service laboratories, universities, industry and
international collaborations. Each member of the partnership provides
its own unique capabilities and strengths. Universities perform roughly
60 percent of all basic S&T for the Department of Defense. These
partnerships have resulted in enormous benefit to all parties involved
by significantly advancing the frontiers of knowledge in service of our
military.

The Need for DOD S&T
With consideration of the fiscal year 2002 budget, it is important
to recognize the critical role DOD S&T plays in ensuring the future
national security of the United States and the safety and effectiveness
of our soldiers, sailors, airmen, and marines. Simultaneously, these
defense science programs contribute to the research enterprise of the
country and the education of tomorrow's scientists and engineers. The
Department provides a critical investment in several disciplines
including engineering, physical, math, computer and behavioral sciences
vital to our future national security.
The challenges of a new era--in homeland defense, asymmetric
threats, infrastructure protection, and disruptive technologies, among
others--place an even more important emphasis on enhanced battlefield
awareness and increased warfighter protection. From an R&D standpoint,
DOD must maintain focus on both the near-future readiness and
modernization needs of the department and on the long-term future needs
of the warfighter, ten and twenty years from now. Throughout this
century, our most significant military achievements have derived from
the transforming discoveries of science and the development of new
technological capabilities enabled by science. Future military
capabilities will rest on our commitment to making significant
investments in science and technology, which has provided the technical
basis for the strong economic growth of the United States over the past
30 years. DOD research programs provide new knowledge and understanding
in science and engineering fields that underpin national defense. This
research creates new opportunities to enhance capabilities of future
military systems and to make them easier and less expensive to
manufacture, operate and maintain.
As you are aware, previous investments in defense science and
technology have led to breakthrough developments in areas such as
distributed networking, advanced materials, global navigation,
precision guidance, and stealth technology that have equipped America's
men and women in uniform with the finest technologies in the world.
Current research in remotely-operated mini-robots, remote medicine,
chemical and mechanical sensors, large scale battlefield simulations
and advanced data memory systems will protect the warfighters of the
future by removing them from harm's way, providing on-site emergency
medical care, identifying dangerous environments, improving training
and speeding data availability and usability.
The support of this subcommittee is critical to ensuring that we
maintain a viable S&T base to meet our future security needs on land,
in the air, and at sea.

DOD S&T Results for National Security and Domestic Applications
Now I would like to take a moment to highlight a few examples of
the return on investments in basic R&D provided to DOD and the nation.
I know you will all recognize some of these successes, but some might
be less well known. I will start with some examples from my own
institution.
In response to the need to deter and counter the use of biological
and chemical weapons of mass destruction, the Applied Physics
Laboratory of the Johns Hopkins University is working under DARPA
sponsorship to develop and test new technologies that will protect both
military and civilian populations. Advanced Time-of-Flight Mass
Spectrometer instruments are being tested to rapidly detect a broad
range of biological pathogens and chemical warfare agents. Background
Environmental Characterization and Biosurviellance networks are being
tested to measure anomalous behavior that could signal the terrorist
use of biological and chemical warfare agents. These developments will
give us the capability to deal with today's threat spectrum and future
emerging threats.
The University of South Carolina, through its DEPSCoR-supported
Industrial Mathematics Institute (IMI), has developed algorithms and
software that enable the rapid display, querying and registration of
Digital Terrain Maps. This software is of potential value in mission
planning, autonomous and semi-autonomous navigation, rapid targeting
and post battlefield assessment.
A DOD-funded researcher at the University of California at
Berkeley, using a pair of Plexiglas wings he called ``Robofly,'' for
the first time provided a comprehensive explanation of how insect fly.
The research could lead to the development of tiny flying devices that
could be dispatched in swarms to spy on enemy forces.
Improved energy efficiency throughout the Defense Department and
its mission activities--testing, training, operations, facilities--has
the potential to save the federal government, and in turn the taxpayer,
millions per year. Fuel cells are among the most promising sources of
clean energy needed for numerous civil and military devices. The
development of efficient electrocatalysts is essential to the
improvement of fuel cell performances. Researchers at the University of
South Carolina, supported by DOD S&T funding, are applying theoretical
and computation methods to the understanding of electrocatalysis,
focusing on the electron reduction of oxygen on platinum electrodes.
No one foresaw the enormous range of applications and whole
industries that have evolved from the Defense-sponsored discovery of
lasers. The basic concepts leading to the development of the laser were
discovered in a microwave research program at Columbia University
funded by the three Services. Lasers were combined with transistors and
the billion-dollar fiber optic industry resulted. Fiber optic
communications, compact disk players, laser printers, procedures to
reattach eye retinas and new cancer surgeries all exist because of
these breakthroughs, the result of defense basic research.
In response to threats due to inadequate or outdated mission
terrain mapping tools, the Georgia Institute of Technology developed
Falcon View, a laptop-mapping software. Designed for the U.S. Air
Force, U.S. Special Operations Command and the U.S. Navy, Falcon View
integrates aeronautical charts, satellite images and other data to
provide detailed, up-to-date data imagery to flight crews conducting
mission planning using a relatively simple laptop computers. The system
is credited with reducing typical mission planning time from seven
hours or more down to twenty minutes.
DARPA and ONR-sponsored researchers at Duke University Medical
Center and the Massachusetts Institute of Technology have tested a
neural system in animals that utilizes implanted electrodes to assist
brain signals in controlling robotics. Scientists transmitted the brain
signals over the Internet, remotely controlling a robot arm 600 miles
away. The recording and analysis system could form the basis for a
brain-machine interface that would allow paralyzed patients to control
the movement of prosthetic limbs. The finding also supports new
thinking about how the brain encodes information, by spreading it
across large populations of neurons and by rapidly adapting to new
circumstances.
The Applied Physics Laboratory of the University of Washington,
Seattle, has developed under U.S. Navy sponsorship, a high resolution,
imaging sonar for underwater mine detection and identification in poor
visibility waters such as those commonly encountered in ports and
harbors. The unique sonar, based on acoustic technology that mimics the
optical lens and retina of the human eye, produces a picture-like
image. One version of the sonar is designed to be the ``eyes'' of the
unmanned, autonomous, underwater vehicles being developed for mine
clearance and special operations. A hand-held version enables a diver
to easily and accurately distinguish between mines and false targets
such as mine-like debris, and to identify specific mine types in zero-
visibility water. It is intended to assist Special Forces and Explosive
Ordnance Disposal teams and is presently being used in Bahrain.
In the late 1960's, DOD-initiated research to explore linking
computers in different geographical locations to improve communication
between their users. The research produced the world's first packet-
switched network, the ARPANET, which connected major universities. As a
result, more and more people gained access to more powerful computers.
Innovation in network design and improved research spawned a new breed
of information scientists who expanded the network to every corner of
the country and the world. Electronic mail, which was considered
earlier to be of minor interest to users, has become the most used
service of computer networks. Through ARPANET, defense basic research
made it possible to launch the National Information Infrastructure.

Conclusion
In closing, I want to again thank the subcommittee for its
continued support of Defense S&T and for the opportunity to appear here
today on behalf of CNSR and its members. The Coalition for National
Security Research looks forward to assisting you in any way possible.

Senator Stevens. Next, Harold Grimes, National Commander of
the Uniformed Services Disabled Retirees. Good morning, sir.

STATEMENT OF HAROLD G. GRIMES, SR., NATIONAL COMMANDER,
UNIFORMED SERVICES DISABLED RETIREES

Mr. Grimes. Good morning, Mr. Chairman, Mr. Inouye, members
of the Appropriation Committee. I am pleased to have this
opportunity to appear before you to convey issues and concerns
of American disabled military retirees, men and women who have
given most of their adult life in the service of their country
and the people of this great Nation.
Before I discuss the issues of concern facing the disabled
military retirees, let me convey the thanks of all Uniformed
Services, Disabled Retirees (USDR) members and 400,000 plus
disabled military retirees and 28 million veterans of this
country. Your continued support of this committee for uniformed
services disabled retirees has one major purpose and that is to
allow disabled retirees to live out their lives in dignity and
honor which they truly earned.
Our organization and Representative Michael Bilirakis of
Florida have tried for more than 20 years to pass the issue of
concurrent receipt. The Congress for this period of time has
contended that because of large national deficits it was
impossible to allow the passage of H.R. 303, concurrent
receipt. Now, with the support and help of Senator Harry Reid
of Nevada, there is tremendous strength and support in the
Senate and House, with Bills H.R. 303 and Senate Bill 170. We
now feel that, with the large surpluses and the support which
USDR and all the national veterans organizations have gained in
both Houses, that we must ask that the Appropriations Committee
do whatever is necessary to allocate the moneys for the passage
of these important bills.
The passage of concurrent receipt will be an asset in many
ways. The earned retirement dollars that would be paid to
disabled veterans will be taxed in most cases and 25 percent of
those revenues will be returned to the U.S. Treasury in tax
dollars of one-half a billion dollars or more. The cost of
military recruiting can be affected at a savings of millions of
dollars now being spent needlessly because of the lack of
support of the military retiree community. The loss of our
support and help because of this issue and the loss of other
benefits has helped cause the lack of recruits for today's
military and a cost that is unwarranted.
Mr. Chairman, the disabled military retiree is the only
government employee or agency that is asked to undergo such
discrimination. Because of this injustice, it has placed undue
hardships upon the men and women who have given more to their
country than anyone else, only to be put on the back shelf and
forgotten because of an archaic law that should have been
rescinded years ago.
We ask for our retirement that has been earned as an
entitlement for 20 years or more of arduous service to the
United States of America. Additionally, we ask for the VA
service-connected disability award, which is a completely
different issue and benefit than retirement pay. It is awarded
as compensation for injuries and illness contracted during
those years of service to his or her country.
The Congress of 1984 saw fit to pass a bill to establish a
military retirement trust fund administered by the Department
of Defense and--correction, administered by Department of
Treasury, for all who served honorably for 20 or more years.
There has also been established a VA compensation program to
pay disability for pain and suffering to those who were
disabled in service to this great Nation.
VA compensation is still granted and being paid, but only
the military retiree is told to pay his own disability for his
earned retirement entitlement. We currently have a majority of
support from both houses of the Congress, but still have been
unable to get a bill to the floor for a favorable vote.
I ask, Mr. Chairman, that your committee take whatever
actions are necessary to make funds available to fund this
entitlement and also the VA benefit. This issue has lingered on
far too long and has been put off by delaying actions and
tactics such as Mr. Matt Thornberry's action taken this year in
the House to have the House once again send it to the
Secretary.
Senator Stevens. Mr. Grimes, I am sorry to tell you your
time has expired. Besides that, this is an entitlement. This
committee has nothing to do with that other than to vote on the
floor. That is not within the jurisdiction of our committee to
fund. I am sorry, I think you know that. I appreciate your
appearance. Thank you very much.
Mr. Grimes. Thank you, sir.
[The statement follows:]

PREPARED STATEMENT OF HAROLD G. GRIMES, SR.

Messrs, Chairman and members of the Appropriations Committee: I am
pleased to have this opportunity to appear before you to convey issues
and concerns of Americas' Disabled Military Retirees, men and women who
have given the best years of their adult life in the service to their
country and the people of this great nation.
Before I discuss the issues of concern facing the Disabled Military
Retiree, let me convey the thanks of all USDR members and the 400,000
plus Disabled Military Retirees for the continued support of you and
your committee.
The Uniformed Services Disabled Retirees has one major purpose, and
that is to allow all Disabled Retirees to live out their lives in
dignity and honor, which they truly earned. Our organization and
Representative Michael Bilirakis of Florida have tried for more than
twenty years to pass the issue of con-current receipt. The Congress for
this period of time has contended that because of large National
deficits it was impossible to allow the passage of H.R. 303, Con-
Current Receipt. Now with the support and help of Senator Harry Reid of
Nevada there is tremendous strength and support in the Senate and House
with bills H.R. 303 and S. 170. We now feel that with the large surplus
and the support which USDR and all of the National Veterans
Organizations have gained in both houses, that we must ask that the
Appropriations Committee do what ever is necessary to allocate the
monies for the passage of these most important bills. The passage of
con-current receipt will be an asset in many ways. i.e. the earned
retirement dollars that will be paid out to disabled veterans will be
taxed in most cases at 25 percent level and add revenues of one-half
billion dollars or more to the U.S. Treasury--the cost of military
recruiting can be affected at a savings of millions of dollars now
being spent needlessly because of the lack of support from the military
retirement community. The loss of our support and help because of this
issue and the loss of other benefits has helped caused the lack of
recruits for todays military and a cost that is unwarranted.
Mr. Chairman, the Disabled Military Retiree is the only government
employee or agency that is asked to under-go such discrimination.
Because of this injustice it has placed undue hardships upon the men
and women who have given more than anyone, to their country only to be
put on the back shelf and forgotten because of an archaic law that
should have been rescinded years ago. We ask for our Retirement that
has been earned as an entitlement for 20 or more years of arduous
service to the United States of America, additionally we ask for the VA
Service Connected Disability Award, which is a completely different
issue and benefit than Retirement Pay, is awarded as compensation for
injuries and illnesses contracted during those years of service to his/
her country.
The Congress of 1984 saw fit to pass a bill to establish a military
retirement trust fund administered by the Department of the Treasury
for all who served honorably for 20 years or more. There has also been
established a VA compensation program to pay disability for pain and
suffering to those who were disabled in the service of this great
nation. VA compensation is still granted and being paid but only the
military retiree is told to pay his own disability from his earned
retirement entitlement.
We currently have a majority of support from both Houses of
Congress but still have been unable to get a bill to the floor for a
vote. I ask Mr. Chairman, that your committee take what-ever actions
that are necessary to make funds available to fund this entitlement and
also the VA Benefit. This issue has lingered on far to long and has
been put off by to many delaying tactics. Mr. Chairman, as of this date
over 331 members of the House have co-sponsored H.R. 303 and over 56
members of the Senate have co-sponsored S. 170. I fail to understand,
with this kind of support for the Disabled Military Retiree, and the
facts that have been presented over the past twenty years, why this
injustice continues.
After a review of H. Con. Res. 83 of the 107th Congress, it is hard
for me to understand why there is no money for persons who fought for
this country. Billions of dollars are spent for social security for
illegal aliens to this country, paying for their education, health
benefits but we forget our own.

Senator Stevens. Our next witness, Ms. Hershkowitz.

STATEMENT OF LOUISE E. HERSHKOWITZ, CRNA, AMERICAN
ASSOCIATION OF NURSE ANESTHETISTS

Ms. Hershkowitz. Chairman Stevens, Senator Inouye, good
morning.
Senator Stevens. Ms. Hershkowitz, pardon me.
Ms. Hershkowitz. Thank you. Thank you for the opportunity
to testify before the subcommittee today. My name is Louise
Hershkowitz and I am a certified registered nurse anesthetist
(CRNA). I am a CRNA and a member of the American Association of
Nurse Anesthetists (AANA).
I am testifying today on behalf of AANA, which represents
more than 28,000 CRNA's, including over 600 that serve in our
armed forces. I hope to inform you today about the national
nursing shortage that has been well publicized, how that
affects the availability of nurse anesthetists, and how this
committee may help DOD face this crisis.
Enrollments in nursing programs continue to decline and the
nursing work force continues to age and retire. This is true
for CRNA's as well. Recruitment and retention of CRNA's for the
military becomes increasingly difficult when the civilian
sector faces such critical shortages. According to a 1998 work
force survey by AANA, as many as 59 percent of civilian
institutions in this country are also actively recruiting
CRNA's.
In addition, the escalating number of health care
procedures requiring anesthesia have increased the need for
CRNA's. However, the demand for services currently exceeds the
availability of these anesthesia providers. This shortage
continues to create a competitive hiring market in which it is
difficult for the military to compete. Yet recruitment and
retention of CRNA's must remain of utmost importance in order
to ensure that our Federal services can meet their medical
mission.
In addition, the high demand and low supply of CRNA's in
the health care community leads to higher incomes, widening the
gap in pay for CRNA's in the civilian sector as compared with
the military. There has been no change in the incentive
specialty pay (ISP), since the increase from $6,000 to $15,000
was instituted in fiscal year 1995, even though civilian pay
has continued to rise during this time.
We would like to thank the members of this committee for
their continued support and funding of the ISP and for board
certification pay for nurse anesthetists. At this time we
request that the committee look at raising the ISP for both
members under service obligation and those no longer under
service obligation payback for their education in anesthesia.
These special pays help the military to remain competitive in
the job market and assist them in presenting military nurse
anesthesia as an attractive professional choice.
We believe the Department of Defense could benefit even
more with more appropriate utilization of its anesthesia
providers. For decades, CRNA's have staffed ships, isolated
U.S. bases, forward deployed combat hospitals, and forward
surgical teams without physician anesthesia support. Currently
in Kosovo there is a single nurse anesthetist that is providing
all the anesthesia care, again no anesthesiologist present. If
such practice models are accepted for deployed situations,
there is no reason they should not be acceptable in urban
military treatment facilities.
We recommend that this committee direct all branches of the
Department of Defense to utilize their anesthesia providers in
the most cost effective manner, prohibiting supervision
requirements in urban facilities that only drive up the cost
while doing nothing to enhance the quality of care.
In conclusion, AANA thanks this committee again for its
support of military CRNA's through the ISP and board
certification pay. AANA believes that more appropriate
utilization of CRNA's in the military is of critical concern
and is an area that could be examined for increased cost
savings.
I thank the committee members for their consideration of
these issues and will be happy to answer any questions you may
have.
[The statement follows:]

PREPARED STATEMENT OF LOUISE E. HERSHKOWITZ

The American Association of Nurse Anesthetists (AANA) is the
professional association that represents over 28,000 certified
registered nurse anesthetists (CRNAs) in the United States, including
over 600 CRNAs in the military services. The AANA appreciates the
opportunity to provide testimony regarding CRNAs in the military. We
would also like to thank this committee for the help it has given us in
assisting the Department of Defense (DOD) and each of the Services to
recruit and retain CRNAs.

BACKGROUND INFORMATION ON NURSE ANESTHETISTS IN THE DOD

The practice of anesthesia is a recognized specialty within both
the nursing and medical professions. Both CRNAs and anesthesiologists
(MDAs) administer anesthesia for all types of surgical procedures, from
the simplest to the most complex, either as single providers or in a
``care team setting.'' Patient outcome data has consistently shown that
there is no significant difference in outcomes between the two
providers. CRNAs and MDAs are both educated to use the same anesthesia
processes in the provision of anesthesia and related services.
Nurse anesthetists have been the principal anesthesia providers in
combat areas in every war the United States has been engaged since
World War I. Military nurse anesthetists have been honored and
decorated by the U.S. and foreign governments for outstanding
achievements, resulting from their dedication and commitment to duty
and competence in managing seriously wounded casualties. In World War
II, there were 17 nurse anesthetists to every one anesthesiologist. In
Vietnam, the ratio of CRNAs to physician anesthetists was approximately
3:1. Two nurse anesthetists were killed in Vietnam and their names have
been engraved on the Vietnam Memorial Wall. During the Panama strike,
only CRNAs were sent with the fighting forces. Nurse anesthetists
served with honor during Desert Shield and Desert Storm. Military CRNAs
continue to provide critical anesthesia support to humanitarian
missions around the globe in such places as Somalia, Haiti and Bosnia.
Currently a single CRNA is providing all the anesthesia care to our
servicemen and women in Kosovo. No anesthesiologists are assigned to
these missions.
nursing shortage--how this committee can help the dod
In all of the Services, maintaining adequate numbers of active duty
CRNAs is of utmost concern. For several years, the number of CRNAs
serving in active duty has consistently fallen short of the number
authorized by DOD as needed providers. This is further complicated by
the predicted national nursing shortage that has been well publicized
in the press and professional journals. Enrollments in nursing programs
continue to decline and the nursing workforce continues to age and
retire. Recruitment of nurse anesthetists for the military becomes
increasingly difficult when the civilian sector faces such critical
shortages. According to a recent survey by the AANA Administrative
Management Committee, as many as 59 percent of civilian institutions in
the country are also actively recruiting CRNAs. This means that the
military must work even harder at recruiting and retaining nurse
anesthetists.
In addition, the AANA cited a decline in anesthesiology resident
positions, as well as an increase in office-based surgery and surgery
in places other than hospitals as driving the increased need for CRNAs.
Additionally, with managed care continuing to pursue cost-cutting
measures, coverage plans are recognizing CRNAs for providing high-
quality anesthesia care with reduced expense to patients and insurance
companies. The cost-efficiency of CRNAs helps keep escalating medical
costs down.
According to AANA's 1998 Workforce Survey, 35 percent of
respondents cited an increase in the number of CRNA positions, compared
with a 20 percent increase in 1997. Forty-three percent of the nurse
anesthetist managers reported open positions for CRNAs within their
departments, ranging from one to twelve available jobs. Fifty-nine
percent of the respondents were actively recruiting CRNAs.
The escalating numbers of health care procedures requiring
anesthesia have increased the need for CRNAs. However, the demand for
services currently exceeds the availability of these anesthesia
providers. In recent years, an increase in the number of CRNAs who are
retiring, combined with decreasing graduation rates from nurse
anesthesia programs, has contributed to the overall decline in CRNA
numbers.
In 1990, the U.S. Department of Health and Human Services published
findings indicating a national shortage of almost 5,400 nurse
anesthetists. The study concluded that nurse anesthesia educational
programs would need to produce between 1,500 and 1,800 graduates
annually to meet societal nurse anesthesia demands by the year 2010.
Nevertheless, only about 1,000 nurse anesthesia students graduate
annually.
As recently as February 28, 2001, Brigadier General Barbara C.
Brannon, Director of the Air Force Nursing Corps, testified before this
Senate Committee that, ``the national nursing shortage is having a
devastating effect on staffing throughout the health care industry, and
the Air Force Medical Service is no exception. For the third
consecutive year, we are experiencing shortfalls in accessions. We were
85 nurses, or 30 percent, short of our nurse recruiting goal in fiscal
year 1999.'' We couldn't agree more. This nursing shortage will
continue to create a competitive environment for CRNAs to be recruited
by the civilian sector or military service branches.
In addition, at a time of a national nursing shortage greater
utilization of nurses at the military treatment facilities (MTFs) will
be needed to meet the medical needs of aging retirees in the new
TRICARE for Life program. The passage of the Fiscal Year 2001 Defense
Authorization Act included TRICARE for Life, the expansion of medical
care for all military retirees over the age of 65 at the MTF.
This Committee can greatly assist in the effort to attract and
maintain essential numbers of nurse anesthetists in the military by
their support of special pays.

The Incentive Special Pay for Nurses
On February 28, 2001, Rear Admiral Kathleen Martin, Director of the
Navy Nurse Corps, testified before this Senate Committee:

Our recruiting success depends heavily on your continuation
of the accession bonus and the education stipend programs.
Given today's competitive health care environment, that may not
be enough to maintain the force structure. Currently, only
nurse practitioners, midwives and nurse anesthetists receive
any type of specialty pay. That program has been a successful
retention tool thus far, but the civilian-military pay gap is
rapidly widening. Further retention bonuses may be needed to
retain all types of nurses as competition increases for the
dwindling supply.

According to a March, 1994 study requested by the Health Policy
Directorate of Health Affairs and conducted by DOD, a large pay gap
existed between annual civilian and military pay in 1992. This study
concluded, ``this earnings gap is a major reason why the military has
difficulty retaining CRNAs.'' In order to address this pay gap, in the
fiscal year 1995 Defense Authorization bill Congress authorized the
implementation of an increase in the annual Incentive Special Pay (ISP)
for nurse anesthetists from $6,000 to $15,000 for those CRNAs no longer
under service obligation to pay back their anesthesia education. Those
CRNAs who remain obligated receive the $6,000 ISP.
There has been no change in the ISP since the increase was
instituted in fiscal year 1995, while it is certain that civilian pay
has continued to rise during this time. In addition, those CRNAs under
obligation who are receiving only $6,000 suffer from an even larger pay
gap. It would seem that the basic principle uncovered by the 1994 DOD
Health Affairs study would still hold true today--that a large earnings
gap contributes greatly to difficulties in retaining CRNAs.
High demand and low supply of CRNAs in the health care community
leads to higher incomes widening the gap in pay for CRNAs in the
civilian sector compared to the military. The fiscal year 2000 AANA
Membership survey measured income in the civilian sector by practice
setting. The median income in a hospital setting is $100,000, MDA group
$90,000, and self-employed CRNA $108,000 (includes Owner/Partner of a
CRNA Group, CRNA Physician Group, or Locum Tenens Agency and or
Independent Contractor). These median salaries include call pay,
overtime pay, and bonus pay.
In civilian practice, all additional skills, experience, duties and
responsibilities, and hours of work are compensated for monetarily.
Additionally, training (tuition and continuing education), health care,
retirement, recruitment and retention bonuses, and other benefits often
equal or exceed those offered in the military. For example the AANA
fiscal year 2000 membership survey reported, CRNA's median annual
vacation is 22 days, 6 days of holiday and 6 sick days.
Active duty CRNAs are subject to working 24 hours a day 7 days a
week when deployed. In contrast, civilian contract CRNAs employed
within MTFs work 35-40 hours a week and have higher pay. These contract
CRNAs have higher salaries ranging from $93,000-$129,000. Depending on
the contract, these CRNAs typically work weekdays with no on-call
duties, or other administrative, supervisory, or teaching
responsibilities. AANA members have mentioned that this can create a
morale issue amongst CRNAs working at MTFs. In addition, there are
cases when active duty CRNAs have separated from the military to then
contract with a TRICARE subcontractor and make a higher salary at the
same MTF.
Rear Admiral Kathleen Martin, Director of the Navy Nurse Corps,
stated for the record before this Senate Committee at the February 28,
2001 hearing:

Compensation is an issue for military staff as well. I
clearly see this as an MTF commander. Military personnel work
side by side with contract staffs who command salaries far
exceeding those of their military counterpart. This creates
additional dissatisfaction for our military members.
Compensation is a powerful driver in the decision to remain on
active duty or to leave the service.

Salaries in the civilian sector will continue to create incentives
for CRNAs to separate from the military, especially at the lower grades
without a competitive incentive from the military to retain CRNAs.
Therefore, it is vitally important that the Incentive Special Pay for
CRNAs be maintained and even increased as we enter this period of a
severe nursing shortage.
AANA thanks this Committee for its support of the annual ISP for
nurse anesthetists. AANA strongly recommends the continuation and even
an increase in the annual ISP for CRNAs, which recognizes the special
skills and advanced education that CRNAs bring to the DOD health care
system.

Board Certification Pay for Nurses
Included in the fiscal year 1996 Defense Authorization bill was
language authorizing the implementation of a board certification pay
for certain non-MD health care professionals, including advanced
practice nurses. AANA is highly supportive of board certification pay
for all advanced practice nurses. The establishment of this type of pay
for nurses recognizes that there are levels of excellence in the
profession of nursing that should be recognized, just as in the medical
profession. In addition, this pay may assist in closing the earnings
gap, which may help with retention of CRNAs.
While many CRNAs have received board certification pay to date,
there are many that remain ineligible. Since certification to practice
as a CRNA does not require a specific master's degree, many nurse
anesthetists have chosen to diversify their education by pursuing an
advanced degree in other related fields. But CRNAs with masters degrees
in education, administration, or management are not eligible for board
certification pay since their graduate degree is not in a clinical
specialty. Many CRNAs who have non-clinical master's degrees either
chose or were guided by their respective services to pursue a degree
other than in a clinical specialty. Many feel that diversity in
education equates to a stronger, more viable profession. CRNAs do
utilize education and management principles in their everyday practice
and these skills are vital to performance of their duties. To deny a
bonus to these individuals is unfair, and will certainly affect their
morale as they work side-by-side with their less-experienced
colleagues, who will collect a bonus for which they are not eligible.
In addition, in the future this bonus will act as a financial
disincentive for nurse anesthetists to diversify and broaden their
horizons.
AANA encourages DOD and the respective services to reexamine the
issue of awarding board certification pay only to CRNAs who have
clinical master's degrees.

EFFECTIVE UTILIZATION OF PROVIDERS IS CRUCIAL

In light of the fact that it costs less to educate CRNAs, that nurse
anesthetists draw minimal bonuses compared to physician
anesthesiologists, and that numerous studies show there is no
significant differences in outcomes between anesthesia providers, it is
clear that CRNAs are a cost-effective anesthesia provider for the
military. From a budgetary standpoint, it is vitally important to
utilize these high quality, cost-effective anesthesia providers in
appropriate ratios with their physician anesthesiologist counterparts.
``Over-supervision'' is not only unproductive, it is financially
wasteful and unnecessary.
The U.S. military services do not require anesthesiologist
supervision of CRNAs. There are many military medical treatment
facilities throughout the world which have military CRNAs as their sole
anesthesia providers, and this practice arrangement has not had a
negative impact on the quality of anesthesia care. Increasing numbers
of anesthesiologists in the military has resulted in practice models
with wasteful practice ratios. There continues to be proposals in
various branches of the military for increased supervision of CRNAs,
with attempts by physician anesthesiologists to place unnecessary
supervision language into local military treatment facility policies
which would require strict adherence to a practice model of one CRNA to
every one anesthesiologist.
A practice model requiring one anesthesiologist for every nurse
anesthetist would be financially wasteful. Even a requirement of having
one anesthesiologist to every two or three CRNAs is also wasteful. But
even more importantly, the Services would lose mobilization
effectiveness by requiring multiple anesthesia providers where
autonomous CRNAs have previously provided anesthesia safely and
effectively for over 100 years. This military standard is based on the
need of the Services to provide a wide range of health care with as few
providers as necessary during mobilization to remote or isolated
locations. Historically, CRNAs have always worked independently at such
locations; therefore, there is no basis for requiring supervision of
CRNAs when they then return to more urban facilities. A predetermined
ratio of supervision should not become part of the practice
environment. In March of 2000, Rear Admiral Kathleen Martin, Director
of the Navy Nurse Corps, testified to this Senate Committee:

Our advanced practice nurses--all practice to the fullest
extent of their competency and practice scope to ensure the
right care provider delivers care to the right patient based on
their health requirements. In this manner, we maximize our
provider assets while allowing them to maintain those critical
practice competencies needed for wartime roles.

The ability to function autonomously in remote locations is
required of all military CRNAs. It is the promise of this independence
that draws many to military anesthesia service. Therefore, any attempt
to adopt an anesthesia practice standard that would require that an
anesthesia care team consisting of a CRNA and a supervising
anesthesiologist to deliver all anesthesia would not only undermine
mobilization effectiveness, but it would also prove detrimental to the
morale of military CRNAs and would undermine attempts by the Services
to recruit highly motivated individuals.
AANA recommends that this Committee direct DOD to maintain the
mobilization effectiveness of CRNAs by enforcement of the current
practice standard of autonomous anesthesia care by CRNAs in all
locations.

CONCLUSION

In conclusion, the AANA believes that retention and the appropriate
utilization of CRNAs in the Services is of critical concern. Many
military facilities are suffering from ineffective practice models, and
therefore inefficient use of provider services. The efforts detailed
above will assist the Services in maintaining the military's ability to
meet its peacetime and mobilization medical mission in a cost-effective
manner without sacrificing quality of care. We thank the Committee for
its support of CRNAs.

Senator Stevens. What is the enlistment period for a new
nurse anesthesiologist?
Ms. Hershkowitz. The commitment after nurse anesthesia
education is 4 years.
Senator Stevens. We would be very interested in some
mechanism to help them pay off their student loan if they come
in with student loans. Would you give us some estimate on that?
I do think you are right, this is one of the critical areas of
the services, according to the hearings we have had so far. We
would like to have a conference with you and see what we can do
to help you.
Ms. Hershkowitz. We would be very happy to do that,
Senator.
Senator Inouye. I just want to point out that on my last
surgery at Walter Reed the anesthesia was administered by a
nurse anesthetist.
Ms. Hershkowitz. Thank you, Senator Inouye, for your
support over the years as well.
We would very much like to work with you on that, Senator.
Senator Stevens. Thank you very much. Please contact us. We
will be happy to work with you.
Ms. Hershkowitz. Thank you. We will.
Senator Stevens. Dr. Taylor.

STATEMENT OF ROBERT TAYLOR, M.D., Ph.D., CO-CHAIR,
GOVERNMENT AFFAIRS AND ADVOCACY COMMITTEE,
RESEARCH SOCIETY ON ALCOHOLISM

Dr. Taylor. Good morning, Mr. Chairman and members of the
subcommittee. My name is Robert Taylor. I am a professor of
pharmacology and medicine and chairman of the Howard University
College of Medicine's Department of Pharmacology. I also co-
chair the Government Affairs and Advocacy Committee for the
Research Society on Alcoholism (RSA). RSA is a professional
research society whose 1200 members conduct basic medical
psychosocial research on alcoholism and alcohol abuse,
primarily at academic institutions.
In recent years our organization has submitted testimony to
this subcommittee about alcoholism in the military, a serious
problem that compromises national preparedness and the defense
of the Nation. We are deeply grateful that the Congress has
recognized this problem by providing additional funding for
medical research in the defense health program in recent years,
and we are particularly pleased that alcohol research has been
specifically mentioned as one area to be funded. We commend
this committee, particularly the efforts of Senator Harkin, in
the past.
Furthermore, we are pleased to report that 4 of the 14
proposals that were recommended for funding by the DOD for
fiscal year 2000 were for alcohol abuse prevention research.
You will recall that Congress appropriated $25 million in
fiscal year 2000 to DOD to cover research in 14 specific areas,
including alcoholism research. We believe that there is a clear
need for more research in this area and would like to propose
that additional funds be directed toward research that will
address the problem of alcoholism and alcohol abuse in the
military.
Although the peer-reviewed medical research program created
by Congress in fiscal year 1999 is relatively new, the DOD
reports recently that projects funded from that program and
projects from early fiscal year 2000 have already produced
significant research outcomes, ranging in areas from basic
research to clinically applicable findings. For instance, in
the area of alcohol abuse a research team at Tripler Army
Medical Center showed that even short-term alcohol abuse,
equivalent to three days of binge drinking, can alter the
hydration status of the individual 18 hours after the last
drink of alcohol.
As you know, alcoholism is a tragedy that touches all
Americans and American families. One in ten Americans suffer
from alcoholism or alcohol abuse and their drinking will impact
on their family, their community, and society as a whole.
Recent research also indicates that alcoholism costs the
Nation approximately $185 billion annually. One-tenth of this
pays for treatment. The rest is lost productivity, accidents,
violence, and premature death.
Now, with regards to the military, the effects of
alcoholism and abuse are likely to be more enormous. For
example, heavy drinking among military men is over 40 percent
more prevalent than in the civilian sector. Among young men
aged 18 to 25, the rate of alcohol, heavy alcohol use, is about
1.8 times higher for the military than for civilians. This is
data from the 1998 Department of Defense survey of health-
related behaviors among military personnel.
Among personnel in the lower pay grades, for example E-1 to
E-3, about one in five individuals report lost productivity due
to drinking and one in six report serious consequences of
drinking. Because these negative effects are most prominent
among the junior enlisted personnel, the absolute numbers of
personnel experiencing drinking problems is quite large.
Furthermore, the effects of alcohol abuse in the military place
in jeopardy the health and safety of all who serve in the armed
services.
Importantly, heavy alcohol use and associated negative
effects have not declined significantly over the past decade.
This is in contrast to declines in the use of illicit drug use
among the military, and this highlights the critical need for
more programmatic effort and resources directly targeting
alcohol use in the military.
Research, however, holds the promise of developing a better
understanding of the etiology of alcoholism, and we in the
alcohol research community are actively trying to find ways to
bring our research to bear on the military situation.
I thank you for your efforts, Mr. Chairman, and to the
committee, and I appreciate your efforts in the past.
Senator Stevens. Thank you very much, Dr. Taylor.
[The statement follows:]

PREPARED STATEMENT OF ROBERT TAYLOR

Good morning Mr. Chairman and Members of the Subcommittee. My name
is Robert Taylor. In addition to being the Chairman of Howard
University's Department of Pharmacology, I am the Co-Chair of the
Government Affairs and Advocacy Committee for the Research Society on
Alcoholism (RSA). RSA is a professional research society whose 1,200
members conduct basic, medical, and psychosocial research on alcoholism
and alcohol abuse.
In recent years, our organization has submitted testimony to this
subcommittee about alcoholism in the military, a serious problem that
compromises national preparedness and the defense of the nation. We are
deeply grateful that the Congress recognized this problem by providing
additional funding for medical research in the Defense health program
in recent years. We are particularly pleased that alcohol research has
been specifically mentioned as one area to be funded. Furthermore, we
are pleased to report that 4 of the 14 proposals that were recommended
for funding by the Department of Defense (DOD) for the fiscal year 2000
were for alcohol abuse prevention research.
You will recall that Congress appropriated $25 million in fiscal
year 2000 to DOD to cover research in 14 areas, including alcoholism
research. We believe that there is a clear need for more research in
this area and would like to propose that additional funds be directed
towards research that will address the problem of alcoholism and
alcohol abuse in the military.
Although the Peer Reviewed Medical Research Program created by
Congress in fiscal year 1999 is still relatively new, the DOD reports
that projects funded in fiscal year 1999 and early fiscal year 2000
have already produced significant research outcomes, ranging in areas
from basic research to clinically applicable findings. For instance, in
the topic area of alcohol abuse, a research team at Tripler Army
Medical Center showed that even short-term alcohol abuse, equivalent to
3 days of binge drinking, can alter the hydration status of the
individual 18 hours after the last drink of alcohol.
Alcoholism is a tragedy that touches all Americans. One in ten
Americans will suffer from alcoholism or alcohol abuse and their
drinking will impact on their family, their community, and society as a
whole. Recent research indicates that alcoholism and alcohol abuse cost
the nation approximately $185 billion annually. One-tenth of this pays
for treatment; the rest is the cost of lost productivity, accidents,
violence, and premature death.
In the military, the effects of alcoholism and alcohol abuse are
likely to be enormous. Heavy drinking among military men is over 40
percent more prevalent than in the civilian sector. Among young men
aged 18 to 25, the rate of heavy alcohol use is about 1.8 times higher
for the military than for civilians, according to the 1998 Department
of Defense Survey of Health Related Behaviors Among Military Personnel.
Among personnel in the lowest pay grades (i.e., E1 to E3), about 1
in 5 experiences productivity loss due to drinking (20.7 percent), 1 in
6 reports serious consequences of drinking (15.2 percent). Because
these negative effects are most prominent among the junior enlisted
personnel, the absolute numbers of personnel experiencing drinking
problems are quite large. Furthermore, the effects of alcohol abuse in
the military place in jeopardy the health and safety of all who serve
in the armed services.
Importantly, heavy alcohol use and associated negative effects have
not declined significantly over the past decade. These findings stand
in striking contrast to dramatic declines in rates of illicit drug use
among military. This highlights the critical need for more programmatic
effort and resources directly targeting alcohol use in the military.
Research, however, holds the promise of developing a better
understanding of the etiology of alcoholism, more effective prevention
programs and new and better methods for the treatment of alcoholism.
Unfortunately, alcohol research, which is conducted primarily at
the National Institute on Alcohol Abuse and Alcoholism (NIAAA) at the
National Institutes of Health and in the Department of Veterans Affairs
(DVA), is severely underfunded. In addition, few studies funded by the
NIAAA and the VA focus on prevention and treatment approaches that are
specific to the needs of the military. Little is known about how
prevention measures should be implemented in the unique social context
of military work and life.
We are poised at a time of unprecedented opportunities in alcohol
research. Scientists are exploring new ways to prevent alcohol-
associated accidents and violence, and prevention trials are developing
methods to address problem use. For the first time scientists have
identified discrete regions of the human genome that contribute to the
inheritance of alcoholism. Genetic research will accelerate the
rational design of drugs to treat alcoholism and improve our
understanding of the interaction between heredity and environment in
the development of alcoholism. The field of neuroscience is another
promising area of alcohol research. The development of more effective
drug therapies for alcoholism requires an improved understanding of how
alcohol changes brain function to produce craving, loss of control,
tolerance, and the alcohol withdrawal syndrome. This knowledge is
starting to bear fruit. Naltrexone, a drug that blocks the brain's
natural opiates, reduces craving for alcohol and helps maintain
abstinence. Ongoing clinical trials will help determine which patients
benefit most from Naltrexone and how the drug can best be used. Other
promising treatment agents, such as acamprosate, are currently
undergoing evaluation in the United States. The military needs to be
part of this effort.
Alcohol abuse and alcoholism are devastating problems of national
importance. The high rates of heavy drinking and associated problems
among military personnel demand immediate and increased attention.
Rates of alcohol use have remained unacceptably high for the last
decade while most other health indicators in the military have shown
substantial and clinically significant improvements.
Recommendation: The Research Society on Alcoholism urges that $10
million be allocated to research on alcohol abuse and alcoholism. These
funds could be administered by the Department of Defense alone or
jointly with the VA and NIAAA. This request balances the increased
morbidity, mortality, lost productivity, accidents, and an overall
reduction in readiness caused by the high rate of alcohol abuse and
alcoholism in the military with the abundance of research opportunities
to more effectively prevent and treat alcohol dependence and
alcoholism. RSA also urges the Subcommittee to include alcohol abuse
and alcoholism in the list of priority research areas recommended for
the Department of Defense Peer Reviewed Medical Research Program.
Alcohol research has now reached a critical juncture, and the
scientific opportunities are numerous. With the support of this
Subcommittee and the Congress, we believe that we can produce
significant advances in alcohol research and aid in understanding and
reducing the significant problem of alcoholism and alcohol abuse among
the men and women serving in our armed forces.
Thank you for your consideration of our request.

Senator Stevens. Our next is Dr. Donald Burke.

STATEMENT OF DONALD BURKE, M.D., CHAIRMAN, LEGISLATIVE
TASK FORCE, AMERICAN SOCIETY OF TROPICAL
MEDICINE AND HYGIENE

Dr. Burke. Chairman Stevens and Senator Inouye, thanks for
the opportunity to speak to you. I am here representing the
American Society of Tropical Medicine and Hygiene. I am a
professor of international health at Johns Hopkins University
and a retired Army colonel, where I was at the Walter Reed Army
Institute of Research for many years and had some extremely
valuable interactions with you over the past, and thank you for
your help in the past.
I am here today to call attention to two particular issues.
One is the military Human Immunodeficiency Virus (HIV) and
Acquired Immune Deficiency Syndrome (AIDS) program, which is
funded for $24 million for the coming fiscal year, at least is
budgeted for. What I would ask is that you consider increasing
that appropriation by at least $10 million to put it to the $34
or $35 million mark. What that would allow that program to do
is to continue to be funded at a level funding.
I think you are aware that the military AIDS vaccine
program and molecular epidemiology programs are leaders in the
world today, and if they do not get that additional $10 million
then they will have to cut back in programs which are ongoing
and excellent programs already. If I can be of any assistance
to you in that, I would be happy to do that.
The second issue I would like to call your attention to is
the military overseas laboratories. The Army and the Navy have
laboratories in five countries around the world where they do
leading research on malaria, enteric infections, viral
diseases, mosquito-borne, and other tropical diseases. Over the
last decade the number of those laboratories has decreased from
seven to five, with closure of laboratories in the Philippines
and in Brazil and no increase in any laboratories anywhere
around the world.
I think it may be time that you may want to consider
looking at that program and deciding is that optimally
configured in a way that meets the national security concerns
of the U.S. military in infectious disease and emerging
infectious diseases.
So I will keep it short and thank you very much for your
support.
[The statement follows:]

PREPARED STATEMENT OF DR. DONALD BURKE

The American Society of Tropical Medicine and Hygiene (ASTMH)
appreciates the opportunity to submit testimony to present our views on
fiscal year 2002 funding priorities to the Subcommittee.
The ASTMH is a professional society of 3,500 researchers and
practitioners dedicated to the prevention and treatment of infectious
and tropical diseases. The collective experience of our members is in
the areas of basic science, medicine, insect vector control,
epidemiology, and public health.
DOD medical research programs play a critical role in our nation's
infectious disease efforts. Furthermore, the programs are vitally
important to maintain the health of our troops in the theater. Working
with other U.S. public health agencies, DOD scientists at the U.S. Army
Medical Research Institute for Infectious Diseases (USAMRIID), the
Walter Reed Army Institute of Research (WRAIR), the U.S. Naval Medical
Research Center (NMRC), and DOD medical laboratories abroad are helping
us to better understand, diagnose, and treat infectious and tropical
diseases. Such diseases include malaria, AIDS, dengue, leishmaniasis
and other parasitic infections, cholera, and common diarrheal diseases,
scrub typhus, and hepatitis.
Infectious diseases are the second leading cause of death
worldwide, accounting for over 13 million deaths (25 percent of all
deaths worldwide in 1999). Twenty well-known diseases--including
tuberculosis, malaria, cholera, and Rift Valley Fever--have reemerged
or spread geographically since 1973, often in more virulent and drug-
resistant forms. At least 30 previously unknown disease agents have
been identified in this period--including HIV, Ebola, Nipah virus,
Marburg virus, and hepatitis C--for which therapy is not optimal or
does not exist at all.
Last year the CIA's National Intelligence Council issued a report
labeling global infectious disease a threat to U.S. national security.
``The Global Infectious Disease Threat and Its Implications for the
United States,'' concluded that infectious diseases are likely to
account for more military hospital admissions than battlefield
injuries. The report also assessed the global threat of infectious
disease, stating ``New and reemerging infectious diseases will pose a
rising global health threat and will endanger U.S. citizens at home and
abroad, threaten U.S. armed forces deployed overseas, and exacerbate
social and political instability in key countries and regions in which
the United States has significant interests.''
As mandated in The Presidential Executive Order issued 30 September
1999, entitled ``Improving Health Protection of Military Personnel
Participating in Particular Military Operations,'' mandates that ``It
is the Policy of the United States Government to provide our military
personnel with safe and effective vaccines, antidotes, and treatments
that will negate or minimize the effects of these health threats.''
This includes diseases endemic to areas of military operations.
Accordingly, the primary mission of the DOD's Military Infectious
Diseases Research Program is to develop new products with which to
protect and maintain the health of our troops in the theater. With
worldwide deployment of our military personnel, it is imperative to
protect them against infectious diseases that occur around the globe.
Often our troops are exposed to new strains of a disease that does not
exist within our own borders. Examples of the highly focused research
conducted by the Program include efforts to make vaccines to prevent
malaria and overseas strains of the AIDS virus.
In 1987 Congress mandated that the DOD establish the HIV Research
program because of the significant risk of active-duty personnel in
acquiring the HIV virus. Today, in all branches of the military,
approximately 400 military personnel become newly infected each year,
with as many as one-third of these infections acquired during overseas
deployment.
The DOD's HIV Research program is a world leader in the study of
HIV genetic variation world-wide and in the development and testing of
new vaccines to be used against HIV strains anywhere in the world. The
DOD HIV Research program is moving forward with AIDS vaccine trials in
Thailand and is preparing for clinical trial of AIDS vaccines in Rakai,
Uganda, and Cambodia. Among other federally-supported HIV research
efforts, the DOD HIV Research program has the facilities, resources,
collaborations, and personnel to produce novel candidate AIDS vaccines
and test them in international locations.
ASTMH appreciates past Congressional support for military
infectious diseases research. In November, 1999, the long awaited
WRAIR/NMRC laboratory building opened in Silver Spring, Maryland. This
outstanding laboratory facility is now the focus of tropical medicine
research conducted by the Army and Navy. It is staffed by military and
civilian experts in tropical medicine. The WRAIR and NMRC supervise and
support the DOD's overseas laboratories.
The Society believes the military's overseas laboratories deserve
special mention. The U.S. Army and the Navy currently support medical
research labs located in five developing countries, including Thailand,
Egypt, Indonesia, Kenya, and Peru. These research laboratories serve as
critical sentinel stations alerting military and public health agencies
to dangerous infectious disease outbreaks and increasing microbial
resistance to drugs. The research stations are an important national
resource in the ongoing battle against emerging disease, and should be
strengthened with increased funding and increased opportunities for
collaborations with civilian scientists. The laboratories provide field
sites for testing of new drugs and vaccines, for performing basic
research, and for increasing our understanding of disease and the
spread of disease. The overseas laboratories strengthen collaborations
between U.S. and foreign countries, expanding our knowledge and
understanding of infectious diseases, and providing hands-on training
for both U.S. and local students and investigators, and for local
health authorities.
As the leader in tropical and infectious disease research, DOD
programs have been vital for the successful outcome of military
campaigns. It was the DOD research program that developed the first
modern drugs for prevention and treatment of malaria. The DOD
investment in malaria vaccine development is not only good public
health policy, but it also makes good sense from an economic
standpoint. Malaria is estimated to cause up to 500 million clinical
cases and up to 2.7 million deaths each year, representing 4 percent to
5 percent of all fatalities worldwide. Malaria affects 2.4 billion
people, or about 40 percent of the world's population. Tragically,
every 30 seconds a child somewhere dies of malaria. Specifically,
malaria causes an enormous burden of disease in Africa, and is
considered a primary cause of poverty.
Along with Venezuelan Equine Encephalitis, the DOD also developed
or supported promising vaccines for prevention of Rift Valley Fever,
Argentine Hemorrhagic Fever, Adenovirus disease in recruits, and
plague. Two of these vaccines (plague and adenovirus) are no longer
licensed in the United States. As a result of a significant outbreak in
Saudi Arabia and Yemen, the first epidemic outside of Africa, Rift
Valley Fever vaccine has become of interest to an important ally.
Spread of this disease to the United States is not out of the question,
since mosquitos capable of transmitting Rift Valley Fever are found in
the United States. Further development of these vaccines is an
important national priority.
Other notable advances accomplished by military experts in tropical
diseases working with corporate partners include the invention of
hepatitis A vaccine at WRAIR and its ultimate licensure based on
studies conducted at the U.S. Armed Forces Research Institute of
Medical Sciences (AFRIMS) in Bangkok; the discovery (during WWII), and
later licensure of Japanese encephalitis vaccine, based on studies
conducted at AFRIMS and WRAIR; and the discovery and licensure of
mefloquine and halofantrine for treatment and prevention of malaria.
WRAIR scientists reported the first successful cultivation of vivax
malaria. A significant accomplishment made by military scientists at
WRAIR and their corporate partners is the discovery of the first
prototype vaccine shown to be capable of preventing falciparum malaria.
Novel vaccines, such as a DNA vaccine for malaria, are being developed
under the leadership of scientists at the NMRC. Most recently,
licensure has been awarded for Malarone, a new drug for prevention and
treatment of malaria. Another anti-malarial drug, Tafenaquine, is in
advanced field trials with a corporate partner. With the certainty that
resistance to malaria drugs quickly appears, these drugs have a useful
lifespan of only about ten years. Replacements must be sought
continually.
Request: ASTMH urges a strong national commitment to the DOD
infectious disease research programs to accelerate the discovery of the
products that protect American soldiers and citizens at home and
abroad, and to improve global health and economic stability in
developing countries. The DOD's Military Infectious Disease Research
Program has been a highly successful program. ASTMH urges the
Subcommittee to make DOD infectious disease research a high priority in
the DOD budget for fiscal year 2002.

CONCLUSION

Our borders remain porous to infectious and tropical diseases,
including most recently the West Nile Virus, which was recently found
right here in Washington, DC. Other diseases still largely confined to
the tropics, like malaria, pose a major threat to American travelers
and especially to our military. In all military operations in the last
century where malaria is transmitted, including the Pacific Theater in
World War II, Vietnam, and Somalia, more casualties were caused by
malaria than by combat injuries. And with global warming, the
increasing resistance of insect vectors to insecticides, and the
increasing resistance of the malaria parasite to antimalarial drugs,
the range of malaria and other vector-borne diseases is expanding.
The ASTMH urges you to provide strong support for the DOD Military
Infectious Diseases Research Programs. Our nation's commitment to this
research is critically important given the resurgent and emerging
infectious disease threats that exist today. If we don't make these
important programs a priority, the health of our troops, as well as the
health of all Americans, will continue to be at risk; we will continue
to experience increased health costs; and infectious diseases will
flourish around the world, prolonging economic and political
instability in developing nations.
Thank you for the opportunity to present the views of the American
Society of Tropical Medicine and Hygiene, and for your consideration of
these requests.

Senator Stevens. Thank you very much, doctor. Are you
associated at all with prion disease now?
Dr. Burke. I am not.
Senator Stevens. Is your department?
Dr. Burke. I am not, although I do serve on a committee for
the Food and Drug Administration (FDA) that looks at those
issues.
Senator Stevens. Thank you very much.
We will now turn to Meg Kulungowski, please. We have
skipped one person. We have a Senator who wishes to be here
personally at that time.

STATEMENT OF MEG KULUNGOWSKI, SENIOR ISSUES SPECIALIST,
NATIONAL MILITARY FAMILY ASSOCIATION

Ms. Kulungowski. Mr. Chairman, Senator Inouye, thank you
for the opportunity to appear before you today. The message I
bring to you today is that the momentum begun with the actions
of the 106th Congress must be sustained in addressing the
critical issues facing our military families and their
communities. In my brief oral testimony I would like to
emphasize the issues of military health care, housing,
relocation reimbursements, military spouse employment
assistance, and full Survivor Benefit Plan (SBP) entitlements
for survivors of members who die on active duty.
Last year's Defense Authorization Act included many health
care provisions beyond TRICARE for Life, which the National
Military Family Association (NMFA) wants to ensure are fully
implemented. NMFA urges Congress and the Department of Defense
to work together to obtain an adequate, sustainable funding
level for the defense health program. This funding is needed to
sustain the ongoing functions of the program, to include the
maintenance and improvement of the infrastructure at military
treatment facilities, and to fully implement newly authorized
benefits.
We look to the housing privatization initiatives to help
expand the housing base at installations where the community
sector cannot meet the military families' need for adequate,
affordable housing in a safe neighborhood with good schools.
The privatization initiative will allow military construction
funds to be directed to overseas areas. Military families
overseas tell NMFA that the predominance of substandard, poorly
maintained housing is their number one quality of life concern.
Overseas installations do not have their own local
Congressional advocate. We ask this subcommittee to be the
advocate for families overseas and ensure adequate resources
for their communities.
Military families move on average of every 2.9 years, twice
as much as their civilian counterpart. A 1999 DOD survey of
permanent change of station moves found that service members
reported average out of pocket expenses of over $1,100 with
each move. NMFA believes military members must be compensated
at a more realistic level for their moving costs. Families will
continue to subsidize their military-directed moves if rates
for mileage, per diem, and temporary lodging expenses are not
raised to reflect today's costs.
The financial impact of a move is often exacerbated by the
loss of the spouse's employment. NMFA is encouraged by
initiatives coming from the DOD-U.S. Chamber of Commerce
military quality of life partnership that promote training,
education, and employment of spouses through corporate
partnering. However, this program still needs funding for its
startup and to guarantee its long-term stability.
Additionally, we hope that as legislation is crafted to
address the national shortage of nurses, teachers, and child
care providers, there will be provisions to include military
spouses in spite of their frequent relocations.
Lastly, I will briefly discuss the issue of SBP for active
duty deaths. Authorizing the Department of Defense to conduct
posthumous retirements could solve the issue of SBP for active
duty deaths. Senator Kay Bailey Hutchison is considering a bill
which would do just this. This would eliminate imminent death
retirements and the burden imposed on military medical
professionals asked to perform life-saving measures while the
necessary retirement paperwork is prepared.
Additionally, it would eliminate the disparity of benefits
paid to survivors if one member of an accident was killed
immediately and another lives long enough to be retired.
The U.S. armed forces are fortunate that the numbers of
active duty deaths each year are few, but the changes of
benefits to individual families would be significant.
We thank the subcommittee and the Congress for the
attention over the past 2 years to the quality of life issues
important to the readiness of the force and to military members
and their families. These actions have helped rebuild military
members' trust and to ease the crisis in recruiting and
retention. However, the stability of the military family and
community rests on the Nation's continued focus on the entire
package of quality of life components.
Again, Mr. Chairman, I thank you for this opportunity.
Senator Stevens. Thank you very much. We appreciate your
coming.
[The statement follows:]

PREPARED STATEMENT OF MEG KULUNGOWSKI

QUALITY OF LIFE ISSUES FOR MILITARY FAMILIES, APRIL 2001

Distinguished Members of the Subcommittee, the National Military
Family Association (NMFA) is honored to have the opportunity to discuss
the quality of life of military families. NMFA is grateful to the
Congress for continuing the efforts begun two years ago to end the
erosion in quality of life that has contributed to the military
Services' recruiting and retention challenges. Of particular importance
were:
--Provision for a 3.7 percent pay raise, payable January 1, 2001 and
for targeted raises for mid-grade enlisted personnel, effective
July 1, 2001
--Funding increases for the Basic Allowance for Housing with the goal
to eliminate average out-of-pocket costs by 2005
--Health care benefit improvements for active duty families such as
the elimination of co-payments for active duty family members
in TRICARE Prime, the addition of a Prime-like benefit for
active duty families in remote locations, and the addition of
school physicals as a TRICARE benefit
--Health care benefit improvements for the retiree population such as
the reduction in the catastrophic cap, the creation of a
pharmacy benefit for Medicare-eligible military beneficiaries,
and the restoration of the promise of lifetime care for
military retirees and their dependents with the creation of
TRICARE for Life.
--Funding to assist civilian school districts in educating military
children.
NMFA believes that the most important message we can bring to you
today is that the momentum begun with the actions of the 106th Congress
must be sustained in addressing the critical issues facing military
families and their communities--pay, housing, health care, family
support, and education for our children. The families we represent,
including our 120 installation representatives who report to us on a
regular basis, say they recognize the good that the recent improvements
will bring. They also tell us, however, that we are not out of the
woods yet. Several concerns continue to take their toll: a continuing
civilian/military pay gap, a decaying housing and workplace
infrastructure, ongoing deployments and high perstempo that increase
family separations, a health benefit that changes based on where one
lives and how much money is available for the system, and a military
move process that disrupts a spouse's career and a child's education
while frequently draining a family's savings.
Military Families Today--Who Are They?
The all-volunteer military today is predominantly a young, married
force with children. Currently, 55 percent of the military is married;
56 percent of the married population is between the ages of 22 and 29.
Studies show that military members tend to marry younger, begin to have
children at a younger age, and have larger families than their civilian
peers. Nearly one million children, or 73 percent of all military
children, are under age 11; 40 percent are five years of age or
younger. Approximately 6 percent of military members are single
parents, ranging from a low of 3 percent of Marines to a high of almost
8 percent of Army members. Eighty to ninety percent of all spouses are
in the labor force, including 87 percent of junior enlisted spouses (E-
1 to E-5).\1\
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\1\ Demographic information has been obtained from the Profile of
the Military Community: 1999 Demographics, prepared for the Deputy
Assistant Secretary of Defense for Military Community and Family Policy
by the Military Family Resource Center, available at
www.mfrc.calib.com.
---------------------------------------------------------------------------
Quality of Life Components for the Military Family Relocation
One of the primary challenges facing military families is the
frequency with which they move. Along with the death of a family
member, loss of a spouse, and natural disasters, moving and
unemployment rank among the top five stress producers in the population
as a whole. Military families move on average every 2.9 years; the
civilian average is twice that figure. No other employer moves its
youngest employees with the frequency that the military moves its
junior servicemembers.
Moving is a fact of life for military families. Unfortunately,
losing money whenever they move is just as predictable a fact for
military families. A 1999 DOD survey of Permanent Change of Station
(PCS) moves found that servicemembers reported average out-of-pocket
expenses of over $1,100 with each move. The average reimbursement for
reimbursable expenses was only 62 cents on the dollar; for junior
enlisted members, only 27 cents. These rates do not include the loss of
either the spouse's job or the servicemember's second job that helped
the family make ends meet. They do not include the extra expenses such
as house hunting trips that are not reimbursed.
NMFA urges DOD and the Services to build on the information
gathered from the current array of pilot move projects to institute a
more user-friendly move process. Because we believe the pilots have the
potential to provide much-needed information on how to fix the move
process, we were greatly disturbed by press reports of the Navy's pull-
out of the pilot projects. This is too important an issue for families
and too much information is being accumulated through these pilots to
abandon them now.
NMFA believes military members must also be compensated at a more
realistic level for their moving costs. Legislative changes in the
fiscal year 2001 NDAA addressed some concerns by authorizing temporary
lodging expenses for enlisted members going to their first duty
station, increasing the dislocation allowance for E-1 to E-4s with
dependents to the E-5 rate, and authorizing servicemembers on PCS moves
to receive advance payment for their travel allowances, thus enabling
them to avoid incurring large credit card debt. The families sent to
locations with costly pet quarantines are also grateful for the
authorization of a $275 allowance to help cover quarantine costs. We
believe, however, that families will continue to foot the bill for too
many legitimate reimbursable expenses unless the rates for mileage, per
diem, and temporary lodging expenses are raised to reflect today's
costs. These rates have not been adjusted since the mid-1980s and thus
do not reflect families' actual travel and lodging costs.
Another unique aspect of a military move is the unpredictability.
NMFA hears from families about orders being changed or not issued until
the eleventh hour. In the 1999 PCS survey, 20 percent of the
participants reported receiving less than 30 days notice before the
move and about 11 percent reported having a change in the assignment
after getting their initial orders. Last minute switches place an
additional burden on the spouse who typically is the one to research
schools and neighborhoods, find a new job, and reassure the children
that they will indeed fit in at the new location. Although online
relocation information provided by the Services may help reduce anxiety
and enable families to prepare for the move, NMFA believes the
personnel system still has room for improvement in its ability to
forecast assignments, particularly follow-ons from unaccompanied tours.

Spouse Employment and Readiness
Another fallout from the frequent military move cycle is the cut in
family income due to the military spouse's loss of employment. The loss
of the spouse's income at exactly the time the family is facing
hundreds of dollars in additional expenses is exacerbated when a spouse
is unable to collect unemployment compensation due to provisions of
state laws. In many states, the military spouse is not eligible to
collect unemployment compensation when the change of jobs is due to the
servicemembers' change of duty location. States frequently determine
that the decision of a military spouse to move with the servicemember
is a ``voluntary quit'' and thus they deny the benefit.
``Trailing spouses'' face other difficulties after the move
experience is over and boxes unpacked. Despite the existence of highly
touted DOD and Service spouse employment programs, many spouses still
report problems finding jobs commensurate with their skill and
experience levels or even any job at all. In 1999, 46 percent of
installation commanders reported that availability of jobs for spouses
was a problem in their communities. Because of the high costs of the
military move, many spouses are forced to take the first available job
just to make ends meet, regardless of whether or not it furthers their
career. When the spouse's earnings suffer as a result of the military
member's service, the member's career intentions decline. The prospect
that the spouse would have to give up a good job--found with
difficulty--and start over again after the next move may prompt a
family decision that the servicemember should leave the military.
NMFA has heard from spouses for years about the problems they faced
in navigating the DOD personnel system. In recent testimony before the
Defense Subcommittee of the Senate Appropriations Committee, the Chief
Nurses of both the Army and Navy discussed their program's difficulties
with the personnel system in ways very familiar to military spouses.
According to BG William T. Bester, Chief of the Army Nurse Corps,
``Government hiring practices are archaic, cumbersome, and threaten
human resource availability. Wages are set by law and not easily
adapted to market forces. We must have the flexibility to develop and
implement accession programs that meet the current critical need for
the swift hiring of highly qualified candidates.'' If the Army Nurse
Corps can't work the system, how can we expect young military spouses
to navigate their way?
While still having work to do on its own personnel system, DOD has
made strides in seeking corporate partnerships to establish training
and employment programs for military spouses. NMFA applauds the
department's efforts to establish procedures to use scholarships and
child care subsidies from industry for military spouses. The department
is also investigating how to help spouses obtain certification, whether
in a trade or a professional field. DOD has eased one group of military
spouses' job placement difficulties over the past year: DOD schools now
have policies in place that encourage the hiring of qualified military
spouses for open teaching positions.

Education for Military Children
Military children are our nation's children. Whether they attend
Department of Defense schools, civilian public schools, private
schools, or are home schooled, they deserve a quality education.
Today's military force is an educated force and military members have
high expectations for their children's education. More are accepting or
rejecting assignments, or even deciding to leave the military, based on
perceptions about the quality of education their children will receive
at prospective duty stations.
Even when transferring to schools with the best reputations,
military children often face hurdles in getting placed in proper
programs, becoming involved in extracurricular activities, and
transferring grades and credits for graduation. Their parents are often
frustrated because they do not understand how to navigate the new
system's procedures and policies in order to provide proper input on
their children's education. The increase in state accountability
systems and high stakes testing, each with different standards, can
also make transferring from school to school difficult for military
children. NMFA applauds DOD's creation of the Educational Opportunities
Directorate to address the needs of all military children wherever they
go to school. The Directorate is currently conducting a series of
roundtables in states with high military populations to raise awareness
of issues affecting the mobile military child among parents, state and
local educational leaders, and installation officials. The military
Services are dedicating more efforts to improve communication with
local school districts, institute partnerships between units and local
schools, and provide assistance for parents in navigating school
district chains of command to obtain the proper educational services
for their children.
NMFA thanks this Subcommittee for its support of schools operated
by the Department of Defense Education Activity (DODEA). Because
approximately 80 percent of military children attend civilian public
schools, however, NMFA is also grateful to the Congress for its support
of quality education for these children and their civilian classmates.
Appropriations for the DOD Impact Aid Supplemental Funding helps those
districts most affected by the military presence.

Child Care
In ten years, the military has transformed its child care system
from one of the nation's worst to what has been called a model for the
nation. A military force often asked to go in harm's way needs to be
able to go to work and not worry about what is happening to their
children.
Although we believe that families' cost for military child care are
still reasonable given the quality found in military child development
centers, NMFA does see some challenges for DOD in meeting child care
needs without breaking the bank. DOD must continue to build new child
development centers where needed, and increase efforts to recruit and
train more family care providers. Family day care providers are an
alternative for families when child development centers are full or for
military members needing after-hours care. The fiscal year 2000 NDAA
allowed DOD to ``provide financial assistance to an eligible civilian
provider of child care services or youth programs.'' DOD and the
Services need to fully utilize this authorization to increase the
availability of child care.

Military Family Health Care
Military families appreciate the health care improvements contained
in the fiscal year 2001 NDAA and thank the Congress for addressing many
of the issues they have raised about the military health care benefit.
By restoring the promise of lifetime health care to Medicare-eligible
military beneficiaries through TRICARE for Life and the senior pharmacy
program, Congress also told current servicemembers and their families
that their own service to the nation is appreciated and that the
government will continue to show it values that service even after the
member retires. By eliminating co-payments for active duty family
members in Prime and by establishing a Prime-like benefit for all
remotely-assigned active duty family members, you moved us closer to
achieving a uniform benefit.
However grateful we are for the important benefit improvements in
the NDAA and for the opportunity for beneficiary input provided by DOD,
NMFA remains apprehensive about the estimated $1.4 billion deficit in
this year's Defense Health Care budget. In recent testimony before the
Defense Subcommittee of the House Appropriations Committee, the Service
Surgeons General stated that their military treatment facilities would
have to cut back on operations this summer unless supplemental funding
was provided. They also discussed the significant repair and
maintenance backlogs and the infrastructure needs of their facilities.
Dr. Jared Clinton, Acting Assistant Secretary of Defense for Health
Affairs, testified that the elimination of co-payments for active duty
families and the expansion of the TRICARE pharmacy benefit to Medicare-
eligible military beneficiaries are on target for their April 1
implementation and the implementation of TRICARE for Life as a second-
payer to Medicare will begin on schedule October 1. Dr. Clinton also
noted, however, that implementation of several benefits that became
effective with the passage of the NDAA may have to be delayed because
of lack of funding. These benefits include the reduced catastrophic
cap, the school physical benefit, and the reimbursement for travel
expenses for active duty families in TRICARE Prime who must travel over
100 miles for specialty care.
NMFA is grateful for the fiscal year 2000 NDAA Congressional
mandate and DOD's response in implementing the new Women, Infants and
Children Overseas (WIC-O) Program. Since January 2001, the TRICARE
Management Activity with the cooperation of the Defense Commissary
Agency and command and local installation family support personnel has
implemented WIC-O in 5 overseas areas. After years of hearing from
military families who lost access to this federally-funded, but state
run, program because the military was sending them overseas, NMFA is
excited that this valuable nutrition program is now available to at
least some families. Although DOD has begun plans to implement a second
phase of the program at 12 more sites by the end of the summer, we are
concerned that funding shortfalls in the Defense Health Program, the
funding agent for WIC-O, will delay complete implementation until
sometime next fiscal year.
Beneficiaries rarely complain about the quality of care they
receive in the military health system. Many do complain about accessing
appropriate care in a timely manner. The DOD Healthcare Quality
Initiatives Review Panel, a federal advisory panel chartered by
Congress in Public Law 105-174 to assess quality initiatives in the
military health system, recently sent its report to Congress. In its
chapter on Beneficiary Communications, the panel concluded: ``To
beneficiaries, the issue of quality of healthcare cannot be separated
from a discussion of access and the robustness and uniformity of
healthcare benefits.'' Although the improvements in TRICARE procedures
and the benefits added in the NDAA will improve access for many
beneficiaries, program-funding issues could provide additional
constraints.
NMFA urges Congress and DOD to work together to obtain an adequate,
sustainable funding level for the Defense Health Program. This funding
not only is needed to provide the newly-implemented benefits, but also
to sustain the ongoing functions of the program, implement WIC-O at all
locations overseas, and maintain and improve the infrastructure in
military treatment facilities (MTFs).

Supporting Families for Readiness
As NMFA has testified in the past, a variety of factors place and
keep young military families on the financial edge:
--Frequent PCS moves
--Transportation expenses
--Out of pocket housing costs
--A lack of comprehensive financial education, either before the
member enters the military or for both servicemember and spouse
once in the military, making the family more vulnerable to
consumer scams, unable to budget properly, or make the best
spending and saving decisions
--Poor access to affordable credit
--Frequent deployments or the threat of deployments that cause either
a loss in the family's second income or increase child care
costs
--The consequences of recruiting someone with a family and expecting
them to live on a salary more appropriate for a single person
in the barracks.
NMFA believes that DOD and the Services must provide young families
with the tools they need to handle the disruptions so common in
military life so that the servicemember can perform the mission. We
encourage outreach efforts by installation family service personnel and
other program staff to reach young families unfamiliar with both the
military lifestyle and the benefits that come with service. For
example, we applaud the efforts of family service and commissary staff
to educate both single servicemembers and young families about the
value of the commissary benefit by holding special information events
and commissary tours. The Defense Commissary Agency's best value
program and other initiatives to reduce prices have resulted in average
customer savings of 29 percent.
NMFA also commends the increased DOD and Service efforts to improve
both the amount of and quality of financial education offered to
servicemembers. We are encouraged by Service interest in including
spouses in financial education and teaching them how to fulfill their
responsibilities for managing family finances when the servicemember is
deployed.
As operations, deployments, and training missions continue at a
high pace, the military family's lifeline--its community--feels the
strain. Family services are important even to an installation not
pressured by a high perstempo. Family centers, military chaplains, and
installation mental health professionals help ease the transition to
the military environment for newly arrived families, provide financial
counseling and other services, offer programs for families in the
Exceptional Family Member Program, and sponsor meaningful activities
for military youth, especially in the vulnerable preadolescent years.
Additional services set up to support families when units deploy
include counseling services, email and video teleconferencing centers,
and special family activities. These services both ease the strain of
deployment for families left behind and reassure the servicemember that
the family has a support network on which to call.
NMFA notes that the services have done a magnificent job in
supplying e-mail communication, education programs, and a wide array of
Morale, Welfare, and Recreation (MWR) programs for forward-deployed
units. Some of those servicemembers have deployed from installations in
Europe. Their family members left behind at many of those installations
tell NMFA of cutbacks in MWR services in their communities because of
tight budgets or the inability of program managers to hire employees at
current pay scales. USAREUR Commander General Montgomery Meigs spoke to
the press last year of problems funding quality of life programs in his
communities: ``In USAREUR, we fund training at 100 percent, and frankly
we don't have enough for quality of life.'' Families talk of
unpredictable or shortened hours at bowling alleys, swimming pools, and
other recreational facilities used heavily by military children. While
families understand the importance of quality programs for deployed
servicemembers in Bosnia, they ask that money be found so their
commanders can also help the spouse in stairwell housing in Germany
trying to keep the children occupied until the deployment is over.
What about the ``ones and twos?''
Although family support programs have generally worked well when
whole units are deployed, NMFA continues to hear from the families of
the ``ones and twos''--the active duty and reserve component members
deployed singly or in small groups or who are assigned overseas for a
year-long unaccompanied tour. These families often do not have a
readily available support network. The lucky families live on an
installation, with an ongoing relationship with a local unit, when the
servicemember deploys. Many others, however, find themselves isolated
in a civilian community without access to military support networks.

Reserve Family Support
Men and women of the National Guard and Reserve contribute more
than 13 million duty days to missions and exercises. Ten years ago when
reserve forces had about 22 percent more personnel, they averaged
approximately 1 million duty days. Just like their active duty
counterparts, the Guard and Reserve are doing more with less. The
integration of reserve components into the Total Force includes their
families. Now more than ever, reserve component families are dealing
with extended overseas deployments and for some on a fairly continual
basis.
Another unique aspect of family support in the reserve component is
the geographic dispersion of the members and their families. Unlike the
active component divisions that are usually co-located on one
installation, most reserve component divisions are spread over many
states. The family does not usually have the military community support
or even the recognition in their civilian community that the
servicemember is deployed. In these cases, truly, ``an ounce of
prevention is worth a pound of cure.'' Reserve family members'
awareness of their rights and benefits before the deployment and how to
access information and support during deployment are essential to the
unit's readiness.

Survivors' Benefits in Active Duty Deaths
Although most active duty family members do not dwell on the
tragedies that can occur to servicemembers in the line of duty, these
incidents do happen and focus attention on inequities in the provision
of survivors' benefits. The current benefits for survivors of active
duty deaths include Dependency and Indemnity Compensation (DIC)
payments from the Department of Veterans Affairs and Social Security
survivors' benefits. If the servicemember had over 20 years service,
the survivors also receive Survivor Benefit Plan (SPB) benefits, which
are 55 percent of what the members' retired pay would have been. This
is a valuable benefit that NMFA worked for years to achieve.
The problem in the provision of benefits comes when servicemembers
not eligible for retirement are involved in fatal incidents. If the
servicemember is only one month shy of retirement eligibility, for
example, and is killed instantly, the surviving spouse does not receive
SBP. If, however, the servicemember lived long enough to be medically-
retired, the spouse would receive SBP. This difference in the way
benefits are determined can mean the survivors of two members with the
same rank and length of service killed in the same accident will
receive different benefits simply because one is killed instantly and
one lives just long enough to be medically-retired. NMFA believes that
the Services should be allowed to award posthumous retirements so that
all survivors in active duty deaths may be able to receive SBP.

Housing: a 3-Prong Approach: BAH, Privatization, Military Construction
Families living off-base depend on the Basic Allowance for Housing
(BAH) to acquire quality, affordable housing in safe neighborhoods
(with good schools) at a reasonable commute from the installation. BAH
is the first of DOD's three-prong approach to addressing the housing
needs of servicemembers and their families. NMFA thanks Congress for
the repeal of the mandate requiring servicemembers to pay 15 percent of
their housing costs out of pocket. We also applaud the beginning of
funding toward a five-year plan to eliminate out of pocket housing
costs.
NMFA was pleased with DOD's efforts this year to improve the
accuracy of the housing cost surveys used to determine BAH.
Installation commanders and their housing officials worked with the DOD
contractor to identify appropriate neighborhoods for servicemembers and
their families and obtained additional information on utility rate
increases in the late fall before making final BAH calculations. We do
remain concerned, especially given recent utility hikes, that BAH may
need to be more flexible to respond to cost changes that could have a
negative impact on family finances.
Although the plan to eliminate out of pocket housing costs is
admirable, NMFA fears that the rhetoric may not always match reality.
BAH is based not only on the costs of renting and paying utilities on a
dwelling, but also on a DOD standard set for each rank. The standard
used for determining the rent for an E-5, for example, is a two-bedroom
townhouse; therefore, an E-5 with three children who is renting a
three-bedroom single-family detached house will still have out of
pocket housing costs even after the buy-down is complete in 2005. NMFA
believes the DOD housing standard is not commensurate with current
civilian housing standards, on-base housing standards, or with the
level of responsibilities shouldered by military personnel. For
example, the current standards provide that among enlisted
servicemembers, only E-9s receive BAH to cover the cost of renting a
three-bedroom single-family detached house. If the standard is left
unchanged, servicemembers will probably continue to have out of pocket
housing costs despite the well-publicized promises to the contrary. In
the fiscal year 2001 NDAA, Congress raised the standard slightly for
the most junior enlisted, E-1s to E-3s, to a level between the E-3 rate
(two bedroom apartment) and the E-4 rate (two-bedroom townhouse). NMFA
urges the Congress to direct DOD to do an across-the-board review of
the standard's appropriateness across all ranks.
Since the law creating the housing privatization authorities was
first passed, NMFA has regarded the concept of privatization, the
second prong in DOD's housing approach, as perhaps the only way to meet
the housing needs of military families in a timely manner. We know the
need. We have seen and lived in the houses that are a part of the
repair and renovation backlog of almost 200,000 units worldwide. We
know how far this housing is from today's standards, especially for our
special needs family members. We have seen the housing available
outside the gate in many communities. Families who cannot get into base
housing end up living in slum conditions because they cannot afford the
transportation necessary to live farther from the installation. In
recent testimony, Randall Yim, Deputy Under Secretary of Defense
(Installations), stated that DOD would need $16 billion and more than
30 years to eliminate the backlog using traditional military
construction funding. Using privatization would substantially solve the
problem in much less time, although probably not by DOD's target date
of 2010.
Although we see the need for the infusion of private capital to
revitalize military housing, NMFA has watched early privatization
efforts with some concerns:
--Where are the standards for oversight of the development process
and the outcome measures to gauge a project's long-term costs
and benefits?
--Who provides oversight of housing management and maintenance?
--What is the role of the installation commander?
--How is community input sought and used in the process?
--Who is the advocate for family members living in the housing?
--How are the projects' effects on servicemembers' budgets and
community services evaluated and calculated into project plans?
--Where is the priority for preserving the things that make a
``military community'' strong when the military no longer
``owns'' the houses in that community?
Although we understand the need for project flexibility to meet the
needs of local installations and communities, NMFA asks Congress to
continue its oversight of the privatization process and work with DOD
and the Services to establish a common core set of standards and
outcome measures for privatization projects.
NMFA is gratified that some attention is being paid to the needs of
the community, both on and off the installation, when new housing is to
be built. Changing transportation needs, recreational needs, and child
care options should be part of the decision-making process with each of
these projects. The educational needs of military children and the
local school district's ability to meet those needs are of paramount
importance to a successful privatization initiative. We are encouraged
that service officials now can articulate the link between the
ownership of the land and federal Impact Aid funding for schools
serving military children. Impact Aid, however, provides money school
districts use to pay the operating expenses--teachers' salaries,
utilities, and textbooks--for educating these children. It will not
cover the cost of building the school that is needed when the
installation's housing stock is increased under privatization
arrangements.
We also caution installation leaders to be aware of some unintended
consequences of privatization on both family budgets and school
district funding. The law requires that servicemembers living in
privatized housing be paid BAH, which is then turned over to the
developer as rent. Eligibility for safety net programs administered by
the U.S. Department of Agriculture such as food stamps; the Women,
Infants, and Children (WIC) nutrition program; and free and reduced
price school lunches is based on a family's total income. When an
installation's housing is privatized and servicemembers start receiving
BAH, the total income as indicated on the Leave and Earnings Statement
(LES) seems to have increased, even though the BAH is turned over to
the developer. Many servicemembers then lose eligibility for safety net
programs. Press reports state, for example, that two-thirds of the
families receiving food stamps on Fort Carson lost their eligibility
once the housing was privatized. When families lose eligibility for
free and reduced school lunches, their local school can also lose other
funding. Federal Title 1 and E-rate technology funding as well as state
poverty funding is based on a school's poverty rate, which in turn is
based on the percentage of children receiving free and reduced lunches.
Fountain-Fort Carson District 8, a district of approximately 4,900
children, reports that it received $400,000 less in funding from these
sources in the year after installation housing was privatized and
servicemembers on Fort Carson began receiving BAH.
NMFA believes that the third prong of housing improvement, the use
of military construction funds, must remain as a viable, well-funded
option. Some areas, either because of the location, the local economy,
or unique needs of the installation, will continue to require military
construction funds to build or renovate family housing. It is
imperative that these areas receive the funding they need, not just for
housing but also for the underlying infrastructure. A recent article in
the Honolulu Advertiser (2/26/01) described military housing challenges
in Hawaii, but also highlighted extensive improvements. Navy junior
enlisted families praised new housing featuring wooden cabinets,
ceramic tile entryways, and steel framing to battle termites.
Unfortunately, this wonderful new housing was built on an old worn-out
sewer line. One sailor described his new home as ``great,'' but said:
``What we don't like is it is the same old neighborhood and the sewer
lines are 30 years old. They back up.''

The Military Community--Ready to Meet the Mission
Members of the uniformed services are doing the nation's work. They
ask the nation to give them the tools they need to be ready for that
work: equipment, training, and leadership. They also look to the nation
for recognition that their job is not a nine to five one and that it
involves their families in ways few other jobs demand. Military members
and their families want the nation to understand that the military
family drives the retention decision, that the family's quality of life
is a readiness requirement, and that even a community as strong as the
military community will fall apart if it is asked to do too much with
too little for too long. With gratitude for your help in the past, NMFA
asks you to maintain your support for the military families we
represent. The military community is not just bricks and mortar. It is
the stabilizing force that enables military families to survive and
thrive. Your continued help is needed to keep that community strong.

Senator Stevens. Dr. Boudjouk. We are informed that the
Senator cannot be here because of a conflict and would be
pleased to have your testimony now, sir.

STATEMENT OF PHILIP BOUDJOUK, Ph.D., CHAIRMAN,
COALITION OF EPSCoR STATES

Dr. Boudjouk. Thank you very much, Mr. Chairman. Mr.
Chairman, members of the committee, my name is Philip Boudjouk.
I am a professor of chemistry and Vice President for Research
at North Dakota State University. I served as the Project
Director for the Experimental Program to Stimulate Competitive
Research (EPSCoR) program in North Dakota from 1992 to 2000. I
currently serve as Chairman of the Board of the Coalition of
EPSCoR States.
Thank you for the opportunity to testify today on behalf of
the 19 States and Puerto Rico that comprise the coalition
regarding the Defense Department's basic scientific research
program and the defense experimental program to stimulate
competitive research (DEPSCoR). Next month the DOD will make a
site visit to Hawaii to evaluate its eligibility for DEPSCoR
and Alaska is now in its second year as an EPSCoR State.
I wish to commend the subcommittee for its strong support
for funding DOD S&T programs. The Coalition of EPSCoR States
urges you to maintain a stable investment in the Department's
S&T efforts. The coalition would like to be associated with the
statement of Dr. Harvey Ko, who testified earlier this morning
on behalf of the Coalition for National Security Research.
EPSCoR is a catalyst for change to assist States which
historically had not participated fully in Federal research and
development funding. It is widely viewed as a model Federal-
State partnership involving several Federal agencies: DOD,
National Science Foundation (NSF), National Institute of Health
(NIH), DOE, National Aeronautics Space Administration (NASA),
EPA, and United States Department of Agriculture (USDA). Every
Federal dollar is matched between 50 cents to more than a
dollar by State funding and technically every dollar provided
to EPSCoR State projects leads to four dollars of nationally
competitive Federal funding.
The defense EPSCoR program contributes to the States' goals
of developing and enhancing their research capability. Research
is funded only if it is in areas important to national defense.
In North Dakota 24 DEPSCoR projects in science and engineering
have been funded since 1994. It is a true partnership between
DOD, the State of North Dakota, and the universities involved.
We have DOD-sponsored projects in logistics, database
development, encryption science, and a variety of materials-
based programs that include anti-corrosion studies for military
aircraft and the development of semiconductor materials
composed of quantum dots, particles less than one ten billionth
of a meter. We will embed these nanoparticles in polymers to
make a new class of materials called nanocomposites.
The sky is the limit here. One could say that the smaller
the particle the larger the potential for scientific and
technical answers. Mr. Chairman, this is a very exciting new
area of research and it will provide our military with new war-
fighting capabilities for the twenty first century.
DEPSCoR is a wise and worthwhile investment of scarce
public resources. The coalition recognizes the very tight
fiscal constraints the subcommittee faces in the new era of a
balanced Federal budget. But given the impact that the DEPSCoR
program is having in our States, we respectfully request that
you provide $25 million for the Defense EPSCoR program for
fiscal year 2002.
Mr. Chairman, the Coalition of EPSCoR States supports the
Defense Department's basic research programs, functions 6.1 and
6.2. It is essential that Congress ensure that research and
technological advances in support of our military are not
eroded because of the lack of adequate funding for DOD's basic
and applied research. We strongly endorse recommendations that
Congress provide $10 billion to DOD science and technology
programs for fiscal year 2002.
Mr. Chairman, it was at this hearing a year ago that you,
referring specifically to nanotechnology, urged States like
Alaska and North Dakota to get on the train before it leaves
the station, so to speak, and bring our resources to bear on
the needs of DOD in this vital area. In North Dakota, with the
urging and assistance of Senator Dorgan, we took that advice to
heart and formed a partnership with the University of Alaska in
Fairbanks, North Dakota State University, DARPA, and the
Defense Microelectronics Agency to launch a joint effort to
meet DOD needs in the area of ultra-low power sensors for
battlefield applications.
But DOD is only part of this new team. Also included are
three private sector partners--Alien Technology, Northrop
Grumman, and Superconducting Technologies, Incorporated--that
are providing new technologies critical to the next generation
of sensors.
Mr. Chairman, I have in my hand a vial containing thousands
of computers. You see, each one of these particles that are
suspended in water, that look no more than the size of a fleck
of pepper, each one of those particles is a computer chip with
the capacity to hold the entire history of a piece of
equipment, to sense chemicals in the air, or store a program
that can enhance, confound, or make a weapon obsolete in an
instant.
In the partnership I mentioned, we are engaged in using a
new technology that allows us to place millions of these chips
exactly where we want them.
[The statement follows:]
Prepared Statement of Dr. Philip Boudjouk
Mr. Chairman and members of the Subcommittee, I thank you for the
opportunity to submit this testimony regarding the Defense Department's
basic scientific research program and the Defense Experimental Program
to Stimulate Competitive Research (DEPSCoR).
My name is Philip Boudjouk. I am a Professor of Chemistry and Vice
President for Research at North Dakota State University. In addition, I
am Chairman of the Board of the Coalition of EPSCoR States. I served as
the Project Director for the EPSCoR program in North Dakota from 1992-
2000. I am here today to speak in support of funding for the Defense
Department's Experimental Program to Stimulate Competitive Research
(EPSCoR). This statement is submitted on behalf of the nineteen states
and Puerto Rico that participate in EPSCoR \1\.
---------------------------------------------------------------------------
\1\ Alabama, Alaska, Arkansas, Idaho, Kansas, Kentucky, Louisiana,
Maine, Mississippi, Montana, Nebraska, Nevada, North Dakota, North
Dakota, Puerto Rico, South Carolina, South Dakota, Vermont, West
Virginia, and Wyoming.
---------------------------------------------------------------------------
The Coalition of EPSCoR States recommends that Congress appropriate
$25 million to the Defense Department's budget for the Defense
Experimental Program to Stimulate Competitive Research in Program
Element Number PE 61114D. The Coalition also supports the Department's
budget request for basic research, of which the Defense EPSCoR program
is a small, but significant, part.
The Coalition wishes to be associated with the statement of Dr.
Harvey Ko who testified earlier this morning on behalf of the Coalition
for National Security Research (CNSR). This Subcommittee has long
demonstrated its strong support for funding Defense Department science
and technology programs. These are programs that have produced the
research and innovation that have contributed so much to ensuring that
our fighting men and women have the best available systems and weapons
to support them in executing their national defense missions.
Fundamental research and development efforts in our universities and
laboratories produce significant benefits for the people in the field
and on the front line. The Coalition of EPSCoR States urges you to
maintain a stable investment in the Department's S&T efforts.
EPSCoR is a research and development program that was first
initiated by the National Science Foundation. Through a merit review
process, EPSCoR is improving our Nation's science and technology
capability by funding research activities of talented researchers at
universities and non-profit organizations in states that historically
have not received significant Federal research and development funding.
EPSCoR helps researchers, institutions, and states improve their
research capabilities and quality in order to compete more effectively
for non-EPSCoR research funds. EPSCoR is a catalyst for change and is
widely viewed as a ``model'' Federal-state partnership.
Based on the positive results of the NSF program, Congress created
EPSCoR programs in six additional Federal agencies. One of these is the
Defense Department. The individual agency EPSCoR programs, much in the
same way as the NSF EPSCoR, help researchers and institutions in
participating states to improve the quality of their research so they
can compete for non-EPSCoR research funds. The Federal-wide EPSCoR
effort funds only merit-based, peer reviewed programs that work to
enhance the competitiveness of research institutions and increase the
probability of long-term growth of competitive funding.
EPSCoR relies heavily on state involvement and participation,
including non-Federal matching funds. Due to the Federal/state
partnership upon which EPSCoR relies, EPSCoR is often considered a
model program, and is a wise use of taxpayer funds during these
difficult fiscal times.
The Defense EPSCoR (DEPSCoR) program contributes to the states'
goals of developing and enhancing their research capabilities, while
simultaneously supporting the research goals of the Department of
Defense. DEPSCoR grants are based on recommendations from the EPSCoR
state committees and the Department's own evaluation and ranking.
Research proposals are only funded if they provide the Defense
Department with research in areas important to national defense.
In my own experience, the North Dakota State EPSCoR program set
forth criteria that encouraged collaboration with Defense Department
scientists and engineers prior to the submission of my proposal to the
DEPSCoR program. This motivated me to establish contacts and
collaborative relationships with DOD researchers on two important
projects: Navy sponsored research on nanomaterials, i.e., particles
smaller than one-billionth of a meter, and Air Force sponsored research
on corrosion. Because of these initial contacts, I was also able to
develop meaningful relationships with other researchers in academia and
industry that have helped me establish my research in both areas. The
initial investments have paid off in North Dakota.
Several DOD supported researchers, with critical help from DEPSCoR,
have formed a center that focuses its efforts on corrosion, targeting
specifically, corrosion problems of aluminum alloys found in the C/KC-
135 transport and F-22 fighter planes. This center has strong support
from the Department of Defense and private industry. We are now
marshalling our resources to form a center that is directed to
advancing the knowledge base and applications of nanomaterials.
DEPSCoR was originally authorized by Section 257 of the National
Defense Authorization Act of 1995 (Public Law 103-337), which states
that the Defense EPSCoR program's objectives are to: enhance the
capabilities of institutions of higher education in eligible states to
develop, plan, and execute science and engineering research that is
competitive under the peer-review systems used for awarding Federal
research assistance; and increase the probability of long-term growth
in the competitively awarded financial assistance that universities in
eligible states receive from the Federal Government for science and
engineering research.
In fiscal year 2001 the Defense Department issued an announcement
of a competition under the aegis of the Defense EPSCoR program. A total
of 224 projects were received from the 18 states eligible to
participate in DEPSCoR. Following review of the individual projects by
the appropriate research office (the Army Research Office, the
Ballistic Missile Defense Organization, the Office of Naval Research,
or the Air Force Office of Scientific Research), 63 projects were
selected for funding with $18.7 million made available in fiscal year
2001. The average award was $298,000.
Let me now tell you something about our program in North Dakota.
Twenty-five DEPSCoR projects have been funded in North Dakota since
1994. The projects were developed by North Dakota science and
engineering researchers in collaboration with DOD program officers to
address topics critical to defense readiness and capabilities. The
program is a true partnership between DOD, the State of North Dakota,
and the universities involved. The research topics cover a wide
spectrum of issues important to the DOD mission. We have DOD sponsored
efforts in logistics, database development, encryption science, and a
variety of materials-based programs.
For example, one of my projects has led to a very safe and low
temperature method of production of semiconductor materials such as
gallium arsenide, tin sulfide, and tin selenide in a new and useful
form, quantum dots, i.e., less than one ten billionth of a meter.
Semiconductors in this form open the door to a broad range of useful
properties. We shall be seeing these ``nanomaterials'' in all phases of
our lives where electronic equipment is important: from very sensitive
optical detectors to micro lasers to vanishingly small transmitters. In
North Dakota, we are now imbedding these incredibly small particles in
polymers to develop an entirely new class of polymeric materials,
nanocomposites. The sky is the limit here. One could say that the
smaller the particle, the larger the potential for scientific and
technical advances.
Mr. Chairman, this is a very exciting new area of scientific
research. It can really change the way our world will be in the future
and it will provide our military with significant new war-fighting
capabilities for the 21st Century. The Department of Defense is at the
forefront of this research and DEPSCoR supported researchers are
playing an important role in maintaining our Nation's leadership in
this vital area. Indeed, Mr. Chairman it was at this hearing a year ago
that you urged EPSCoR states to ``get on this train before it leaves
the station'', so to speak. In North Dakota, we took that good advice
to heart and formed a partnership with the University of Alaska in
Fairbanks, DARPA and Defense MicroElctronics Activity (DMEA), to launch
a joint effort to meet DOD needs in the area of ultra low power sensors
for battlefield applications.
In another important area of research supported by the Defense
Department's EPSCoR program, corrosion science, several of our
researchers have made significant advances in developing new testing
methods to detect corrosion in the earliest possible stages and in
making new conductive polymers that ``short circuit'' the corrosion
process. A center has been formed at North Dakota State University and
has already succeeded in obtaining significant financial support from
industry and the Defense Department. We have established new
collaborations with Wright Patterson Air Force Base, the University of
Dayton Research Institute and Tinker Air Force Base that keep our
efforts focused on critical projects. At this time we are dedicating
substantial resources to the corrosion problems associated with the C-
135 transport.
The partnership concept extends also to our interactions with the
Federal agencies. Joint development of the Defense EPSCoR and other
EPSCoR program goals and objectives will ensure that the program
achieves its mission of stimulating competitive research. Indeed, given
the buy-in and participation by so many constituencies, EPSCoR is a
good example and model for Federal-state partnerships in science and
technology.
In addition to these projects in North Dakota, I would like to
share with you a few examples of DEPSCoR funded research in other
States:
--An Assistant (now Associate) Professor of Physics at the University
of Kansas, Dr. Judy Wu, was funded by the Air Force Office of
Scientific Research (AFOSR) to perform research on high
temperature superconducting thin films. As a result of that
DEPSCoR support, she has developed methods for coating mercury-
based high temperature superconductors onto oxides and metals
in processes that have led to two United States patents, and
one U.S. patent pending. Superconducting coatings of these
materials, that have transition temperatures above 130K onto
oxides, can be used for superconducting microwave
telecommunication devices of superior performance in terms of
low loss, high resolution, and lightweight. These properties
have recently been demonstrated on small-scale microwave
devices. Superconducting coatings of these superconductors onto
metals can be used to form superconducting cables that can be
used for power-related applications including low-loss/high
power generators, transmission cables, electric motors, and
high-field magnets.
--A land mine detector developed by Dr. James Sabatier, a research
scientist at the University of Mississippi based National
Center for Physical Acoustics, has passed a second round of
military tests, making it the most accurate mine-hunting system
in the U.S. Army's inventory. The system, via sound waves and
laser beams which scan the ground's surface to detect and
identify vibrational patterns produced by buried mines,
detected 95 percent of the hidden antitank mines with only one
false alarm and 100 percent of the buried antipersonnel mines
with four false alarms.
--Dr. P. Stanley May, Associate Professor of Chemistry at the
University of South Dakota (USD), has built on his successful
DEPSCoR grant, ``Energy Transfer Mechanisms in Lathanide Pairs
in Up-conversion Materials,'' and secured major funding from
NSF for a collaborative USD/South Dakota State University
(SDSU) Photodynamics Research Cluster. Dr. May's research
studies, which were supported by the Army Research Office,
explore how interactions between different phosphors can be
exploited to make novel phoshpor materials called
``upconverters.'' Upconversion phosphors have the unique
ability to produce high-energy light using low energy
exitation. One potential use of such phosphors would be in the
development of ``blue'' lasers, important in atmospheric
sensing applications, which could be powered by batteries or
solar panels.
--The University of Wyoming's DEPSCoR project on ``Elastic Spider
Silks'' has resulted in the cloning and sequencing of the gene
for the protein that makes up flagelliform or capture spiral
silk. This silk has an elasticity of over 200 percent and
tensile strength of approximately 100,000 psi. Dr. Randolph
Lewis, a molecular biologist, was funded by the Army Research
Office. The work resulted in two major publications in The
Journal of Molecular Biology on the sequence of the cloned
cDNA, and in Science on the gene structure of the protein. The
gene structure is unique in that the coding and non-coding
regions together are repeated numerous times. Even more
striking is the fact that the non-coding regions are more
highly conserved in DNA sequence than are the coding regions.
This suggests that these regions are required to keep this very
large repetitive gene stable during replication of the DNA. In
addition, a patent has been issued for the sequence of the silk
protein and gene.
It is important that the DEPSCoR program continues this very
important role of bringing new researchers into productive
relationships with DOD, and avoids the ever-present danger of using
DEPSCoR funds to replace existing DOD funding of already-established
researchers.
It has been our experience that the EPSCoR programs yield a return
far beyond the original investment. EPSCoR allows the states to
accomplish more than is possible through the regular research programs.
It has helped North Dakota attract and retain young researchers who are
able to demonstrate through EPSCoR support of their research, that they
have bright futures in fields of research that are of interest to the
Defense Department.
The Coalition appreciates this Subcommittee's long-standing support
for Defense EPSCoR and we urge you to continue that support. The
Coalition recognizes the very tight fiscal constraints this
Subcommittee faces in the new era of a balanced Federal budget, but we
respectfully request that you provide $25 million for the Defense
EPSCoR program for fiscal year 2002.
The Defense Department's Experimental Program to Stimulate
Competitive Research is a wise and worthwhile investment of scarce
public resources. It will continue to contribute significantly to
efforts to build scientific and engineering research efforts in support
of national defense needs.
Mr. Chairman, the Coalition of EPSCoR States, supports the Defense
Department's basic research programs (budget functions 6.1 and 6.2).
With the end of the Cold War, the technological demands facing our
military have increased. New research must be pursued to meet new
challenges in the fields of information warfare, high technology
terrorism, the proliferation of weapons of mass destruction and threats
in diverse parts of the world.
It is essential that Congress ensure that scientific research and
technological advances in support of our military are not eroded
because of the lack of adequate funding for DOD's basic and applied
research. It is important that this Committee ensure that the fiscal
year 2002 budget request keeps pace with the needs of science and
technology. The Coalition of EPSCoR States supports realistic funding
levels that help sustain vigorous science and engineering research
programs at the Defense Department.
Thank you for your consideration of this request.

Senator Stevens. Doctor, I am going to have to stop you. We
have to keep going here if we are going to hear everybody. We
all have a vial of those. As a matter of fact, several people
have been by giving me a vial of them. We are very pleased
about your arrangements with the university. We will do our
best.
Did you say billion dollars, $10 billion?
Dr. Boudjouk. For the S&T, $10 billion for DOD S&T programs
for fiscal year 2002.
Senator Stevens. Thank you very much. I appreciate it.
We urge witnesses to understand our situation. We are both
going to have to leave here soon and we do want to listen to as
many people as we can.
Ms. Goldberg. Good morning.

STATEMENT OF JOAN GOLDBERG, EXECUTIVE DIRECTOR,
AMERICAN SOCIETY FOR BONE AND MINERAL
RESEARCH ON BEHALF OF THE NATIONAL
COALITION FOR OSTEOPOROSIS AND RELATED BONE
DISEASES

Ms. Goldberg. Good morning. Chairman Stevens, Senator
Inouye, thank you. I am Joan Goldberg, Executive Director of
the American Society for Bone and Mineral Research. I represent
3,500 researchers and clinicians dedicated to promoting bone
and mineral research and bone health, as well as the National
Coalition for Osteoporosis and Related Bone Diseases.
We thank you for this opportunity to testify on the need
for sustained funding of the Department of Defense's unique
research program in osteoporosis and related bone diseases.
This small but important research program directly affects
military readiness. We are grateful for the subcommittee's past
support. We believe the $11 million appropriation will ensure
the stability of this program in fiscal year 2002.
Bone diseases and bone fractures occur in all populations
and all ages. They are devastating diseases and disorders with
disabling and costly effects. For a military population, the
most common bone problem is stress fracture. It was the
Department of Defense's recognition of the extent of this
problem that led to a commission of the report by the Institute
of Medicine.
What do we know about stress fractures? They are overuse
injuries. Muscles become fatigued and are unable to absorb
added shock. Eventually, the fatigued muscle transfers the
overload of stress to the bone and this causes the tiny crack
that we call a stress fracture. The crack is not always easy to
see and new diagnostic methods are needed and being researched
now by DOD-funded researchers.
Stress fractures often result from increasing the amount
and intensity of an activity too rapidly. If the activity that
causes the stress fracture is resumed too quickly, larger,
harder to heal fractures can develop and re-injury can lead to
chronic problems.
Thirty percent of stress fractures occur in women, even
though women today comprise only 14 percent of active duty
military. Consider how common and costly the problem is.
Studies have found from 10 to 14 percent of female cadets,
officers, and recruits suffer stress fractures within 10 weeks.
Stress fractures among 2,000 female recruits cost more than
4,000 training days and an average of 8 or more weeks to heal.
Stress fractures of the femur and the pelvis can take even
longer.
There are approximately 200,000 women on active duty in the
U.S. Army, an additional 150,000 in the reserves, and nearly
25,000 female recruits. Stress fractures thus may afflict at
least 40,000 female military. But they are not limited to
women, as you know. There is one study that shows that nearly 5
percent of marine male recruits suffer them as well, and the
military trains nearly 180,000 male recruits every year.
Why are women at greater risk? Basic training subjects
recruits to extensive physical conditioning over a relatively
short period of time. The resultant stress on the less
physically fit, both male and female, increases the likelihood
of injury. A family history of osteoporosis also increases the
risk for females.
According to the Institute of Medicine (IOM), stress
fractures increase the length of training, the cost of the
program, and the time to military readiness. These injuries
also lead sufferers to end their military careers prematurely.
One study of female marine recruits demonstrated that nearly
four times as many recruits with stress fractures were
separated from the Marine Corps as uninjured recruits.
Here are some quick highlights of bone research findings by
the Department of Defense. We have discovered that the run time
in habitual physical activity predict high-risk subjects. Those
individuals suffered three times as many stress fractures. DOD
researchers investigated whether a 1-week rest period early in
training might prevent fractures. Unfortunately, the answer is
it is not so easy.
However, ongoing research offers promise in exercise,
nutrition, and pharmacological treatment strategies to prevent
stress fractures. Current research includes studies to
determine if electric field stimulation would enhance bone
stress fracture recovery, identify gait patterns, that is how
we walk and run, and whether there are particular ones
associated with stress fractures, determine if a protein-based
supplement could help increase bone mass in physically active
recruits. Other studies have already indicated that protein is
very important in bone strength in the elderly.
There are also studies to assess the relative predictive
importance of the bone masses measured at the hip, spine, and
tibia, of diet, including calcium, as well as the impact of
menstrual function. We know from other studies that anorexia,
which leads to amenhorrea, lack of menstrual periods, is
associated with osteoporosis. We are also looking to see
whether low-dose estrogen might prevent or slow bone loss in
high-risk young females.
These studies, along with others in progress, will
determine the most cost-effective approach to diagnosing and
treating stress fractures to accelerate the return to duty. An
improved understanding will form the basis for preventive
measures for military men and women and the rest of us, for we
are all at risk. The current program is on the cusp of
significant breakthroughs in our understanding of the effect of
physical forces on the bone. This too is vitally important to
understanding bone disease process and prevention.
Senator Stevens. Thank you very much, doctor. Thank you.
[The statement follows:]

PREPARED STATEMENT OF JOAN GOLDBERG

Mr. Chairman and Members of the Subcommittee: I am Joan Goldberg,
Executive Director of the American Society for Bone and Mineral
Research, a professional society of 3,500 researchers and physicians
dedicated to promoting excellence in bone and mineral research and
ensuring that clinical and basic science are translated into health
care practice.
The National Coalition for Osteoporosis and Related Bone Diseases
(the Bone Coalition) appreciates this opportunity to present our
position on the need for sustained funding of the Department of
Defense's research efforts on osteoporosis and related bone diseases.
This is a small, but important, research program that directly affects
military readiness. The Bone Coalition believes a funding level of $12
million will ensure the stability of this critical program in fiscal
year 2002. The Bone Coalition also wishes to thank this subcommittee
for its continuing support for this program.
The Bone Coalition is dedicated to educating the public and its
elected officials about the need to promote lifelong bone health and
the need for federal research funding to assist in reducing the
widespread prevalence of osteoporosis and related bone diseases. The
leading national bone disease organizations that comprise the ``Bone
Coalition'' are: The American Society for Bone and Mineral Research,
National Osteoporosis Foundation, The Paget Foundation for Paget's
Disease of Bone and Related Disorders, and Osteogenesis Imperfecta
Foundation.
Together, we represent more than 485,500 individuals, while the
diseases we address affect about 30 million Americans.
Bone diseases and associated fractures occur in all populations and
at all ages. They are devastating diseases and disorders with
significant physical, psychosocial and financial consequences.
Stress fracture has been identified by the Department of Defense
(DOD) as a major problem for the military population. A report by the
Institute of Medicine (IOM) noted the significant occurrence of stress
fracture during basic training, with stress fractures accounting for a
large proportion of time-loss injuries. Thirty percent of these
injuries occur in women.
What is a stress fracture? Stress fracture is an overuse injury. It
occurs when muscles become fatigued and are unable to absorb added
shock. Eventually, the fatigued muscle transfers the overload of stress
to the bone. This causes a tiny crack called a stress fracture. Stress
fractures often are the result of increasing the amount or intensity of
an activity too rapidly. If the activity that caused the stress
fracture is resumed too quickly, larger, harder-to-heal stress
fractures can develop. Reinjury also could lead to chronic problems
where the stress fracture might never heal properly.
Recognizing the severity and magnitude of the problem within its
population, the Department of Defense commissioned the Institute of
Medicine to examine the incidence of stress fractures in military basic
training. In particular, the IOM was asked to address why the incidence
of stress fractures in military basic training was greater for women
than for men.
The greater incidence of stress fractures in military women appears
to be due in part to the ability of bone to withstand the sudden large
increase in physical loading. Basic training subjects recruits to
extensive physical conditioning over a relatively short period of time
to bring them to the fitness level required to meet standards. The
resultant stress on the less physically fit, both male and female,
increases the likelihood of injury. A family history of osteoporosis
increases the risk for female recruits.
According to the IOM, the incidence of stress fractures has a
marked impact on the health of service personnel and imposes a
significant financial burden on the military by delaying the training
of new recruits. Also stress fractures increase the length of training
time, program costs, and time to military readiness. These injuries may
also lead sufferers to end their military careers prematurely.
The IOM study noted that stress fractures among 2,000 female Marine
recruits resulted in 4,120 lost training days. The fractures required
an average of eight or more weeks to heal.
When we consider that approximately 200,000 women are currently
serving on active duty in the U.S. Armed Forces, and an additional
150,000 are serving in the Reserves, the impact of stress fractures
takes on gigantic proportions. More than 14 percent of female cadets at
the U.S. Military Academy alone developed stress fractures. However,
stress fractures are not limited to women. The IOM report also pointed
to 3.7 percent of male cadets at the U.S. Military Academy who
developed stress fractures. The need to address the problem
intensifies.
The Bone Coalition applauds the DOD for the research it supports
aimed at improving the bone health of recruits. Research currently in
progress includes studies to:
--determine if electric field stimulation enhances tibia stress
fracture recovery. The tibia is the bone most frequently
involved in stress fractures in military recruits. The
prolonged time to healing (approximately 3 months), which
requires rest from weight-bearing activity, adds up to a
significant impact on military readiness.
--identify gait patterns associated with stress fracture risk. The
identification of biomechanical or body movement factors
associated with stress fracture may lead to the development of
preventive measures. How one runs is known to be associated
with injury risk. During running, the body experiences vertical
forces of nearly three times one's body weight.
--determine if a protein-based supplement food bar can promote an
increase in bone mass in physically active young military
trainees. One study tests the hypothesis that nutrients other
than calcium are critical to achieving peak bone mass. If a
measurable benefit can be demonstrated through the use of a
nutrient supplement, this could be of immediate use in military
dietary strategies.
--assess the relative importance of bone mass at the hip, spine, and
tibia, and diet including calcium. For female cadets in this
four year study of the epidemiology of stress fractures in
cadets in the class of 2002 at the U.S. Military Academy (West
Point), the importance of menstrual function on bone mass will
also be assessed.
--determine if low dose estrogen oral contraceptives can prevent or
slow bone loss and decrease stress fractures in high risk
females.
These studies, along with other DOD studies in progress, will
determine the most cost-effective approach to diagnosis and treatment
of stress fracture to accelerate the return to duty. An improved
understanding of these injuries will also form the basis of potential
preventive measures.
Mr. Chairman, a budget of $12 million in fiscal year 2002 will
ensure the stability of the DOD osteoporosis and related bone diseases
program and further its findings, which are critical to military
readiness and recruit health.
Thank you for this opportunity to testify before the Committee.

Senator Stevens. Joe Barnes. I am sorry. We are on 10-
minute votes. Senator Inouye is over voting now, but I have to
be over there before the 10 minutes is over.
Mr. Barnes.

STATEMENT OF JOE BARNES, DIRECTOR OF LEGISLATIVE
PROGRAMS, FLEET RESERVE ASSOCIATION

Mr. Barnes. Mr. Chairman, on behalf of the more than
150,000 shipmates who serve in or who have retired from the
Navy, Marine Corps, and Coast Guard, I extend gratitude for the
concern and active interest of this subcommittee in providing
funds for our Nation's defense. The Fleet Reserve Association
also salutes you, the members and staff for the outstanding
efforts in the 106th Congress that brought about significant
health program and quality of life enhancements. They are very
much appreciated by the enlisted personnel that Fleet Reserve
Association (FRA) represents.
The association calls upon the Congress to continue its
strong commitment and support for our men and women in uniform.
Many important programs have long been ignored due to
inadequate budget requests and demanding operational
requirements. These negatively impact recruiting and retention,
troop morale, and readiness. Recruiting and retention are
primary concerns for the services and for FRA, due in part to
inadequate pay and benefits to compete with compensation
packages offered by civilian employers.
With regard to the promised extra billion dollars for pay,
FRA strongly recommends that Congress adopt an across the board
increase of one-half to 1 percent in basic pay for all hands
and target the balance to fund higher basic pay for enlisted
grades E-5 through E-9. This recommendation is in addition to
the 4.6 percent basic pay increase proposed for January 1st,
2002.
Reenlistment decisions are also impacted by access to the
military health system. As the primary health care program for
active duty members and their families and an integral part of
their retirement package, the system has been chronically
underfunded. The system has become reliant on emergency
supplemental appropriations or the reprogramming of funds
within DOD to ensure the availability of services. Supplemental
appropriations have been proposed for the current fiscal year
and FRA strongly supports this initiative.
Another facet of the retention challenge is DOD's permanent
change of station process. In contrast to Federal civilian
employees, service members are being shortchanged for similar
demands to relocate for duty assignments. In the event the
oversight committee adopts the new plan, FRA requests the
subcommittee to seek adequate funding for its implementation.
Likewise, if authorized, FRA asks for your support for funding
the concurrent receipt of both military retired pay and VA
disability compensation without offset.
Reform of the survivor benefit program is also needed to
increase the basic annuity for surviving spouses, whose
benefits are reduced when they become eligible for social
security.
These quality of life improvements will further enhance
DOD's pay and benefit package and enable the services to better
compete for highly skilled and dedicated personnel.
Mr. Chairman, allow me to again express the sincere
appreciation of the association's membership for all the
subcommittee does for our military personnel. FRA is most
grateful for this opportunity to express these concerns. Thank
you.
Senator Stevens. Thank you very much, Mr. Barnes.
[The statement follows:]

PREPARED STATEMENT OF JOE BARNES

INTRODUCTION

Mr. Chairman. On behalf of its membership and the men and women of
the Sea Services whom it represents, the Fleet Reserve Association
(FRA) gratefully acknowledges the significant contributions this
Subcommittee has made to quality-of-life programs for the personnel of
the Uniformed Services. The Association salutes you, the members and
staff, for a job well done throughout the many years the FRA has been
associated with your distinguished Subcommittee.
Fiscal year 2001 proved a banner year for military personnel
legislation. Congress adopted new and improved military health care
policies; TRICARE-for-Life and expanded pharmaceutical benefits.
Additionally, to name but a few of the other major accomplishments; a
sizeable basic pay increase, housing allowance reform, pay reform for
mid-grade noncommissioned and petty officers, enhancement of the
Montgomery GI Bill (MGIB), modification of the Impact Aid program, and
increased compensation programs to financially assist junior enlisted
personnel.
The successful adoption and enactment of these and other programs
in the fiscal year 2000 and fiscal year 2001 National Defense
Appropriations and Authorization Acts can be attributed to the
persistence and effectiveness of this Subcommittee, its members and
staff. The legislation adopted by Congress in the previous two years
will go far to augment the stability and readiness of the All Volunteer
Force (AVF) which, in turn, lends greater credence that the AVF is the
most reliable source for the defense of the United States and its
Allies.

FRA: LOYALTY, PROTECTION, AND SERVICE

The role of FRA, the oldest and largest enlisted military service
organization, has been constant for more than three-quarters of a
century. It has been and continues to be the ombudsman for all enlisted
men and women of the three Sea Services--the U.S. Navy, Marine Corps,
and Coast Guard. The membership, 150,000 strong, consists of enlisted
personnel serving on active duty, in the Naval, Marine Corps and Coast
Guard Reserve, or retired after honorably serving the Nation in war and
peace. Many of the latter are combat veterans having served in one, two
or three major conflicts involving the United States.
Noteworthy, is the Association's lead among all military and
veterans' organizations in initiating and campaigning for legislation
beneficial to quality-of-life projects that enhance recruiting and
retention. Among its major successes are the Civilian Health and
Medical Program for the Uniformed Services (CHAMPUS), now TRICARE, the
uniformed services Survivor Benefit Plan (SBP), and in the past three
years, repeal of REDUX (the onerous 1986 military retirement system)
and Pay Reform for mid-grade noncommissioned and petty officers.

THE DEFENSE BUDGET

Mr. Chairman. The Constitution of the United States begins with
``We, the People of the United States, in order to form a more perfect
union, establish justice, insure domestic tranquility, provide for the
common defense, promote the general welfare, and secure the blessings
of liberty to ourselves and our posterity, do ordain and establish this
Constitution for the United States of America.'' The words provide for
the common defense are emphasized because they proceed the words,
``promote the general welfare.''
In 1900, for example, the federal budget outlay (based on 1999
dollars) was $10.5 billion of which $4 billion (38 percent) was
earmarked for defense expenditures. In 1999, the federal outlays were
$1.7 trillion with $268 billion (16 percent) for defense. In the past
eight years the defense budget has dropped from 19.3 percent of the
federal budget to an estimated low of 15.9 percent in 2001. Under this
scenario, FRA believes it has the duty to alert the Congress that
increased authorization and funding for the programs necessary to
maintain the highest degree in personnel readiness are priorities for
fiscal year 2002. Should the Administration follow through with its
statement of no significant increase in the fiscal year 2002 Clinton
Defense Budget (in addition to the $3.7 billion for military health
care, pay raises, and a boost in housing allowances) the Congress must
enhance both authorization and funding to cover improvements in other
quality-of-life projects. The current Administration may need
additional time to develop a budget based on future strategic
necessities, but time is not required to realize the immediate funding
needs for repair parts, housing, modernizing infrastructures, and other
programs that remain constant regardless of the strategic scenario.

CONCERNS

It would appear the successes recorded in the 106th Congress would
be more than adequate to forego further requests for improvements in
uniformed personnel programs. However, the need exists to continue the
march for quality of life enhancements for our men and women in the
Armed Forces, as well as those who have retired from the uniformed
services after serving the required number of years on active or
reserve duty. Many programs have been long ignored due to inadequate
budget requests from previous Administrations. Slim budgets have played
havoc with troop morale and readiness; too many operational demands on
manpower, reduced or canceled training exercises and sessions,
shortages of equipment and repair parts, inadequate housing and working
facilities--plus the stress of juggling the demands of the Service with
that of family life.

SUSTAINING THE ALL VOLUNTEER FORCE

The recently published draft report, Road Map for National
Security, released January 31, 2001, by The United States Commission on
National Security/21st Century, calls upon the Nation to ``strengthen
government (civil and military) personnel systems in order to improve
recruitment, retention, and effectiveness at all levels.''
It further attests to the Services' difficulties in recruiting and
retention. To give the military Services ``the flexibility to adapt and
dramatically reshape their personnel systems to meet 21st century
mission needs,'' the report calls upon the President and the Congress
to propose and adopt legislation that will enhance both military
compensation and the retirement system.
FRA agrees with the Commission's views on recruiting and retention.
Without attaining goals in these two categories, there would be no All
Volunteer Force (AVF). Although FRA soundly believes military service
for all physically-abled young men should be mandatory, it continues to
support the AVF--provided the taxpayers are willing to spend the money
to maintain its structure.
The recruiting and retention scene has dramatically changed over
the last 30 years. Taxpayers are paying as much as a $20,000 bonus,
plus an educational benefit worth $50,000, to access one individual
into the Armed Services. Taxpayers also pay more money to enlist
married persons, with or without children, persons with families, or
single parents with child(ren). Apparently, this is now a necessity or
the AVF cannot attain its manpower objectives through accessing only
unmarried and unencumbered males and females. Members of this group are
not swarming into recruiting stations demanding to enlist.
According to the 1998 Youth Attitude Tracking Study (YATS), the
propensity of young males to enlist in the military has dropped to 26
percent compared to 34 percent in 1991. The percentage of youth going
to college is increasing and those going to college express little
interest in serving in uniform.
In its list of priorities for fiscal year 2001, FRA is recommending
to the Congress that during the authorization and funding process it
consider adopting the following: (1) further pay reform to include all
enlisted grades from E-5 through E-9; (2) adequately fund the
Department of Defense's Health Care Program to include enhancements
adopted in the Fiscal Year 2001 Floyd D. Spence National Defense
Authorization Act; (3) improve the permanent change of station (PCS)
process; (4) increase the size of the military manpower pool (or reduce
deployments to ``fit'' the size of DOD's current uniformed strength);
(5) adequately support Reserve component requirements, and; (6) enhance
other quality-of-life programs including reform of the uniformed
services Survivor Benefit Plan, authorizing full concurrent receipt of
retired pay and disability compensation, reforming sea pay, enacting
equity amendments to the Uniformed Services Former Spouses Protection
Act (USFSPA), and enhancing GI Bill benefits.

PAY REFORM FOR CAREER ENLISTED GRADES

The Association's membership, along with shipmates from the Navy,
Marine Corps and Coast Guard, are extremely grateful to Congress for
adopting the FRA Pay Reform package for mid-grade noncommissioned and
petty officers (NCO) effective July 1, 2001. The reform came a year
late, but the value of the delay prompted Congress to direct DOD to
take another look at enlisted pay rates for the NCO corps.
The 9th Quadrennial Review of Military Compensation (QRMC) has made
a commitment to review NCO basic pay by reconsidering the enhanced
value of the NCO corps to the Armed Services. Their increased
educational level and advanced technical knowledge command high wages
in the civilian market.
FRA welcomes the attention given to NCO basic pay. The All
Volunteer Force (AVF) that provided young enlisted members with higher
basic pays, improved housing allowances, inflated enlistment bonuses,
enhanced Cold War educational entitlements, and special pays (to name a
few) is producing pay inversion--junior enlisted personnel are earning
more pay than their senior NCOs/petty officers.
Congress has approved the use of more tax dollars to ensure junior
service members receive extra pays (i.e. additional allowance for
housing and to remove them from dependency on food stamps), yet this
group normally will be promoted 3 to 4 additional pay grades in two to
three years with a 43 percent to 55 percent increase in basic pay. On
the other hand, a senior noncommissioned officer in pay grade E-9 can
manage but a 30 percent increase in basic pay over a 16-year period.
This is the year to fix the pay inversion that engulfs NCOs and
causes many of our mid-level noncommissioned and petty officers to bail
out of the military in their 10th to 15th years of service. It's not
just the lure of higher wages in the civilian world, it's looking
forward to a bleak future in the Armed Forces that promises compressed
pays at the senior enlisted level (E-8 and E-9) and a lack of
recognition and appreciation for their roles as leaders and teachers.
Many of these bright and intelligent young people should aspire to
attaining the grade of E-8 or E-9 instead of opting for a warrant or
commissioned officer spot where the money can be a factor. Reviewing
the current military retirement program finds the average enlisted
military retiree in pay grade E-7, the average officer in pay grade O-
5. The E-7's annual retirement pay as of January 1, 2001 will be
$16,552 for 20 years of service. For the O-5, $34,741, or more than
twice the pay of the retired E-7. Even an O-3's retirement pay at 20
years will be $25,752, more than a 50 percent increase over that of the
E-7.
Who can blame these young people with 10 to 15 years of enlisted
service to opt for the life of a commissioned officer. The financial
lure is greater--greater than the retirement pay of an E-7, E-8, or E-
9. Yet, there is a pressing need for the services to retain senior NCOs
and Petty Officers to guide, lead, teach, train, counsel, and inspire
their junior charges.
The Armed Forces cannot endure with only an officers' corps and a
junior enlisted force. Few young people would seek a commission if it
required them to have the experience to perform the same tasks now
accomplished by the NCO corps. There must be an intermediate corps in
the Armed Forces of dedicated men and women, conditioned and
experienced by years of service, capable of enforcing the commands of
the officers charged with planning and directing the unit's mission.
NCOs and petty officers do much more than carry out the orders of
their officers. They also teach, train and counsel young men and women
entering the officer ranks, replace officers in positions of command
and, when called upon, change their stripes for bars during national
emergencies.
The Association opposes utilizing the additional $1 billion
promised for pay increases to fund bonuses and special pays. FRA
recommends that Congress adopt a lesser across-the-board increase in
basic pay for all hands (perhaps one-half to 1 percent) and target the
balance to fund higher basic pay rates for the E-5 to E-9 enlisted
grades.
This recommendation is in addition to the higher than the ECI 4.6
percent basic pay increase proposed for January 1, 2002.

HEALTH CARE FUNDING

FRA appreciates the significant military health care enhancements
enacted in fiscal year 2001 and recommends that the Congress reiterate
its commitment to authorize and appropriate sufficient funds for these
improvements within the Department of Defense (DOD) Health Program
(DHP). And further, to direct the Health Care Finance Administration
(HCFA) to reimburse DOD for its care of Medicare-eligible military
families at Military Treatment Facilities (MTFs), and expand the option
of participating in the Federal Employees Health Benefit Plan (FEHBP)
to military beneficiaries who are unable to find TRICARE providers for
care, because of the absence of Medicare Part B, or because they are
under age 65 and do not have the option to enroll in TRICARE Prime.
The Military Health System (MHS) is chronically underfunded,
resulting in execution shortfalls, lack of adequate equipment
capitalization, failure to invest in infrastructure and slow
reimbursement to Managed Care Support contractors. For a number of
years, the MHS has been forced to rely on emergency supplemental
appropriations or the reprogramming of funds within DOD.
The military's health care program is one of the most important of
all benefits afforded the men and women who serve in or have retired
from the Uniformed Services, plus their families and survivors. The
promise of ``free'' lifetime care in military treatment facilities
(MTFs) was a major selling point in the military's recruiter's and
career counselor's pitch to enlist or retain personnel in the Uniformed
Services. Other than travel, adventure, and a 20-year retirement, what
else was there to entice our service members to remain in uniform?
FRA is also represented by a more detailed statement in The
Military Coalition's statement on additional health care issues and
invites members of the distinguished Subcommittee to peruse that for
additional information on this important issue.

IMPROVE THE PERMANENT CHANGE OF STATION PROCESS

The FRA is very concerned that service members continue to incur
significant out-of-pocket expenses in conjunction with government-
directed relocation orders.
A survey conducted by FRA via the Association's web site last fall,
revealed that out of pocket expenses for military personnel averaged
$2,270 across all pay grades. In addition, the 1999 Calibre Associates
Study commissioned by DOD revealed that junior enlisted personnel
indicated that providing a list of entitlements with permanent change
of station (PCS) orders was their most desired change to existing
policy. Due in part to confusion and misunderstanding of the entire
process, junior enlisted personnel had a lesser proportion of their
authorized expenses (27 percent) reimbursed by the government compared
to the median (62 percent) of all other study respondents.
In contrast to federal civilians, service members are being
shortchanged. Federal civilians receive substantial reimbursements in
conjunction with government directed moves, up to and including
reimbursement for house-hunting trips and homeowner closing costs. In
the words of an FRA member, ``I am a civil servant with a DOD agency
and a Naval Reservist who has PCSed as a civilian. These (DOD)
officials had every penny of their relocation expense reimbursed--by
contrast the military PCSer has a very limited scheme of reimbursement.
The answer to this, as it is to so many federal reimbursement systems,
is simple. Just use the same reimbursement formula for the military
member as applies to members of the senior civil service.'' FRA
concurs.
Although the services are now authorized to provide advance
temporary subsistence expenses and per diem to service members on duty
outside the Unitede States, in Hawaii or Alaska, the PCS mileage
allowances and per diem rates have not been adjusted since 1986. The
Association applauds and strongly supports the expanded household goods
demonstration projects which have the potential for significantly
improving the quality of service and reducing the administrative
requirements associated with claims and other procedures.
While fully understanding that the Subcommittee is not responsible
for authorizing further enhancements to PCS programs, the Association
asks for your support of improvements that may be included in fiscal
year 2002 authorizing legislation.

UNIFORMED MANPOWER STRENGTHS

FRA continues to be concerned over the strength of the Nation's
uniformed manpower, particularly that of the Navy, Marine Corps, and
Coast Guard. There's far too much rhetoric regarding the adequate
number of uniformed personnel; it's either too many or too few. FRA
subscribes to the latter view--there aren't sufficient numbers of
personnel to sustain the number of world-wide operations and training
commitments. Sea Service members, as well as those in the Army and Air
Force, are unduly stressed because there isn't sufficient manpower
available to meet mission requirements. Optempo is such that it impacts
heavily on perstempo resulting in a serious negative effect on
readiness.
FRA concedes that accessing greater numbers of recruits for the
Armed Forces will be an extreme challenge to the Services recruiting
force. Most of the Armed Forces have bolstered their recruiter ranks
substantially along with associated budgets for advertising, enlistment
bonuses and other costs. If an individual Service must attract
increased numbers of qualified personnel, the Congress should provide
adequate resources to attain that goal.
Most importantly is the threat that certain ``defense experts''
will recommend further reductions in the active forces in favor of
increasing Reserve units. Although the Reserves have served
magnificently in war and peace, the Nation should remember the Korean
conflict. In WW I and WW II, the Vietnam and Desert Storm, the United
States had some time to train its uniformed personnel before committing
them to combat. For the Korean conflict, the United States had a small
regular force, mostly untrained, to send into battle. The United States
was outnumbered, outmaneuvered and slaughtered before the Reserves
could be mobilized and committed to battle. When the Congress considers
Reserve strengths, which FRA believes should be increased, it must
remember the ``Forgotten War''--Korea--and augment the active forces as
recommended by Service chiefs.

RESERVE COMPONENT GOALS

The Reserve components of the Navy, Marine Corps, and Coast Guard
are an important part of the Total Force concept and essential to
sustaining the high state of readiness of the Nation's Armed Forces.
Reservists have carried the brunt of defending the United States
against all enemies. As the old saying goes, there are more names of
Reservists on the headstones in our wartime cemeteries than members of
the regular force. FRA salutes its Reservists' members and seeks
authorization and funding from the Congress for the following:
--Adoption of a permanent policy authorizing six years of Selected
Reserve service to qualify for retirement.
--Authorizing employer and reservist tax credit for unreimbursable
expenses.
--Extension of the ten year limitation for selected reservists to use
their MGIB benefits.
--Deferring repayment of certain federal student loans for activated
reservists.
--Increasing medical coverage for reservists who become ill while
performing inactive duty for training.
--Extending the VA Home Loan Guarantees for selected reservists.

OTHER QUALITY-OF-LIFE ISSUES

Survivor Benefit Plan
FRA supports and recommends the adoption and funding of Sen. Strom
Thurmond's S. 145, to amend title 10, United States Code, to increase
to parity with other surviving spouses the basic annuity that is
provided under the Uniformed Services Survivor Benefit Plan for
surviving spouses who are at least 62 years of age. Further, to adopt
and fund a proposal to amend the date now established in law
authorizing paid up SBP premiums for statutory-eligible participants
from October 1, 2008 to October 1, 2002.
Currently, the plan falls short of what is offered our retired
Federal civilian counterparts once employed by the DOD. Under the
Federal Employees Retirement System (FERS) they receive a subsidy of 42
percent, and under Civil Service Retirement System (CSRS) 50 percent.
Uniformed Service members, on the average, pay less than retired DOD
civilian employees but pay into the plan over a longer period (e.g. 36
years compared to 19) for the retired DOD employee. Members' surviving
spouses also receive less of a gain than CSRS and FERS surviving
spouses although payments to the former are made over a longer period.
Some Congressional sources state there is a conflict as to whether
the original intent of the SBP was to have the Federal Government
subsidize 40 percent of its costs. They claim there is nothing to
support the existence of that subsidy. But there is such a base. The
then Assistant Secretary of Defense for Force Management Policy
forwarded a report on the Survivor Benefit Plan on July 18, 1996, to
the Chairman of the Committee on National Security. The report on page
ES-18 emphasized that the original intent was to provide a subsidy of
40 percent, that it was then about 28 percent, and that a selection of
recommended options in the report should be selected to raise the
subsidy to approximately 40 percent.
If the Federal Government provided its 40 percent share over the
past years, there would be sufficient funding in the participants'
contributions to authorize and appropriate funds (approximately $3
billion over a ten-year period) to enact the changes requested above.

Concurrent Receipt
FRA urges Congress to adopt and fund S. 170, sponsored by your
colleague, Sen. Harry Reid,, that would authorize nondisabled retired
members of the Armed Forces who later become eligible for service-
connected disability payments to receive both full military retired pay
reason of years of military service, and compensation payments from the
Department of Veterans Affairs. The enactment of this proposal would
halt the discriminate practice of denying retired military personnel
concurrent receipt while authorizing such for retired civilian
employees of the DOD and other Federal agencies.
Opponents claim that two Federal payments should not be authorized
for the same period of service; however, certain Federal employees
receive two payments from the U.S. Treasury for their employment while
concurrently receiving pay for active duty for training in the Reserve
components of the Armed Forces. FRA believes it can say without a doubt
that this is two Federal payments for the same period of time.

Former Spouses Protection Act (FSPA)
The Uniformed Services FSPA, Public Law 97-252, is probably the
most ambiguous, misunderstood, inequitable, and prejudiced law ever
forced on retired members of the Uniformed Services. It is not that the
majority of retired military members wish to not share their military
retirement pay with ex-spouses, but the fact that family courts appear
to use the Act to penalize many military retirees and as a means to
force payment of divorce settlements through the United States
Government.
State courts almost automatically award ex-spouses percentages of
the respective members' retirement pay ordering the DOD to directly pay
the courts' awards to the ex-spouse or an appropriate state agency.
However, without full assurance, the courts have jurisdiction over the
members concerned. Whereas the language of the Act states the courts
``may'' treat military retirement pay as property, the majority of
courts interpret the word as ``will'' or ``shall.'' Further, should a
state court ignore provisions of law in the USFSPA or a decision made
by the United States Supreme Court, there is no available means within
the United States Judiciary to assist the member in forcing the
offending state court to amend its unlawful ruling.
There are many inequities in this law, heavily weighted against the
retired military member. Congress must face the unpleasant task of
reforming the Act so that it is as fair to the retired member as to his
or her ex-spouse. FRA, as well as many other military and veterans
organizations, representing millions of members, will be pleased to
support the Congress in amending the Act. True, USFSPA has been amended
11 times in favor of the ex-spouse and only once for military retirees.
FRA recommends that no such further amendments be adopted without
considering favorable and equitable changes for military retirees.
Sea Pay
FRA urges the Congress to authorize and appropriate funding
increases in Career Sea Pay. And additionally, to authorize and fund
sea pay for junior enlisted sailors in the grades of E-1 through E-3.
In 1995, one of the Association's legislative staff members
participated as a member of the Defense Science Board Quality of Life
Panel. In visits to Naval installations and ships, recurring comments
were heard from both ships' officers and senior enlisted chiefs about
the importance of providing sea pay, or its equivalent, to junior
enlisted sailors. These young sailors go to sea the same as the career
force and perform the essential but unglamourous jobs on ships.
Additionally, in many cases they are required to live aboard the ships
when in dock for repairs where the noise is deafening--resulting in no
rest, no sleep, and no peace of mind.

GI Bill
Educational benefits are the most attractive Armed Forces
recruiting incentive and, despite improvements made in fiscal year 2001
to the Montgomery GI Bill (MGIB), further program enhancements are
needed. With the Services experiencing continuing difficulties in
recruiting quality personnel, it is almost imperative that the Congress
increase the Bill's appeal to the Nation's eligible youth.
However, enhancement should not be so attractive that the first
term service member opts to leave the military to take advantage of an
improved MGIB. Additional benefits should be predicated on the service
member's further retention. First-termers who reenlist for four or more
years would be offered additional benefits. For those remaining in
uniform for longer periods of service, greater entitlements would be
available. If the service member serves 20 years or more for retirement
purposes, only the member performing such service would be so
authorized an even greater benefit package or choose the option of
transferring the entitlement to a member of the immediate family.
Additionally, FRA recommends that the MGIB be opened to enrollment
of qualified members on active or Reserve duty who have not previously
enrolled or disenrolled provided they reenlist for a term of no less
than three years. The costs of these improvements may be high, but the
benefits will be even higher. Better yet, the All Volunteer Force will
survive.

Other Goals
In addition to FRA's primary goals, there are others issues listed
below that have been adopted by the Association's members in assembly
at its 2000 National Convention. To adopt:
--Adequate funding as required by law for Basic Allowances for
Housing.
--Expansion of the number of family housing and barracks to replace
aging and substandard units.
--Adequate funding for commissary stores to preserve current
benefits.
--Continuation of augmenting Impact Aid appropriations to ensure
adequate funding to military-impacted schools.
--Support the continuation of the Relocation and Transition
Assistance Programs.
--Abbreviated military treatment facilities (MTFs), commissary stores
and exchanges at military installations ordered to close where
there is a sizeable military patronage of active, Reserve, and/
or retired service members.
--Adequate funding to provide for the procurement of necessary
equipment and essential spare parts.
Mr. Chairman. There are other goals not listed herein; goals that
need to be resolved for the benefit of the men and women serving in the
Uniformed Services. They do not, however, concern the programs and
issues assigned to this distinguished Subcommittee. FRA will make them
known to the appropriate panels with a request that the members of this
Subcommittee actively support their adoption if brought to the House
floor for consideration. The latter includes the need to escalate the
modernization and construction of living, working, and recreational
facilities on board ships as well as on land--issues FRA is addressing
in testimony to the Subcommittee on Military Construction
Appropriations.
Meanwhile, FRA extends its appreciation for the opportunity to
present its goals for fiscal year 2002, to seek your support for the
issues presented, and to wish the Subcommittee the very best in its
deliberations on dividing the budget to fund the programs of importance
to our uniformed personnel.

Senator Stevens. I will vote and the next witness will be
Ms. Hinestrosa.
Senator Inouye [presiding]. The chair calls upon Maria
Carolina Hinestrosa, Board member of the National Breast Cancer
Coalition.

STATEMENT OF MARIA CAROLINA HINESTROSA, BOARD MEMBER,
NATIONAL BREAST CANCER COALITION

Ms. Hinestrosa. Thank you very much, Mr. Chairman and
members of the committee, for your exceptional leadership in
the effort to increase and improve breast cancer research. As
my testimony will describe in detail, the investment and cancer
research made by you in this committee has brought us closer
than ever to the verge of significant discoveries about cancer.
I am Carolina Hinestrosa, founder of Nueva Vida and member
of the Board of Directors of the National Breast Cancer
Coalition (NBCC). I am also a two-time breast cancer survivor
and a consumer advocate in the Department of Defense Breast
Cancer Research Program Integration Panel, and we do
programmatic review.
As you know, the National Breast Cancer Coalition is a
grassroots advocacy organization made up of more than 600
organizations and tens of thousands of individuals and has been
working since 1991 toward the eradication of this disease
through advocacy and action. As a member of the integration
panel, I participate in the evaluation of all the proposals
submitted to the DOD breast cancer research program. I also
take part in the careful discussion that sets the vision for
this unique program.
On behalf of the National Breast Cancer Coalition and the
2.6 million women now living with breast cancer, I thank you
for your strong past support of the DOD breast cancer research
program and urge your continued support of this important
program with level funding for financial year 2002.
The National Breast Cancer Coalition believes this program
is vital to the eradication of breast cancer. My written
testimony, which I would like to submit for the record, has
specific examples of scientific achievements resulting from
funding through the DOD breast cancer research program. The
main point I want to make today is that developments in the
past few years have begun to offer breast cancer researchers
crucial insights into the biology of breast cancer and have
brought into sharp focus the areas of research that hold
promise to build on the knowledge and the investment we have
made.
Breakthroughs in basic research have opened the door for
targeted approaches that address one woman's breast cancer in a
different way from another woman's breast cancer. The DOD
program has contributed immensely to the body of knowledge
about this very complex disease in the areas of prevention,
detection, androgenesis, vaccines, and clinical applications.
But we still have a great deal more to learn.
Mr. Chairman and members of the committee, the investment
that you have made in the program over the years is now
beginning to pay off. This is not the time to step back from
funding this unique and innovative research program. Rather,
this is precisely the time to continue a focused, targeted
program that looks specifically at breast cancer.
As a result of the DOD program, the amount of scientific
information about breast cancer is exploding. We must continue
this focus in order to build on this gained knowledge and on
the discoveries that we have made. The DOD breast cancer
research program has been an incredible model that others have
replicated. The innovative research performed through the
program has the potential to benefit not only breast cancer,
but all cancers, as well as other diseases. Its success is
literally changing the face of biomedical research in many
areas.
An inherent part of this program has been the participation
of consumer advocates at every level, which has created an
unprecedented working relationship between advocates and
scientists and ultimately led to promising research in breast
cancer. Because there is no bureaucracy, the program is able to
quickly respond to what is currently happening in the
scientific community. It is able to fill gaps with little
facts.
The program is also responsive to the public. All the
research that has been funded through the DOD breast cancer
research program is reported to the public in a biannual
conference called the Era of Hope Meeting. In addition to the
fact that the DOD program provides desperately needed excellent
quality breast cancer research, it also makes extremely
efficient use of its resources. In fact, over 90 percent of the
funds have gone directly to research grants. The overall
structure of the system has streamlined the entire funding
process while retaining traditional quality assurance
mechanisms.
The National Breast Cancer Coalition is highly committed to
the DOD program, as we truly believe it is one of our best
chances at finding a cure or a true prevention for breast
cancer. The coalition and its members are dedicated to working
with you to ensure the continuation of funding for this program
at a level that allows research to forge ahead. Level funding
would allow the momentum to continue towards eliminating the
enormous toll that breast cancer puts on American families.
NBCC asks you, the Defense Appropriations Subcommittee, to
recognize the importance of what you have initiated. You have
set in motion an innovative and highly efficient approach of
fighting the breast cancer epidemic. You must continue to
support this effort by funding research that will help us win
this very real and devastating war against a cruel enemy.
Very shortly you will receive a letter that has been signed
by more than 60 of your colleagues in support of the
continuation of the breast cancer research program and funding
at $175 million.
I want to thank you very much for inviting me to testify
and giving hope to the 2.6 million women living with breast
cancer in the United States. Thank you.
Senator Stevens [presiding]. Thank you.
[The statement follows:]

PREPARED STATEMENT OF MARIA CAROLINA HINESTROSA

Thank you, Mr. Chairman and members of the Appropriations
Subcommittee on Defense for your exceptional leadership in the effort
to increase and improve breast cancer research. As my testimony will
describe in detail, the investment in cancer research made by you and
this Committee is one of the contributions that has brought us closer
than ever to the verge of significant discoveries about cancer. I am
Carolina Hinestrosa, member of Programa Nueva Vida and member of the
Board of Directors of the National Breast Cancer Coalition. I am also a
breast cancer survivor, and a consumer advocate on the Department of
Defense Breast Cancer Research Program Integration Panel, which does
programmatic review.
On behalf of the National Breast Cancer Coalition and the 2.6
million women who are now living with breast cancer, I thank you for
your strong past support of the Department of Defense's (DOD) Peer-
Reviewed Breast Cancer Research Program and I urge your continued
support of this important program with an appropriation of $175
million--level funding--for the program for fiscal year 2002. The
National Breast Cancer Coalition believes this program is vital to the
eradication of breast cancer.
As you know, the National Breast Cancer Coalition is a grassroots
advocacy organization made up of more than 600 organizations and tens
of thousands of individuals and has been working since 1991 toward the
eradication of this disease through advocacy and action. NBCC supports
increased funding for breast cancer research, increased access to
quality health care for all women, and increased influence of breast
cancer activists at every table where decisions regarding breast cancer
are made.

OVERVIEW OF THE DOD BREAST CANCER RESEARCH PROGRAM

The DOD Peer-Reviewed Breast Cancer Research Program has been an
incredible model that others have replicated. Broadly defined, the
innovative research performed through the program has the potential to
benefit not just breast cancer, but all cancers, as well as other
diseases. Its success is literally changing the face of biomedical
research in many arenas.
This program is not only innovative, but is also incredibly
streamlined. As you know, it is overseen by a group of distinguished
scientists and activists, as recommended by the Institute of Medicine.
Because there is no bureaucracy, the program is able to quickly respond
to what is currently happening in the scientific community. It is able
to fill gaps, with little fuss. It is responsive, not just to the
scientific community, but also to the public.
Since its inception, this program has matured from an isolated
research program to a broad-reaching influential voice forging new and
innovative directions for breast cancer research and science. The
flexibility of the program has allowed the Army to administer this
groundbreaking research effort with unparalleled efficiency and skill.
In addition, an inherent part of this program has been the inclusion of
consumer advocates at every level, which has created an unprecedented
working relationship between advocates and scientists, and ultimately
led to uncharted research in breast cancer.
It is important to note that the DOD Integration Panel that designs
this program has a plan of how best to spend the funds appropriated.
This plan is based on the state of the science--both what scientists
know now and the gaps in our knowledge--as well as the needs of the
public. This plan coincides with our philosophy that we do not want to
restrict scientific freedom, creativity and innovation. While we
carefully allocate these resources we do not want to predetermine the
specific research areas to be addressed.

UNIQUE FUNDING OPPORTUNITIES

Developments in the past few years have begun to offer breast
cancer researchers fascinating insights into the biology of breast
cancer and have brought into sharp focus the areas of research that
hold promise and will build on the knowledge and investment we have
made. The Innovative Developmental and Exploratory Awards (IDEA) grants
of the DOD program have been critical in the effort to respond to new
discoveries and to encourage and support innovative, risk-taking
research. The IDEA grants have been instrumental in the development of
promising breast cancer research. These grants have allowed scientists
to explore beyond the realm of traditional research and have unleashed
incredible new ideas and concepts. IDEA grants are uniquely designed to
dramatically advance our knowledge in areas that offer the greatest
potential.
IDEA grants are precisely the type of grants that cannot receive
funding through more traditional programs such as the National
Institutes of Health, and academic research programs. Therefore, they
complement, and do not duplicate, other federal funding programs. It is
vital that these grants are able to continue to support the growing
interest in breast cancer research--$175 million for peer-reviewed
research will help sustain the IDEA grant momentum.

SCIENTIFIC ACHIEVEMENTS

Following are just some of the achievements of the DOD BCRP which
are included in DOD's Congressional Directed Medical Research Programs
Annual Report (September 1999) sent to Congress. The DOD Peer-Reviewed
Program has sought innovative ways to translate what is discovered
under the microscope to the bedside. Most recently, it defined a new
funding mechanism that will carve out a niche in clinical translational
research by bringing cancer clinical trials into community settings.
One of the most promising outcomes of research brought about by the
BCRP was the development of Herceptin, a drug that prolongs the lives
of women with a particularly aggressive type of advanced breast cancer.
This drug could not have been developed without first researching and
understanding the gene known as HER2-neu, which is involved in the
progression of some breast cancers. In a DOD BCRP funded study,
researchers found that over-expression of HER-2/neu in breast cancer
cells results in very aggressive biologic behavior. Most importantly,
the same researchers demonstrated that an antibody directed against
HER2-neu could slow the growth of the cancer cells that over-expressed
the gene. This research led to the development of the drug Herceptin.
Other researchers funded by the BCRP are currently working to identify
similar kinds of genes that are involved in the initiation and
progression of cancer. They hope to develop new drugs like Herceptin
that can fight the growth of breast cancer cells.
Several studies funded by the BCRP will examine the role of
estrogen and estrogen signaling in breast cancer. For example, one
study examined the effects of the two main pathways that produce
estrogen. Estrogen is often processed by one of two pathways; one
yields biologically active substances while the other does not. It has
been suggested that women who process estrogen via the biologically
active pathway may be at a higher risk of breast cancer. It is
anticipated that work from this funding effort will yield insights into
the effects of estrogen processing on breast cancer risk in women with
and without family histories of breast cancer.
One DOD Idea award success has supported the development of new
technology that may be used to identify changes in DNA. This technology
uses a dye to label DNA adducts, compounds that are important because
they may play a role in initiating breast cancer. Early results from
this technique are promising and may eventually result in a new marker/
method to screen breast cancer specimens.
Another DOD BCRP Idea award has generated a new vaccine targeted
against ductal carcinoma in situ (DCIS), a malignant, non-invasive
lesion that can develop into an invasive breast cancer. The vaccine is
being tested on mice that develop spontaneous mammary tumors that over
express the HER-2/neu protein. Mice treated with the vaccine show a
markedly decreased rate of tumor development when compared to that
generated for the prevention of tumor formation in women at risk for
the development of HER-2/neu expressing tumors.
Investigators funded by the DOD have developed a novel imaging
technique that combines two-dimensional and novel three-dimensional
digital mammographic images for analysis of breast calcifications.
Compared to conventional film screen mammography, this technique has
greater resolution. Ultimately, this technique may help reduce the
number of unnecessary breast biopsies.
Despite the enormous successes and advancements in breast cancer
research made through funding from the DOD BCRP, we still do not know
what causes breast cancer, how to prevent it, or how to cure it. It is
critical that innovative research through this unique program continues
so that we can move forward toward eradicating this disease.
Research that has been funded through the DOD BCRP is available to
the public. Individuals can go to the Department of Defense website and
look at the abstracts for each proposal.

FEDERAL MONEY WELL SPENT

In addition to the fact that the DOD program provides desperately
needed, excellent quality breast cancer research, it also makes
extremely efficient use of its resources. In fact, over 90 percent of
the funds have gone directly to research grants. The overall structure
of the system has streamlined the entire funding process, while
retaining traditional quality assurance mechanisms.
Since inception of the DOD BCRP, more than 15,000 proposals have
been received. For the fiscal year 2000 BCRP, 1,234 proposals in 14
different award mechanisms were received and 347 proposals have been
recommended for funding.
A total of 1,772 one-page proposals for Concept Awards (a new type
of grant for preliminary ideas that could not otherwise get funding)
was received electronically as a result of a second fiscal year 1999
Program Announcement. The fiscal year 1999 appropriation funded 98
Concept Awards, and negotiations for 206 awards to be funded with the
fiscal year 2000 appropriation have begun and should be completed by
September 30, 2001.
As you know, Congress appropriated $175 million for the fiscal year
2001 BCRP. The fiscal year 2001 Program Announcement was this month.
Following a two-tier review, all awards will be negotiated by September
2002.
The outcomes of the BCRP-funded research can be gauged, in part, by
the number of resultant publications, abstracts/presentations, and
patents/licensures reported by awardees, to date. There have been 2,300
publications in scientific journals, 1,800 abstracts and 30 patents/
licensure applications.
The American people can truly be proud of their investment in the
DOD BCRP.

POSITIVE FEEDBACK ON THE DOD BCRP

The National Breast Cancer Coalition has been the driving force
behind this program for many years. The success of the DOD Peer-
Reviewed Breast Cancer Research Program has been illustrated by two
unique assessments of the program. The Institute of Medicine (IOM),
which originally recommended the structure for the program,
independently re-examined the program in a report published in 1997.
Their findings overwhelmingly encourage the continuation of the program
and offer guidance for program implementation improvements.
The 1997 IOM review of the DOD Peer-Review Breast Cancer Research
Program commended the program and stated that, ``the program fills a
unique niche among public and private funding sources for cancer
research. It is not duplicative of other programs and is a promising
vehicle for forging new ideas and scientific breakthroughs in the
nation's fight against breast cancer.'' The IOM report recommends
continuing the program and establishes a solid direction for the next
phase of the program. It is imperative that Congress complement the
independent evaluations of the DOD Breast Cancer Research Program, as
well as reiterate their own high level of commitment to the Program by
appropriating the funding needed to ensure its success. The IOM report
has laid the groundwork for effective and efficient implementation of
the next phase of this vital research program, now all that it needs is
the appropriate funding.
In addition to the IOM report, the DOD Peer-Reviewed Breast Cancer
Research Program reported the progress of the program to the American
people during two public meetings called the ``Era of Hope'' (one in
1997, and one in 2000). These have been the only times that a federally
funded program reported back to the public in detail not only on the
funds used, but also on the research undertaken, the knowledge gained
from that research and future directions to be pursued. These meetings
allowed scientists, consumers and the American public to see the
exceptional progress made in breast cancer research through the DOD
Peer-Reviewed Breast Cancer Research Program.
At the first ``Era of Hope'' meeting in 1997, many scientists
expressed their enthusiasm for the program and the opportunity to work
substantively with consumers at every step of the research process. In
fact, the scientists who have seen first hand the benefits of the DOD
Peer-Reviewed Breast Cancer Research Program have issued a strong
statement that in their scientific judgement the program should
continue:

``. . . we urge that this program receive ongoing funding.
This program has been broadly defined such that the research
performed will be of benefit not just for breast cancer, but
for all cancers and other diseases.''

This enthusiasm was reiterated at the second Era of Hope meeting
last year.
The DOD Peer-Reviewed Breast Cancer Research Program has attracted
bright, fresh scientific minds with new ideas and has continued to open
the doors to how they think about breast cancer research and research
in general.

COMMITMENT OF THE NATIONAL BREAST CANCER COALITION

The National Breast Cancer Coalition is highly committed to the DOD
program in every effort, as we truly believe it is one of our best
chances at finding a cure or prevention for breast cancer. The
Coalition and its members are dedicated to working with you to ensure
the continuation of funding for this program at a level that allows
this research to forge ahead.
In May of 1997, our members presented a petition with over 2.6
million signatures to the Congressional leaders on the steps of the
Capitol. The petition called on the President and the U.S. Congress to
spend $2.6 billion on breast cancer research between 1997 and the year
2000. Funding for the DOD Peer-Reviewed Breast Cancer Research Program
was an essential component of reaching the $2.6 billion goal that so
many women and families worked to gain.
Once again, NBCC is bringing its message to Congress. Just a few
weeks ago, many of the women and family members who supported the
campaign to gain the 2.6 million signatures participated in NBCC's
Annual Advocacy Training Conference here in Washington, D.C. More than
500 breast cancer activists from across the country joined us in
continuing to mobilize behind the efforts to eradicate breast cancer.
The overwhelming interest in, and dedication to eradicate this disease
continues to be evident as people are not only signing petitions, but
are willing to come all the way to Washington, D.C. to deliver their
message about the importance of our commitment.
Since the very beginning of this program, in 1993, Congress has
stood in support of this important investment in the fight against
breast cancer. In the years since then, Mr. Chairman, you and this
entire Committee have been leaders in the effort to continue this
innovative investment in breast cancer research.
NBCC asks you, the Defense Appropriations Subcommittee, to
recognize the importance of what you have initiated. What you have done
is set in motion an innovative and highly efficient approach to
fighting the breast cancer epidemic. What you must do now is continue
to support this effort by funding research that will help us win this
very real and devastating war against a cruel enemy.
Thank you again for inviting me to testify and giving hope to the
2.6 million women living with breast cancer.

Senator Stevens. Mr. Pearce, American Chemical Society,
please.

STATEMENT OF ELI PEARCE, Ph.D., PRESIDENT-ELECT,
AMERICAN CHEMICAL SOCIETY

Mr. Pearce. Chairman Stevens and Senator Inouye, good
morning and thank you for the opportunity to testify today. My
name is Eli Pearce and I am President-elect of the American
Chemical Society (ASC). A congressionally chartered
organization, the American Chemical Society represents 163,000
chemical scientists and engineers.
I am pleased to appear before you today on behalf of the
society to share our views on the importance of strengthening
the Nation's investment in basic defense research. As a
professor of chemistry at Polytechnic University in Brooklyn,
New York, I know first-hand the importance of DOD research. The
society thanks the subcommittee for the substantial increases
it provided for defense research in fiscal year 2001, which was
an important step toward reversing the declines that the
defense research programs experienced in the 1990's.
Mr. Chairman, the ACS urges the committee to increase the
science and technology program 10 percent to $10 billion for
fiscal year 2002. This is not an arbitrarily chosen target. In
fact, it is consistent with the longstanding recommended level,
reiterated this spring by the Department's own science board. A
strong, steady investment in the science and technology
program, especially in the 6.1 basic research account, will
enable DOD to capitalize on synergies between new discoveries
and developing technologies.
Currently DOD must decline almost as many highly rated
grant proposals as it can fund. These are lost opportunities.
We are delighted that President Bush has emphasized the need to
make the long-term science and technology investments required
to safeguard our national security, not just this year or next
year, but 10 and 20 years down the line. As you know, the
President proposes to increase defense Research and Development
(R&D) programs by $20 billion over 5 years, including $2.6
billion in fiscal year 2002.
Although the administration has not specified which R&D
accounts would receive increases, we strongly recommend that
enough of this proposed increase be directed to the core
science and technology research accounts to achieve the $10
billion funding target.
Mr. Chairman, I would now like to share an example with you
of how fundamental scientific discoveries have helped the
Department of Defense solve long-term challenges. This example
comes from university researchers working with chemists at the
Naval Research Laboratory, exploring ways to uncover plastic
mines, which are difficult to detect with metal detectors. This
work has led to a new way to detect explosives using nuclear
quadrupole resonance (NQR). These life-saving devices,
successfully tested by the Navy in 1999, have significant
potential for increasing civilian airport security as well,
making NQR an interesting example of dual use technology.
Examples such as these are what DOD's science and
technology investments are all about, investing in those
fundamental areas of research that have the highest potential
for discoveries that can cut costs, save lives, and, above all,
advance our national security. To stay several technological
steps ahead of adversaries, we simply have no choice but to
invest in cutting edge science today.
Thank you for your attention to this important matter. The
American Chemical Society looks forward to assisting you in any
way possible.
Senator Stevens. Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF ELI PEARCE

Chairman Stevens, Ranking Member Inouye, and Members of the
Subcommittee: Good morning. My name is Eli Pearce, and I am President-
Elect of the American Chemical Society. I am also a chemist professor
at Polytechnic University in Brooklyn, New York. I am pleased to appear
before you today on behalf of the Society to share our views on the
importance of strengthening the nation's investment in basic defense
research.
The American Chemical Society is a nonprofit scientific and
educational organization that represents more than 163,000 chemical
scientists and engineers. The world's largest scientific society, ACS
advances the chemical enterprise, increases public understanding of
chemistry, and brings its expertise to bear on state and national
matters.
Advances in science and engineering have produced more than half of
our nation's economic growth in the last 50 years. They remain the most
important factor in the productivity increases responsible for our
growing economy and rising standard of living, economists agree. Each
field of science contributes to our diversity of strengths and
capabilities and has given us the flexibility to explore new fields and
apply science in unexpected ways. The Society thanks this subcommittee
for the substantial increases you provided for defense research last
year, which was a substantial step towards reversing the declines the
defense research programs experienced in the 1990's.
Mr. Chairman, the DOD program that our members are most concerned
about is the Science and Technology (S&T) program. It is clearly the
bedrock of the Department's Research, Development, Test and Evaluation
activity and we urge the Subcommittee to approve strong funding in this
core area. Specifically, ACS urges the Committee to increase DOD's S&T
program 10 percent to $10 billion this year, up from its level of $9
billion in fiscal year 2001.
DOD's S&T program consists of 3 parts commonly known as the 6.1,
6.2, and 6.3 accounts. DOD's basic research, or 6.1 account, is
critical to maintaining the technological edge that has been so central
to our national security. DOD's basic research, 60 percent of which is
conducted by our nation's universities, not only provides long-term
military benefits but is crucial to the basic health of many science
and engineering disciplines, including chemistry, physics, mathematics,
computer science, and materials science. DOD-supported academic
research supplies new knowledge and understanding in these fields and
trains for the next generation of scientists and engineers in
disciplines critical to our national security. Currently, DOD must
decline almost as many highly-rated grant proposals as it can fund.
These are lost opportunities for significant discoveries. Increases in
core, peer-reviewed research in chemistry, materials, and other areas
are essential to lay the foundation for leading-edge battlefield
technology.
Research funded through the Applied Research (6.2) and Advanced
Technology Development (6.3) accounts enable fundamental science
discoveries to be integrated into new technologies and applications,
some of which also may be useful in the civilian sector. A strong,
steady investment in these three accounts, which make up the DOD S&T
program, will enable DOD to capitalize on synergies between new
discoveries and developing technologies.
We are delighted that President Bush has emphasized the need to
make the long-term S&T investments needed to safeguard our national
security--not just this year or next year, but 10 or 20 years down the
line. As you know, Mr. Chairman, President Bush proposes to increase
defense R&D programs by $20 billion over 5 years, including $2.6
billion in fiscal year 2002. Although the Administration did not
specify which R&D accounts would receive increases, we strongly
recommend that a significant proportion be directed to the core S&T
research accounts. This would help achieve the $10 billion funding
level many groups are seeking for defense science and technology, which
is in line with the levels recommended by the Department's own Science
Board. In 1998, the Defense Science Board concluded that approximately
3.5 percent of the total defense budget should be invested in the S&T
program to maintain military technological superiority. The Board
reiterated this position in an updated report released just this month.
Although we often hear about stealth technologies, smart bombs,
night vision and the like, we rarely hear about the incredible
scientific discoveries that inspire and advance these types of
developments. This is what DOD's S&T investments are all about--
investing in those fundamental areas of research that have the highest
potential for advancing our national security.
Research investments being made today will result in discoveries
that can cut costs and save lives. For example, Air Force researchers
discovered ways to remove more than 95 percent of the nitrogen oxides
and sulfur dioxide from the exhaust of jet and diesel engines. The new,
highly effective exhaust systems help the Air Force filter tons of
pollutants and avoid the fuel costs associated with carrying heavy
pollution control equipment. In addition, university researchers and
chemists at the Naval Research Laboratory are working on new ways to
uncover plastic mines, which are difficult to detect with regular metal
detectors. This work has led to a new way to detect explosives, using
Nuclear Quadrupole Resonance (NQR). The basic science underlying NQR
began back in the 1980's, and has relied on improvements in magnetic
resonance imaging as well as the development of new materials. This
potentially life-saving device, tested by the Navy in Bosnia in 1999,
typifies the fundamental science necessary to serve unique national
security needs. These examples are areas of scientific research that
industry prefers to avoid because of the small financial returns
associated.
Mr. Chairman, we fully recognize that crafting budgets with limited
resources means difficult decisions. We also recognize the careful
balance that must be struck between current obligations and future
opportunities. But, in our judgment, we must avoid having future
opportunities take a back seat. We must realize that a strong
investment in the defense science and technology program, in which
technologies having potential military applications are explored over a
long time period, is fundamental to protecting the lives of soldiers
and maintaining our military's preeminent position during the next
century.
It's no secret that U.S. military operations in the foreseeable
future will occur in an increasingly complex world, where threats to
our security are more diffuse than during the Cold War. To respond to
these new threats, it is essential for DOD to invest in research that
increases understanding in key fields and fosters the development of
leading-edge technologies.
Put most simply, we are asking the Subcommittee to keep a close eye
on the long view of our national security. While I am not an expert on
national security, if history is any guide, advances in technology will
continue to transform the nature of combat, the safety of our troops,
and how aggression is deterred in the future. To stay several
technological steps ahead of future adversaries, we simply have no
choice but to invest in cutting-edge science today.
Thank you for your attention to this important matter. The American
Chemical Society looks forward to assisting you in any way possible.

Senator Stevens. Mr. Spiegel, Reserve Officers Association.

STATEMENT OF JAYSON L. SPIEGEL, EXECUTIVE DIRECTOR,
RESERVE OFFICERS ASSOCIATION OF THE UNITED
STATES

Mr. Spiegel. Thank you, Mr. Chairman. On behalf of the
Reserve Officers Association, we are grateful for the
opportunity to present our views with respect to how the fiscal
year 2002 budget may affect the Reserve components. We
appreciate each of your strong support of the National Guard
and reserves in the past and look forward to working with you
in the future.
In the interests of brevity, let me focus on just a few
issues, first being force structure. The Reserve components
remain the best bargain in DOD, costing about 25 percent of the
comparable active component soldier or unit. We are concerned
that as the review process continues in the Pentagon there may
well be efforts to further reduce the National Guard or Reserve
in the interest of generating budgetary savings. We would
submit that the Congress ought to approach any such
recommendations with caution.
The Reserves have been deployed to a much greater extent
than at any time in history. Reserve deployments are up 300
percent since 1990 even though the size of the Reserve force
has gone down approximately 30 percent. Given that, we would
submit that when you are in a hole you ought to start thinking
about stopping digging and to look much more seriously at how
best to structure DOD to capitalize on the individual skills
that Reserve components bring from their civilian lives.
Information technology, civil affairs, information warfare are
the kinds of things that reservists have expertise in and,
rather than cut those forces, we ought to think seriously about
how best to grow them.
Of course, it takes approximately 7 years to reconstitute a
reserve unit after it has been slated for deactivation. It is
not a renewable resource.
Let me draw the committee's attention to a late-breaking
development that may be of interest. Within the last 2 weeks, a
national marketing firm has surveyed public attitudes towards
the Reserve components and revealed that 94 percent of the
American public find that the Reserves, quite correctly, play a
significant role in defense policy, and two-thirds of the
American public would not support further reductions in the
Reserve components at this time in order to generate budgetary
savings.
A copy of the poll results will be circulated to each
Senate office this week. We think that once again the American
people have it right, that the Guard and Reserve are a unique,
cost-effective asset for executing national defense policy, but
they need to be adequately resourced. So we would first ask
that the committee not entertain any further reductions in the
size of the Reserve components.
We also recognize that the cost of training is a serious
issue and we would ask the committee to look seriously at the
size of the full-time support provided to the Guard and
Reserve, particularly on the Army side. The full-time support
people who do the work day to day enable the Reserve units to
train for their wartime skills on the weekend rather than
performing administrative or maintenance functions, and we
would ask that sufficient funding be provided for Active Guard,
Reserve, Training and Administration of Reserves (TARS), Air
Reserve Technicians (ARTS), Military Technicians (MILTECH's),
the entire panoply of full-time support that the reserve
components enjoy.
With respect to equipment, that has long been a problem in
the reserve components, whether the equipment cascades from the
active or is provided directly. The Guard and Reserve tend to
get the least modernized equipment than the active component.
We urge the committee to look very seriously at this issue. We
strongly support continuation of the National Guard and Reserve
equipment appropriation (NGREA). We recognize that the Pentagon
pledged to provide adequate funding for Guard and Reserve
equipment in their budget submit, thereby obviating the
continued need for NGREA. History demonstrates the Pentagon has
not done that and we would urge the committee to fund those
unique Guard and Reserve equipment priorities if the Department
does not do so.
Senator Stevens. Thank you very much. We appreciate your
recommendation.
[The statement follows:]

PREPARED STATEMENT OF JAYSON L. SPIEGEL

Mr. Chairman and Members of the Subcommittee: On behalf of the
members of the Reserve Officers Association from each of the uniformed
services, I thank you for the opportunity to present the association's
views and concerns relating to the Reserve components and the National
Defense Appropriations Act for Fiscal Year 2002.
At the outset, I must preface my testimony with the observation
that unlike previous years, at the moment we have no real details of
what the Department of Defense budget request contains. Thus, our
testimony must, of necessity, reflect requirements based upon last
year's submission and anticipated programmatic needs. We will provide
the committee with supplemental testimony and analysis at a later date
that will have the benefit of greater detail.
In the National Defense Authorization Act for Fiscal Year 1991, the
Congress stated that ``the overall reduction in the threat and the
likelihood of continued fiscal constraints require the United States to
increase the use of the Reserve components of the Armed Forces. The
Department of Defense should shift a greater share of force structure
and budgetary resources to the Reserve components of the Armed Forces.
Expanding the Reserve components is the most effective way to retain
quality personnel as the force structure of the Active components is
reduced. . . . The United States should recommit itself to the concept
of the citizen-soldier as a cornerstone of national defense policy for
the future.''

STUDIES AND ANALYSES

The results of recent force structure studies have proven
disappointing as far as detailed recommendations regarding the Reserve
components are concerned. Indeed, the detailed Reserve component
recommendations were largely manifested as significant reductions to
Reserve end strength underpinned by undue optimism. It remains to be
seen what changes to the national defense strategy may be forthcoming
as a result of the findings and recommendations of the National
Security (Hart-Rudman) Commission, the new administration's initial
Defense assessment, the National Defense Strategy, and the 2001 QDR.
Evolutionary or revolutionary, these changes will ultimately hinge on
affordability and the prudent acceptance of risk. Absent a fundamental
shift in national priorities, increases in the defense share of the
annual budget will be marginal at best.
Although earlier force structure reviews were described as being
threat-based rather than budget-driven, common sense and experience
says that both of these factors will play a large part in developing
the final product in both cases. Ultimately the recommended solution
will bear evidence of pressure from both sides of the equation. To
achieve balance in the face of unyielding economic constraint, force
structure will be modified and so, too, will the definition of the
perceived threat.
Clearly, this is not the way to develop a national defense strategy
for the next century; nevertheless, the actual product is more likely
to resemble this model than not. What may be salutary in this process
will be the necessity of modifying significantly the structure of the
Total Force to integrate components and to eliminate as much as
possible the current unnecessary redundancies that exist, both inter-
and intra-service and component. However the structure is finally
crystallized, one thing is virtually certain: our Reserve forces will
play an increasingly significant role in it and its employment.

GREATER RELIANCE ON RESERVE COMPONENTS

The 50 years of reliance on a large, Cold War, standing military
have ended. Confronted with sizeable defense budget reductions, changes
in the threat, and new missions, America's military answer for the
future must be a return to the traditional reliance on its Minutemen--
the members of the Reserve components. Can America's Reservists fulfill
their commitment to the Total Force--can they meet the challenge?
Operations Desert Shield and Desert Storm proved that the Reserve
components were ready and able. During the Gulf War, more than 265,000
Reservists were called to active duty. Of the total mobilized, 32
percent were from the National Guard and 67 percent from ``the
Reserve.'' More than 106,000 Reservists were deployed to Southwest
Asia. About 20 percent of the forces in the theater were members of the
Reserve components.
In Bosnia and Kosovo, more than 48,000 Reservists have again
demonstrated their readiness and their capability to respond to their
nation's call. For the past several years, the Reserve components have
provided approximately 12.5 million support days to the Active
components annually. That equates to some 35,000 support years
annually, the equivalent of two Army divisions.
A strong, viable Reserve force is an inseparable part of America's
military, a cost-effective augmentation to the Active force and the
marrow of the mobilization base. Ultimately, mobilizing Reserve forces
is the litmus test and the enabler of public support and national will.
The early and extensive involvement of the Guard and Reserve in the
Gulf War was instrumental in achieving the strong public support of the
military and our national objectives.

RESERVE COMPONENTS' COST-EFFECTIVENESS

ROA has long maintained that a proper mix of Active and Reserve
forces can provide the nation with the most cost-effective defense for
a given expenditure of federal funds. Reservists provide 38 percent of
the Total Force, but cost only 7.5 percent ($23.4 billion) of the
fiscal year 2002 DOD budget. They require only 23 percent of active-
duty personnel costs, even when factoring in the cost of needed full-
time support personnel. We need only consider the comparable yearly
personnel (only) costs for 100,000 Active and Reserve personnel to see
the savings. Over a 4-year period, 100,000 Reservists cost $3 billion
less than 100,000 Active duty personnel. If the significant savings in
Reserve unit operations and maintenance costs are included, billions
more can be saved in the same period. ROA is not suggesting that DOD
should transfer all missions to the Reserve, but the savings Reservists
can provide must be considered in force-mix decisions. It is incumbent
upon DOD to ensure that the services recognize these savings by
seriously investigating every mission area and transferring as much
structure as possible to their Reserve components.

ARMY RESERVE

The Army Reserve has played a major role in the Army's increased
post-Cold War OPTEMPO. When the Army has deployed, so has its Army
Reserve. The downsizing of America's Army and the Army's decision to
transfer much of its combat service (CS) and combat service support
(CSS) into the Reserve have required a much greater reliance by the
Army on its Army Reserve. The Army can no longer go anywhere or sustain
its operations once there without the support of its Reserve
components. However, this increased reliance has not generated adequate
funding in the Defense budget.
The expected fiscal year 2002 budget request, as have previous
budgets, appears to critically underfund the Army Reserve personnel,
operation and maintenance, and military construction accounts. These
resourcing shortfalls will adversely affect readiness and training and
ultimately the quality of life, the morale, and the retention of these
highly motivated and patriotic citizen-soldiers.
The Army Reserve's expected share of the Army budget request in the
fiscal year 2002 DOD budget request is $4.3 billion or 5.7 percent of
the entire $75.5 billion Army request. Separated into the Reserve
Personnel, Army (RPA) and the Operation and Maintenance, Army Reserve
(OMAR) accounts, the request is for approximately $2.6 billion RPA and
$1.7 billion OMAR. At those funding levels both accounts require
considerable plus-ups to fully fund known requirements--requirements
that were identified during the development of the President's budget,
but because of insufficient funding fell below the line and were not
resourced. Critical/executable funding shortfalls identified in the RPA
and OMAR areas alone is expected to exceed $300 million.

Reserve Personnel, Army
The fiscal year 2001 authorized end strength for the Army Reserve
is 205,300. Reliance on the Guard and Reserve for involvement in real
world operations and domestic contingencies increased considerably
during the last decade. During this evolution of the Reserve from a
break-glass-in-case-of-emergency-type operation to its current role as
a full partner in the Army's real world operations, adequate resourcing
to support readiness, training, manning and equipping of the Reserve to
enable it to support the Army and our national military strategy has
become critical.
The expected RPA budget request for $2.6 billion will not provide
adequate funds to train, educate, man, and support Army Reserve
personnel and units at levels required for immediate mobilization and
deployment. Based on preliminary budget estimates we believe the fiscal
year 2002 Defense budget request will critically underfund the Army
Reserve by over $150 million in several Reserve Personnel, Army
accounts. For example:

Active Guard Reserve (AGR) Personnel
Active Guard Reserve (AGR) personnel give USAR units the ability to
maintain a high-level of readiness by providing the additional
training, command and control, technical functional, and military
expertise required to efficiently and effectively transition from
peacetime to a wartime posture. One of the greatest challenges facing
the Army Reserve today is an insufficient number of full-time manning
(FTM) authorizations to support the over 1,900 USAR units in day-to-day
operations.
The Army Reserve has the lowest percentage of FTM of all the
Reserve components and historically has been the component most
frequently called and deployed. The shortage of FTM personnel
constrains high priority units and causes personnel turbulence in lower
priority units, as personnel are cross-leveled to fill higher priority
units.
The Army has established an 11-year ramp of 300 AGRs each year
beginning in fiscal year 2002 to increase the level of AGR FTM
positions within the USAR. Projected fiscal year 2002 costs to support
the fiscal year 2001 AGR increase and the fiscal year 2002 ramp is
projected to be $23.5 million. The Army Reserve has a critical/
executable-funding shortfall of $23.5 million in its AGR FTM program.

Incentives Program
The USAR has validated requirements for $147 million to support its
fiscal year 2002 incentives programs. Expected funding for the program
based on the September 2000 Best Estimate (BES) is $115 million leaving
a critical shortage of $32 million. Any shortfall will put at risk
initial payments for non-prior service, prior service, reenlistment,
and health professional recruiting and retention bonuses; its health
professional loan repayment program; the Montgomery GI Bill Kicker; and
College First. Recent congressional actions to enhance incentives have
increased the non-prior service bonus from $5,000 to $8,000, the health
professional loan repayment from $20,000 to $50,000, and the
reenlistment window from 10 to 14 years. We believe the Army Reserve
will have a critical executable funding shortfall of $32 million in its
incentives program.

Fiscal Year 2002 Individual Duty Training (IDT) Shortfall
The fiscal year 2002 validated requirement to fund the 48 statutory
IDT drills for Army Reserve unit soldiers is $712.5 million. Projected
levels of funding for IDT in fiscal year 2002 will only fund 44 of the
48 statutory drills--failing to fund one month's worth of drills per
soldier. The projected level of funding is $662.5 million leaving a
critical shortfall of $50 million. The expected executable/critical
shortfall for Individual Duty Training is $50 million.
Operations And Maintenance, Army Reserve (OMAR)
The expected fiscal year 2002 DOD budget request for the Army
Reserve Operations and Maintenance (OMAR) account is $1.6 billion. We
believe there is at least a $157 million executable/critical OMAR
shortfall in the fiscal year 2002 budget request that will force the
Army Reserve to compensate by further reducing equipment and facility
maintenance, and supply purchases. Backlogs for maintenance and repair
continue to grow and necessary support to essential training continues
to deteriorate, decreasing readiness and contributing to a lower
quality of life for unit soldiers.
Currently the expected OMAR appropriation is experiencing serious
resourcing shortfalls in FTM, recruiting and advertising, automation
system life cycle support, and the backlog of maintenance and repair
amounting to more than $160 million.
Full-Time Manning: MILTECHs
The lack of adequate numbers of required military technicians
(MILTECHs) in USAR units and maintenance facilities jeopardizes unit
readiness. The Army has a validated requirement for 8,990 MILTECHs
based on staffing standards that require minimum staffing levels of
required MILTECHs of 90 percent for Force Package (FP)1 units, 80
percent for FP2 units, 70 percent for FP3 units and 65 percent for FP4
units. These percentage levels are considered the ``high-risk''
threshold for USAR and ARNG MILTECH authorizations.
The current USAR MILTECH endstrength of 7,094 is 1,896 below the
validated requirement of 8,990. These MILTECHs will enable units to
maintain a higher level of readiness by providing additional training,
technical, functional and military expertise required to efficiently
and effectively transition from peacetime to wartime posture.
The Fiscal Year 2001 Defense Appropriations Act and the 2001 NDAA
recognized the requirement for additional FTM by providing $20.5
million in OMAR funding and the authorization for 650 MILTECH in fiscal
year 2001. The Army has established a ramp of 250 MILTECH each year
beginning in fiscal year 2002 to increase the level of MILTECH FTM
positions within the USAR. Projected fiscal year 2002 costs to support
the fiscal year 2001 MILTECH increase and the fiscal year 2002 ramp is
projected to be $7.8 million. The executable/critical shortfall for the
USAR MILTECH program is $7.8 million.

Advertising
Army Reserve advertising is expected to be underfunded by at least
$13.5 million in the fiscal year 2002 budget request. Without adequate
advertising funding, the Army Reserve will be unable to overcome the
market effects of a strong economy and the low propensity of our
nation's youth to enlist in the military.
The USAR fiscal year 2002 recruiting advertising requirement is
$60.6 million, but it is funded at only $47.1 million. The Army Reserve
must expand its Internet advertising to keep pace with new technology
and media habits of the targeted market. It must also consider the
expanding female and Hispanic markets. Women constitute only 25 percent
of the USAR force, but can volunteer for 99 percent of the Army's job
skills. Hispanics are also underrepresented in the USAR. The USAR
recruiting environment is difficult. A good offset is a vibrant,
adequately funded ad campaign that reaches the target audiences. The
executable/critical shortfall for advertising is $13.5 million.

USAR Reserve Component Automation System (RCAS) Life Cycle Support
The RCAS infrastructure enables the USAR to integrate rapidly into
joint organizations and is required to support Joint and Army C\4\/IT
systems/concepts, i.e., Defense Message System (DMS), Common Access
Card (CAC) Global Combat Support System (GCSS) and others. The life
cycle support of the fielded RCAS systems becomes the responsibility of
each Reserve component in fiscal year 2002. The Army has insufficient
TOA to fully resource these costs that the USAR must pay to maintain
the systems worth $2.4 billion in capital investment.
RCAS is crucial to the USAR day-to-day CONUS/OCONUS operations and
is designed to support virtually every type of mission including
effective C\2\, soldier's pay, mobilization, training, sustainment, and
administration. The executable/critical shortfall for the RCAS Life
Cycle Support is $45.2 million.

Real Property Maintenance
The USAR currently operates facilities in approximately 1,400
locations worldwide (CONUS, Puerto Rico, Germany, and the Pacific) and
commands and controls 6 installations including 2 power projection
installations (Fort McCoy, WI, and Fort Dix, NJ).
Real property maintenance is funded at only 61 percent of the
fiscal year 2002 requirement. Historically, inadequate RPM funding has
contributed to poor conditions in many USAR facilities, forcing unit
commanders to spend scarce mission dollars for repairs and to defer
repairs to critical facility systems such as roofs, plumbing,
electrical, etc., accelerating facility and system deterioration. This
threatens soldier safety, and health; degrades training, and hampers
recruiting and retention efforts, while lowering the soldiers' quality
of life. The projected fiscal year 2002 budget request critically
underfunds the executable Real Property Maintenance account by at least
$57.0 million.

National Guard And Reserve Equipment Request
The Office of the Secretary of Defense in its February 2000
``National Guard and Reserve Equipment Report for Budget Year 2001'',
(the 2001 report is not available) states that the Army Reserve has 89
percent of its Equipment Readiness Code A (ERC A) equipment items and
87 percent of its ERC-P items on-hand for all units. This represents a
projected shortfall of equipment through fiscal year 2005 that exceeds
$2.1 billion.
The greatest source of relief to Army Reserve equipment shortages
is the National Guard and Reserve Equipment Appropriation (NG&REA) that
funds equipment requirements identified by the services but not
resourced due to funding shortfalls in the FYDP. Since 1981 the Army
Reserve has received, through the oversight of Congress, nearly $1.5
billion in equipment through the NG&REA. Without the appropriation the
Army Reserve would still be struggling to reach 50 percent equipment on
hand (EOH). The NG&REA works, and works well. ROA urges the Congress to
continue the NG&REA and to fully fund the Army Reserve $458 million
fiscal year 2002 equipment modernization requirement.

AIR FORCE RESERVE

Since the Air Force Reserve came into existence in 1948 until
Desert Storm, it had been involved in 10 contingencies. In the time
since Desert Storm it has been involved in over 30 contingency, nation-
building and peace keeping operations. The reasons are obvious: the
Active component has lost 700,000 people at the same time the United
States has become the only super power on Earth. That has forced the
Reserve component, which lost 200,000 members in the draw down, to
assume a much larger share of the mission.
Its key issues are people, readiness and modernization. With
support for those issues from the active the Air Force and the
Congress, the Air Force Reserve has become an indispensable national
asset. ROA thanks both for consistent support, that has allowed the
command to demonstrate its skill in carrying out its portion of the
national military strategy.
Specific Issues
Recruiting and Retention.--The active duty recruitment pool has
diminished from 50,000 in the early 1990s to 13,000 in 2001. Further
complicating the recruiting challenge is the current Air Force OPTEMPO.
The Air Force Reserve Command would benefit from either reduced OPTEMPO
or an increase in force structure. ROA urges the Congress to provide
authorization for a force structure adequate for today's OPTEMPO and to
provide parity of benefits with Active component members.
Modernization.--The Air Force Reserve Command must receive modern
equipment at the same rate as the Active component. A prime example
follows. As of spring, 2001 there is no stated replacement aircraft for
AFRC's 40 C-141 strategic airlifters. By 2006 all C-141s will be
retired. With them will go the 5,000 highly trained personnel who fly,
maintain and support that portion of the strategic airlift mission and
their 1.9 million ton-mile-per-day airlift capability. ROA urges the
Congress to direct DOD to keep a minimum of 60 C-141 aircraft in AFRC
until sufficient numbers of C-17s or a combination of C-17s and
refurbished C-5s are acquired to keep all AFRC units fully equipped and
to fulfill the ton-mile requirement of the national military strategy.
To a war-fighting CINC ``interoperability'' means that all forces
in his fight must have the same capability. Without it, the forces with
less capability are made irrelevant. Thus, day/night proficiency must
be the same in both Active and Reserve components. Not just one
component, but both components must have precision munitions
capability. Both must have self-protection and electronic warfare
capabilities, and both must have identical digital battlefield data-
link equipment. ROA urges the Congress to fully fund the modernization
of all AFRC assets.

NAVAL RESERVE

Thanks to the Congress, funding for fiscal year 2001 enabled the
Naval Reserve to resource peacetime contributory support, bonuses, a
substantial pay raise, real property maintenance, base operating
support, and recruiting advertising/support. It is clearly evident that
Congress has given full recognition to the significant and well-
recognized compensating leverage offered by today's Naval Reserve,
which represents 20 percent of the Navy, yet expends only 3 percent of
the budget.
Unfortunately, without a detailed fiscal year 2002 President's
Proposed Budget, the Reserve Officers Association must withhold
substantive focused comment; however, we await the QDR01 and other
national security reviews with anticipation for the continued
recognition of the value of the Naval Reserve to our nation's security
posture. The Naval Reserve's top five Issues continue to be manpower,
training, equipment and systems compatibility, force shaping and fleet
support and significant progress has been made in addressing many of
these issues. Nevertheless, substantial unfunded requirements continue
to slow progress toward complete force integration with the Fleet and
cost greater amounts of scarce operations and maintenance resources
than is desirable must be expended on operating and maintaining dated
and obsolete, low performance, systems and platforms.
Naval Reserve end-strength was reduced from 90,288 in fiscal year
2000 to 88,900 in fiscal year 2001. The issue of peacetime contributory
support versus surge training requirements continues to pull Naval
Reserve personnel policies and operations in two different, not wholly
compatible, directions. Highly trained, motivated and experienced Naval
Reserve personnel should not be lost to the Naval Reserve Force during
budget-driven reductions until the future national security direction
is determined. ROA strongly urges the Congress to defer reduction of
Naval Reserve end-strength below 88,900 pending completion of a
comprehensive reexamination of the Naval Reserve's role to be conducted
after the results of the QDR01 and other national security reviews are
completed.

Specific Issues
Two Naval Reserve personnel programs in particular should be
maintained: (1) Active Duty for Training is a program that provides
Naval Reservists to the Navy CinCs for unique, short-term periods in
support of Fleet requirements. ROA supports a funding level of $13.8
million for fiscal year 2002 for this highly successful program. (2)
Additional support for non-prior service accessions allows Naval
Reserve recruiters greater direct access to the public. This program
accounts for approximately one-third of new USNR enlistees. ROA
encourages the Congress to maintain current levels of funding for this
effort in fiscal year 2002.

Equipment Modernization
Over the past years, much of the progress made in improving the
readiness and capability of Naval Reserve units has been the direct
result of congressional action--to designate new equipment for the
Naval Reserve in the National Guard and Reserve Equipment Appropriation
(NGREA) and to earmark funding for the Naval Reserve in the traditional
procurement appropriations. Accordingly, ROA has identified unfunded
fiscal year 2001 Naval Reserve equipment requirements for consideration
by Congress for addition to the administration's request for fiscal
year 2002, in either the NGREA or as earmarked additions to the Navy's
traditional procurement appropriations.
Among the top priorities are the C-40 aircraft, IT infrastructure,
and the P-3 AIP/BMUP kits. As the number one priority of the Naval
Reserve, the Boeing C-40A ``Clipper'' transport aircraft is of vital
importance to fleet logistics as the Naval Reserve provides 100 percent
of the Navy's organic lift capability, and direct logistics support for
fleet CINCs in all operating theaters. Commercial aircraft are replaced
every 7 to 8 years, yet the average age of the Naval Reserve's C-9
fleet is approximately 25 years. Obsolescence is being reached because
of deficiencies in the avionics suite, power plant, and the aging of
the airframe.
The P-3 AIP (ASUW Improvement Program) and BMUP (Block Mod Update
procurement) kits bring Reserve maritime patrol aircraft in line with
Active fleet capabilities and broaden the mission of the Reserve P-3Cs
beyond the role of anti-submarine warfare. Additional funding is
essential to sustain the momentum of the P-3C Update III upgrade
program and to achieve complete compatibility with the Active fleet for
the remaining 13 aircraft that have not yet been reconfigured.
Equipment modernization is the most critical priority for the Naval
Reserve. ROA strongly urges the Congress to provide $471.6 million to
support the vital and continuing Naval Reserve unfunded equipment needs
in fiscal year 2002.

MARINE CORPS RESERVE

Because the Administration's fiscal year 2002 budget proposal has
not been submitted in detail for congressional consideration at the
time of testimony, the ROA supports the increase in end-strength to a
level of 39,558 in fiscal year 2001 for the Selected Marine Corps
Reserve (SMCR), but defers judgment of the fiscal year 2002 proposed
end-strength. There was also slightly increased funding for Marine
Corps Reserve personnel, to $437 million in fiscal year 2001, an
increase of a little more than $1 million from fiscal year 2000.

Funding Shortfalls
The request to support the Marine Corps Reserve appears to be
underfunded in the Operation and Maintenance, Marine Corps Reserve
(O&MMCR) and Reserve Personnel, Marine Corps (RPMC) appropriations.
Maintaining the necessary funding to pay, educate, and train our Marine
Reservists, and to enable the units of the Marine Forces Reserve to
conduct appropriate training and operations is the vital first step to
combat readiness and sustainability.
Additional O&MMCR funds are needed for initial issue of equipment,
replenishment and replacement of equipment, exercise support, and
organizational and depot maintenance. Only by equally equipping and
maintaining both the Active and Reserve forces will Total Force
integration be truly seamless. Foremost is the maintenance of aging
equipment. The Marine Corps Reserve armored vehicles' age, coupled with
increased use, contribute to this requirement.
The Marine Corps Reserve personnel appropriation also appears to
continue to be underfunded. The major deficiency in this appropriation
is in the area of active duty for special work (ADSW). This valuable
individual activity is directly related to probable wartime tasking.
The Congress's strong support to maintain ADSW funding allows Reserve
Marines to sustain wartime skills while directly reducing the operating
tempo of their active duty counterparts. Further, ADSW provides
critical support to Active force commanders, allowing them to augment
Regular forces with Reserve Marines to participate in both USMC
combined arms exercises and scheduled joint exercises in support of the
warfighting CINCs. These are win-win efforts, not only making up
critical shortfalls in the Regular Marine Corps forces, but also
providing invaluable training for Marine Reservists.
The authorization of 58 additional Active Reserve personnel in
fiscal year 2001 is essential to increased readiness and employment of
Marine Corps Reserve units, and recognized the serious difficulties
created for the Marine Corps Reserve by the Quadrennial Defense Review
1997 (QDR97) reductions in the Active Reserve program. These reductions
significantly hampered the Reserve's ability to continue to meet its
augmentation and reinforcement mission. The QDR-directed reductions of
Active Duty support of the Marine Corps Reserve, particularly the
Active Reserve program, if implemented, will continue to undermine the
Marine Corps Reserve's ability to maintain readiness and meet
requirements for Reserve employment. To fiscal year 2000, the Marine
Corps Reserve has taken the cuts directed by QDR97 and will continue
with reductions through fiscal year 2003 if directed, but every cut
taken in the Marine Corps Reserve decreases the operational or tactical
capabilities of the Marine Corps. ROA strongly urges the Congress to
direct DOD to defer any further QDR97-recommended reductions in the
Marine Corps Reserve until these reductions can be reviewed by QDR01
and the other ongoing national security reviews.

Equipment Modernization
Modern equipment continues to be critical to the readiness and
capability of the Marine Corps Reserve. Although the Marine Corps
attempts to implement fully the single acquisition objective philosophy
throughout the Marine Corps Total Force (Active and Reserve), there are
some unfilled Reserve equipment requirements that have not been met
because of funding shortfalls.
To achieve the readiness necessary to quickly mobilize and augment
the Active Marine Forces in time of national emergency, Marine Forces
Reserve units must be equipped in the same manner as their Active force
counterparts. The top modernization requirement of Marine Corps Reserve
continues to be Engineering Change Proposal 583 (ECP-583), which will
make its F/A-18A aircraft compatible with the F/A-18Cs and Ds utilized
by the Active force. As part of a complete modernization to achieve
complete Force interoperability and support compatibility, this
initiative will upgrade the aircraft to state of the art avionics and
weapons systems. Acceleration of V-22 fielding is critical to the
future readiness of Marine Corps aviation. Reserve CH-46Es will not be
replaced for at least another 10 years at the current planned
production rate. Further, until the V-22 is fielded to the Reserve, the
Marine Corps Reserve will not be able to take full advantage of the
skills of V-22-trained Marines who separate from the Active forces. The
increasing cost of CH-46E maintenance and this potential loss of V-22
expertise can be avoided by accelerated production and earlier fielding
of the V-22 across the Total Force.

COAST GUARD

We are fully aware that this committee is not responsible for the
direct funding of the Coast Guard or the Coast Guard Reserve.
Nevertheless, funding for the Coast Guard is very austere, with only
$3.199 billion in operational funding, the minimum level required for
basic services. Similarly, funding for the Department of Defense and
the Department of the Navy remains constrained. Therefore, it is vital
to be farsighted as we cross into the 21st century to ensure a
continued robust sea power.
The Coast Guard currently operates ships with high personnel and
maintenance costs. Some ships have been in service for more than 50
years. Simply stated, the continued protection of the public, at a
lower cost, requires further investment to enable the Coast Guard to
design more capable and less labor-intensive ships and aircraft.
Without the necessary investment, pressure will continue to build on
the operational account, as anticipated lower personnel and maintenance
costs that would be achieved through investment become unachievable.
The Reserve Officers Association urges the Congress to fully support
the Coast Guard's Integrated Deepwater Project, its new start
authority, and the Navy's acquisition of assets for the Deepwater
project.

COAST GUARD RESERVE

In the Defense Operations arena, the six Coast Guard Reserve port
security units (PSUs) continued to provide non-redundant force
protection to high-value assets in strategic seaports of debarkation.
In December, following the terrorist attack on the U.S.S. Cole,
elements of PSU 309, based in Port Clinton, Ohio, deployed in support
of CENTCOM.
For fiscal year 2002, the priority is retain its force of 8,000 and
ensure that Coast Guard Reservists are fully trained, equipped and
ready to perform their mission. Specifically, for fiscal year 2002, the
Coast Guard will work to:
-- Improve the training and support infrastructure for the current
force. This includes assurances of the availability of formal
training and structured on-the-job training opportunities.
-- Improve support services, such as full-time support staffing, and
mitigate Reservists' out-of-pocket expenses, such as berthing
for those who live over 50 miles from their drill sites.
Longer term, the Coast Guard will continue to refine and prioritize
Reserve force requirements. There is considerable pent-up demand for
additional Reserve support from operational commanders and headquarters
program managers, and we believe the best course is to address these
needs incrementally over several years so as not to exceed the
service's ability to support and service the SELRES force.

Coast Guard Selected Reserve Strength
The fiscal year 2002 administration request is anticipated to
maintain the Coast Guard Selected Reserve's authorized end-strength at
the 8,000-level. In 1997, the commandant, as directed by OMB, conducted
an in-depth study that justified a requirement for nearly 12,300 Coast
Guard Reservists. However, the 1997 study did not include any maritime
security requirements needed to counter more recently identified
homeland security risks in U.S. ports and waterways from weapons of
mass destruction. As a result of this and other issues, Coast Guard is
currently updating the roles and mission study to identify more
accurately the increased Reserve force end strength and skill mix.

Coast Guard Reserve Funding
The administration has requested $83.2 million for the Reserve
Training (RT) appropriation for fiscal year 2002. Given the present
procedures for reimbursement for operating expenses and direct payments
by the Coast Guard Reserve, this is the minimum needed to fund a
training program for 8,000 personnel. Even at the $83.2 million funding
level, Coast Guard reservists would continue to receive only 12.5 days
of annual training (AT) each year (all the other armed services
prescribe 14 days' AT as required by statute). In additional, the RT
appropriation will not be able to fund 15 days' ADT and 60 drills per
year for Reservists assigned to expeditionary units to ensure they are
ready for prompt deployment.
The funding required in fiscal year 2001 to support the full 8,000-
level authorized was approximately $80 million. It should, however, be
noted that the fiscal year 2001 appropriations bill, in appropriating
$80 million for the Coast Guard Reserve, limited the amount of Reserve
training funds that may be transferred to operating expenses to $22
million. Given the continuing high OPTEMPO/PERSTEMPO stress on the
entire Coast Guard workforce and the congressional language to hold
strength insofar as possible, the Coast Guard Reserve is trying to
maintain its strength for this year.

Coast Guard Reserve Equipment
In fiscal year 1998, the Congress provided over $13 million for the
much-needed refurbishment of its existing three port security units and
the establishment of three additional port security units. Today, the
Coast Guard Reserve is in need of equipment for its mobile support
unit, as well as chemical, biological, and radiological defense
equipment.
The mobile support unit (MSU) is designed to be a limited
deployable logistical and maintenance support and repair facility
service for up to two co-located squadrons of Coast Guard 110-foot
patrol boats. This unit is staffed by Reservists and support the Active
component (and the combatant commanders-in-chief) when deployed for
operations overseas. The MSU provides on-site repair facilities for
hull maintenance, engineering and electronics systems for use by
support personnel assigned for operational maintenance.
Chemical, biological, and radiological defense is required for
Coast Guard Reserve personnel assigned to marine safety offices that
have Department of Defense strategic load-out responsibilities.

CONCLUSION

Thank you for the opportunity to represent the Reserve Officers
Association's views on these important subjects. Your support for the
men and women in uniform, both Active and Reserve is sincerely
appreciated. I'll be happy to answer any questions that you might have.

Senator Stevens. Vice Admiral Lautenbacher.

STATEMENT OF CONRAD C. LAUTENBACHER, JR., VICE ADMIRAL,
U.S. NAVY [RETIRED], PRESIDENT, CONSORTIUM
FOR OCEANOGRAPHIC RESEARCH AND EDUCATION

Admiral Lautenbacher. Mr. Chairman, Senator Inouye, thank
you very much for the opportunity to appear before you this
morning and discuss the fiscal year 2002 defense budget. I am
the new President of the Consortium for Oceanographic Research
and Education. I believe most of you know my predecessor,
Admiral Jim Watkins. I have been in this position for several
months and it is a delight to be here, and also to express my
thanks to the committee in my former role as the Vice Admiral
in charge of Navy programming and budget development.
I understand the time is short, so I want to keep it to
four basic points that I would like to make this morning. The
first is that our organization, as well as me personally,
support a strong defense S&T budget. We believe it is critical
for the leadership of our country as well as for the strong
support of ocean science. As an example, the S&T budget for the
Department of Defense in 1993 was roughly $10 billion. Today it
is $9.1 billion.
We believe that this budget deserves the support of the
committee and if at all possible to raise this at least back to
the 1993 levels and get on track. The leadership of the country
in terms of economic development and research and technology
and industrial health and welfare depend on a strong defense
S&T budget.
The second point that I want to make from our organization
is that the national oceanographic partners program has become
an excellent vehicle for cross-agency cooperation. This act was
created by Congress--this was an act by Congress in 1996. It
has been working for 3 or 4 years now very well. It brings 14
agencies together from the Federal Government to work in
concert on ocean research and scientific issues. It is ready to
step up to the next level.
My third and fourth points are the level that that should
be stepped up to. There are two important initiatives that I
believe are national initiatives. One is an integrated coastal
and ocean observing system. If you ask any of the scientists in
our organization what is needed if we are going to get to the
next level of understanding of the issues that we need to
understand for climate, for control of resources, for public
policy, for quality of life, issues across our land that affect
even the farm lands in the middle of our country, not just
people who live on the coast, it is an ocean observing system.
It is understanding what is happening on our coasts from Maine
to Florida, in the Gulf, California, Alaska, Hawaii.
It is very important to us to be able to start building a
database to understand the processes that create things like
the carbon cycle and carbon sequestration and greenhouse gases,
as well as to manage the coastal resources that we have. This
integrated ocean observing system can be managed by the
National Oceanographic Partnership Office (NOPP) program and we
believe it is time to step up and put the right resources
against this.
The last point that I want to make is another system which
NOPP can help with very much and we would like your support on,
and that is the recapitalization of the university
oceanographic national laboratory system, or the UNOLS fleet.
These are ships which are manned by our universities in support
of national objectives. They help the Navy as well as basic
research and science within our universities. They pick up a
national workload as well as a workload from our coastal areas,
from our States.
The fleet is old at this point. It needs to be
recapitalized. It also needs help this year with its operating
funds. This is an important issue.
In closing, I would like to thank in terms of the NOPP
leadership the Office of Naval Research and our Naval
Oceanographic Office. They have been instrumental in trying to
make this program work and it is working very well.
Again, I appreciate the support of the committee for their
efforts on behalf of me when I was in the Navy and for our
organization of course. Thank you, sir.
Senator Stevens. Thank you very much, Admiral.
[The statement follows:]

PREPARED STATEMENT OF VICE ADMIRAL CONRAD C. LAUTENBACHER, JR.

Good morning, Mr. Chairman. I want to thank you for the opportunity
to testify on the fiscal year 2002 Defense budget. I am the President
of the Consortium for Oceanographic Research and Education or CORE for
short. CORE is the Washington, DC based association of U.S.
oceanographic research institutions, universities, laboratories and
aquaria. Our 63 members represent the nucleus of U.S. research and
education about the ocean. CORE is united by a commitment to a strong
defense science and technology base and believes that solid funding of
the 6.1 account is critical to our Nation's security.
For three and one-half years, I was responsible for preparing the
Navy five-year program. I believed deeply then as I do now, and it is
the CORE position as well, that the Navy 6.1 account needs to be
increased to meet the future needs of the Navy. Naval research today,
will yield ocean warfare superiority 15 to 20 years from now. With many
nations attempting to develop a blue water capability and project
force, I recognize, more than most that what is in the lab today will
have a profound affect on how we meet any future foreign contingencies.
Today, I want to emphasize the critical strategic value of basic
research to all of DOD and the importance of maintaining the
relationship between DOD, other Federal agencies, and the university
research community. These partnerships have resulted in enormous
benefit to all parties involved by significantly advancing the
frontiers of knowledge in the world's oceans and atmosphere. As you may
be aware, CORE currently manages the National Oceanographic Partnership
Office which welds together multiple public (12 agencies) and private
entities (academic and industrial) in ocean S&T under the law of
Congress passed in 1996. NOPP has demonstrated that working together,
the ocean community at all levels can get more out of combined efforts
than if they had acted as independent and autonomous players. The more
I see NOPP working, the more impressed I become at the depth and
commitment to collaboration across multiple agencies.
I want to personally commend the Subcommittee for its support of
basic research at DOD in the fiscal year 2001 appropriation bill.
Fiscal year 2001 was a milestone year for basic research. Last year the
civilian and defense accounts, when combined, resulted in a total basic
research portfolio that amounted to just over $20 billion. In the past,
it has been far too easy to sacrifice our long-term research needs to
meet short-term fiscal goals. I have to point out that in fiscal year
1993, the 6.1, 6.2 and 6.3 accounts at DOD were funded at a level of
$10 billion. Last year in fiscal year 2001, while gains were made in
these functions, we funded those same accounts at a level of $9.1
billion. In real terms, DOD research was hit hard in the decade
following the Cold War's end.
The support of this Subcommittee is critical to ensuring that we
maintain a viable S&T base to meet our future security needs on land,
in the air, and of course, on the sea. For fiscal year 2002, CORE urges
the subcommittee to fund DOD's S&T program at $10 billion in fiscal
year 2002. CORE hopes that in fiscal year 2002 we can bump research at
DOD to that level to ensure a robust defense science base.
This committee has given strong support to the defense S&T program
in the past. Today, in my limited time, I would like to share a few
examples from my personal experience of how central defense basic
research programs are to the long-term national security needs of our
country. I am going to use satellite programs as the example and I will
explain why it is relevant to the ocean sciences.
In the past, we had several agencies that ran meteorological
satellite programs that were independent of one another. The Department
of Commerce's (DoC) National Oceanic and Atmospheric Administration
(NOAA) and DOD, with technical support from the National Aeronautics
and Space Administration (NASA), used to run essentially separate
meteorological satellite programs and the exchange of information was
limited. That changed in 1994 with a Presidential Decision Directive.
This directive consolidated the Defense Meteorological Satellite
Program and the civil Polar-orbiting Operational Environmental
Satellite system into a single program. It required the establishment
of a joint agency group with representatives from DoC and DOD to
establish data needs of the parties involved and also required a 50-50
cost-sharing agreement.
As a result of the convergence of assets between DoC and DOD, we
avoided over $1.5 billion in duplicative costs. This program is known
today as the National Polar-Orbiting Operational Environmental
Satellite System (NPOESS). The program value is $6.5 billion and the
system contract award is due next year. It will result in 6 NPOESS
satellites being built to serve both civilian and military mission
requirements. It has already resulted in meshing data needs between
military and civilian agencies.
This is a remarkable development in the research world because it
marks a move towards integration and cross-fertilization of research
assets across a military-civilian threshold that no one had
contemplated, or even thought possible. DOD and NOAA have worked out
the data requirements and ground station logistics to serve both of
their operational mission requirements.
While weather forecasts are the primary purpose of the NPOESS
program, ocean measurements drove the design of three of the major
sensors onboard the spacecraft. As a result, we will now get improved
measures of sea surface temperatures, sea surface winds, ocean currents
and a host of other observations. These measurements are needed to
better understand the role of the oceans in climate, and will be useful
to military planners in their operational theaters. The integration of
resources and a collaborative approach has benefited both DOD and NOAA
and is based on the research portfolios of both organizations using
their collective research expertise to make it work.
Another solid example of this collaborative approach is the
National Oceanographic Partnership Program (NOPP). NOPP consists of the
Navy, NOAA, NASA, National Science Foundation, Environmental Protection
Agency, Minerals Management Service, United States Geological Survey,
Army Corps of Engineers, and the Department of Energy. NOPP is doing
for ocean researchers what NPOESS has done for the meteorological
satellite community. NOPP's innovative organizational approach both
within the federal government and within the national ocean community
was needed to promote interdisciplinary research, cooperatively operate
distributed observing systems, manage information from numerous
sources, and meet agency mission requirements. NOPP has exceeded
expectations and it is critical that the government fosters these
cooperative and reciprocal relationships to sustain such activities.
I believe that this multi-agency management of research assets
needs to become the operational norm for the federal government. The
satellite example and NOPP are just one of several programs that are
now beginning to drive a more integrated research approach that results
in more and better data at lower cost for all program participants.
However, it is clear to me that if this move toward research
integration is to occur on a national scale, there must be a long-term
commitment to funding the basic research that underpins this new
approach to the management of research assets. With an appropriate
policy framework that links agency commitments with the Administration
and Congress, programs like NPOESS and NOPP have given the federal
government ways to do a better job at lower cost. I believe that if we
commit the funding resources necessary, the nation will realize many
economic, environmental, and public health benefits as a result of this
new approach. These benefits cannot happen in the absence of adequately
funded research, including the Defense S&T Program.
I would be pleased to discuss this issue further at your
convenience. I appreciate the opportunity to appear before you and
would be happy to answer any questions you may have.

Senator Stevens. Our next witness, Dennis Achgill. Good
morning.

STATEMENT OF DENNIS ACHGILL, AMERICAN SOCIETY OF
MECHANICAL ENGINEERS INTERNATIONAL

Mr. Achgill. Good morning. Thank you, Mr. Chairman, Senator
Inouye. My name is Dennis Achgill. I appear before you today as
a representative of a committee of the American Society of
Mechanical Engineers (ASME), International, concerned with
Federal funding of research and development. ASME International
has 125,000 members, including 20,000 students. Mechanical
engineers are a major part of the Nation's technology base, a
base that is essential for the Nation's defense.
Out of all the engineering disciplines, mechanical
engineering claims the largest share of DOD engineering funding
at 23 percent. Therefore, we appreciate the opportunity to
appear before your subcommittee to present our views on the
importance of the science and technology accounts at the
Department of Defense.
The single most important message I would like to convey to
you today is, as a result of the declining support for defense-
related research and development for much of the past decade,
the defense industry has had great difficulty in attracting and
retaining the best of the best engineering and scientific
talents of this Nation. The defense industry now has a work
force whose average age has been increasing at an alarming
rate. That is why we are pleased with the efforts of your
subcommittee in reversing this declining support.
We sincerely believe that your continued support in
strengthening defense-related engineering sciences is essential
for meeting the future needs of the DOD. The valuable
contributions of our engineers and scientists have been a
constant and powerful force over the past four decades. These
contributions could not have been made without the vision and
support of members of Congress like yourselves, who promote the
continued strengthening of this Nation's investment in DOD
science and technology programs.
Defense agencies have historically been the largest source
of Federal funding for engineering research in our industry, as
well as at the Nation's universities. The universities are
significant collaborators with industry and are the source for
young engineering talent for the defense sector for both public
and private.
Funding for defense-related research and development peaked
at $9.8 billion in fiscal year 1993. The decline in support
subsequent to 1993, together with an accompanying pattern in
which advanced technology demonstration programs designed to
accelerate the insertion of research efforts would be stretched
out, delayed, and cancelled, resulted in the waste of valuable
resources, confusion, and deterrent to attracting a generation
of highly skilled, highly motivated engineers and scientists,
the folks who transform ideas into reality.
As research and development budgets were reduced, the job
market for engineers in the defense sector shrunk, leaving
little incentive for young engineers to seek defense-related
career opportunities. Continued unabated, the repercussions of
a declining defense investment in research will inevitably
extend to the commercial sector as well. Without question,
America's civilian aviation industry has benefited greatly from
the technological advancements in defense. The situation facing
the United States could be a technologically deficient military
together with a subpar civil aviation industry. Obviously,
neither scenario is in the best interests of the Nation.
We applaud the support that your subcommittee provided DOD
science and technology programs for the past 2 years. The
fiscal year 2001 budget for the 6.1, 6.2, and 6.3 accounts were
increased about 6 percent or $600 million from the previous
year, for a total of $9 billion.
We strongly urge your continued support for a balanced
portfolio of physical and life sciences accompanied by a
healthy increase in these accounts for fiscal year 2002 and
beyond. In 1998 the Defense Science Board recommended that the
research programs of the DOD should consistently be about 3.5
percent of the total defense budget. We believe this is a
worthy target, one that will result in an investment
approaching $11 billion in fiscal year 2002. This would also be
consistent with President Bush's commitment to increase the
defense R&D by $20 billion over the next 5 years. That is why I
urge the members of this subcommittee to continue their
support.
It will take a great deal of continued attention to defense
R&D to ensure that the best engineering and scientific minds
are once again willing to apply their talents to meeting the
future needs of this Nation.
Thank you for the opportunity to offer our views.
Senator Stevens. Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF DENNIS ACHGILL

Introduction
Thank you for the opportunity to appear before your Subcommittee to
present our views on the importance of the science and technology
accounts at the Department of Defense.
ASME has 125,000 members including 20,000 students. Mechanical
engineers are a major part of the nation's technology base that is
essential for the nation's defense. Out of all of the engineering
disciplines, mechanical engineering claims the largest share of DOD
engineering research funding, at 23 percent.
We applaud the support that your Subcommittee provided DOD Science
and Technology (S&T) programs for fiscal year 2001. The budget for the
basic 6.1, applied 6.2 and advanced technology development 6.3 accounts
were increased about six percent, for a total of $9 billion.
We are also pleased to see President Bush's proposed increase for
Research and Development (R&D) in DOD R&D in his ``Blueprint for New
Beginnings.'' According to the blueprint, the DOD budget for R&D in new
technologies would increase $2.6 billion in fiscal year 2002 ($20
billion over five years). However, we do not know how much of that
increase would go to the 6.1, 6.2 and 6.3 accounts, the extent to which
it may be dedicated for missile defense, or whether there will be
offsetting cuts in other DOD R&D programs.
Funding for S&T peaked at $9.8 billion in fiscal year 1993. The
budget for basic, applied, and advanced technology development programs
declined until fiscal year 2000 when the S&T accounts were increased to
$8.4 billion, and again in fiscal year 2001, when they were increased
to $9 billion. We strongly urge this Subcommittee to continue
strengthening the nation's investment in the DOD S&T programs.
Because program-level details in the fiscal year 2002 budget are
not yet available, it is too early to assess the full impact of the DOD
S&T budget request. The balance of our testimony will focus on the role
of research at DOD, the benefits derived from that research, and the
importance of increasing funding for fiscal year 2002.
Role of Research at the Department of Defense
Investment in DOD S&T programs produced the scientific and
engineering research underlying today's preeminent U.S. military
forces. As increasingly varied and unpredictable threats to America
develop in the coming years, this technological superiority will become
a national security imperative.
Over the past decade or so, an increasing number of peacekeeping
deployments to various parts of the globe, and steadily declining
budgets, have combined to put a severe strain on the ability of the
Department of Defense to appropriately plan for its future technology
needs through investments in basic and applied research. This situation
is extremely serious, one that could jeopardize the ability of the
United States to maintain air and ground superiority over potential
adversaries in the coming years.
The research of today, particularly the basic research of today,
largely determines the technological advancements of a decade or more
from now. For example, thermal imaging, the ability to see objects by
minute differences in the heat they emit, matured in the 1980's and now
makes it possible to see through smoke, fog, and dust at long ranges in
day or night. Civilian applications from Defense Basic Research in
thermal imaging enable us to monitor earth resources from space, detect
cancer, and gaze with greater clarity into space.
Similarly, no one foresaw the enormous range of applications and
whole industries that have evolved from the Defense-sponsored discovery
of lasers. Applications have included the billion-dollar fiber optic
industry, compact disk players, laser printers, procedures to attach
eye retinas, and new cancer surgeries.
Researchers are currently working on ``inverse'' scattering--an
attempt to find the shape of an unknown object given only data about
the ingoing waves and the echoes that reflect back from the object.
Detection of underground objects by microwave detection will soon be
realized. There are urgent practical applications of this research for
our military. The ability to detect and acquire significant information
about mines and buried bunkers on a battlefield could preserve American
lives in future battles. In a different direction, the development of
such technology would enable reconnaissance organizations to detect the
presence of underground bunkers where nuclear weapons are secretly
being made and stored.
Other examples of current research programs that are important for
our national security include:
Rotorcraft technologies.--Historically strong cooperative programs
between DOD and NASA produced the advanced technologies needed to
provide the advances in rotorcraft technology for the future military
applications. However, recent reductions in NASA's aeronautics R&D
budget have effectively terminated this cooperative effort. Rotorcraft
are crucial to national defense and we urge the Committee to work with
their colleagues to reestablish the continuation of this essential and
highly effective cooperative effort between DOD and NASA.
Aircraft Propulsion Technologies.--The Integrated High Performance
Turbine Engine Technology (IHPTET) program which is directed towards
developing versatile affordable advanced turbine engines, is a new
initiative within the Department's R&D activities. We urge the
Committee to sustain support for this technology development program in
order to ensure its availability for next generation of military
aircraft.

Consequences of Declining Investment in Research
The decline in defense-funded research and development that began
in 1993 and continued until recently, resulted in a serious disruption
in the cycle of highly skilled, highly motivated engineers and
scientists who have been the mainstay of the nation's defense
technology base. As research and development budgets were reduced,
irreplaceable research facilities and infrastructure were destroyed to
reduce corporate overhead costs.
The defense agencies have historically been the largest source of
federal funding for engineering research at the nation's universities.
The decline in support has led many engineering departments to seek
other sources of support, thereby threatening the important
contributions of the nation's universities to the U.S. defense
technology base.
Bachelors degrees in engineering awarded by America's universities
declined from a peak of 78,178 in 1986 to 63,635 in 2000. As defense
research and development budgets were reduced, the job market for
engineers in the defense industry shrunk, leaving little incentive for
young engineers to enter the defense industry. They have, instead, been
attracted to areas with exciting new challenges and where federal
investment in R&D has been strong--in areas such as bioengineering and
information technologies.
However, the repercussions of neglect in defense research will
inevitably extend in the future to the private sector as well. For
example, without question, America's civilian aviation industry has
benefited greatly from technological advancements in defense. In short,
the situation facing the United States in 2020 could be a
technologically deficient military that also results in a sub-par civil
aviation industry. Obviously, neither scenario is in the best interest
of the nation.

Recommendations
We applaud the subcommittee's efforts to reverse the decline in
funding for basic, applied and advanced research programs at the
Department of Defense. We strongly urge you to support a healthy
increase in the 6.1, 6.2 and 6.3 accounts for fiscal year 2002 and
beyond. In 1998, the Defense Science Board recommended that the
research programs of DOD should consistently be about 3.5 percent of
the total defense. We believe this is a worthy target, which would
result in an investment approaching $11 billion for fiscal year 2002.
It should also be noted that as DOD S&T declined in the 1990s, the
federal investment in research in engineering and the physical sciences
declined overall. Other federal agencies did not pick up the slack.
Although we support the rapid increase in federal investment in the
life science in recent years, neglect for funding of research in
engineering and the physical sciences should be of great concern to
members of this subcommittee. A balanced portfolio of research and
advances in engineering and the physical sciences is essential for
maintaining U.S. technological leadership in areas critical to defense.
Thank you for the opportunity to offer our views on the science and
technology budget request of the Department of Defense.
ASME International is a non-profit technical and educational
organization with 125,000 members worldwide. The Society's members work
in all sectors, including industry, education, and government. This
statement represents the views of the DOD Task Force, of the Inter-
Council Committee on Federal Research and Development, and is not
necessarily a position of ASME as a whole.

Senator Stevens. Mr. Harnage, National President, the
American Federation of Government Employees.

STATEMENT OF BOBBY L. HARNAGE, SR., NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT
EMPLOYEES, AFL-CIO

Mr. Harnage. How are you doing, Mr. Chairman. Mr. Chairman,
thank you for the opportunity to speak before the Senate
Defense Appropriations Subcommittee. My name is Bobby Harnage,
Senior, and I am National President of the American Federation
of Government (AFG) Employees, representing some 600,000
Federal and D.C. government employees. I will discuss today
three of our service contracting concerns expressed in our
written testimony: the need to track the cost of contracting,
the need for real public-private competition for our work and
new work before it is given to contractors, and the need to use
public-private competition to hold contractors accountable to
the same extent that civilian employees are.
I will leave the relevant experts from recent Inspector
General (IG) and General Accounting Office (GAO) reports to my
written statement. However, I will note that GAO has reported
that, despite spending almost $100 billion last year alone on
contractors, DOD still has ``not developed a proposal to revise
and improve the accuracy of the reporting of contract service
costs. DOD officials stated that the momentum to develop a
proposal to improve the reporting of contract service costs had
subsided. Without improving this situation, DOD's reports on
the cost of contract services would still be inaccurate and
likely understate what DOD is paying for certain types of
services.''
For DOD, giving work to contractors is still more important
than ensuring that work is done right. That is not just bad for
civilian employees, that is bad for war-fighters and taxpayers
as well. The Army deserves recognition and encouragement for
its recent establishment of an inventory to track the cost and
size of its contractor work force. I ask that the subcommittee
require that other parts of DOD use the Army's system in
establishing their own inventories.
Requiring public and private competition. Despite the fact
that A-76 is still a money-loser overall and after all these
years, fair and full public-private competitions for genuinely
commercial activities performed by contractors as well as
civilian employees have the potential to save money for the
taxpayers. However, because public-private competition is
merely an option for DOD, there are no incentives for DOD to
take it seriously.
Given the problems within A-76 and the service contracting
generally, you may be surprised, Mr. Chairman, that I do not
come before you and demand an end to all servicing contracting
forever and ever. I am actually coming to you with a much
different request: require DOD to give Federal employees
opportunities to compete in defense of their own jobs as well
as new work. The number of civilian employees has fallen by
almost 300,000. Spending on service contracting has rocketed
ever upward, but less than one percent of service contracts in
1999 were undertaken after an A-76 review.
That is, DOD has dramatically increased service contracting
and reduced its own civilian employee work force while almost
never using public-private competition. According to the IG,
there is often little competition among contractors for work.
If GAO reports that savings are possible from individual A-76
competitions and if DOD insists that savings are generated
through A-76 competitions generally, whether the work stays in
house or is contracted out, then civilian employees should be
allowed to compete for more work, both their own work as well
as new work.
That is why the subcommittee should establish a requirement
that DOD consider in-house performance before giving any work
to contractors.
Our third concern is contracted-in. Mr. Chairman, AFG has
long believed that if savings were possible by competing the
jobs of Federal employees, then they were possible by competing
the jobs of contractors as well. As you know, A-76 provides for
in-sourcing as well as out-sourcing. The same rules and the
same rationale apply.
At a time when the Pentagon is supposedly championing
public-private competition, less than 3 percent of all A-76
studies performed by DOD were directed at work performed by
contractors. In other words, public-private competition is
being used to replace civilian employees.
DOD should be required----
Senator Stevens. I am sorry, I have to stop you there. They
tell me I have to vote.
Mr. Harnage. Thank you very much for this opportunity.
Senator Stevens. I am sorry to do this to you.
[The statement follows:]

PREPARED STATEMENT OF BOBBY L. HARNAGE, SR.

My name is Bobby L. Harnage, Sr., and I am National President of
the American Federation of Government Employees. On behalf of the
American Federation of Government Employees, AFL-CIO, which represents
more than 600,000 federal employees, including 200,000 in the
Department of Defense (DOD), who serve the American people around the
world and across the nation. Mr. Chairman, I thank you for this
opportunity to speak before the Senate Defense Appropriations
Subcommittee.

Problem #1: DOD is spending more and more on service contracting for
less and less.
In fact, we don't even know how much DOD is spending on service
contracting, let alone if those hundreds of billions of taxpayer
dollars are being spent wisely. We do know that the cost to taxpayers
of service contracting has increased drastically. Over the last eight
years, Pentagon officials have systematically replaced federal
employees with contractors, often regardless of whether or not it makes
any sense. According to the Office of Personnel Management, the DOD
civilian workforce fell from 966,000 to 682,000 in 2000. (Chart 1)
Service contracting, on the other hand, increased from $39.9 billion in
1992 to $51.8 billion in 1999, according to the Inspector General (IG).
(Chart 2)

[Chart 1]

[Chart 2]

It's clear that the emphasis in DOD's service contracting crusade
has been giving the jobs of federal employees to contractors, not in
making sure that work has been well done.

``. . . DOD managers and contracting personnel were not
putting sufficient priority during the 1990's on (service
contracting), which likewise was virtually ignored for the
first few years of recent acquisition reform efforts.
Consequently, we think the risk of waste in this area is higher
than commonly realized . . . We reviewed 105 Army, Navy, and
Air Force contracting actions, valued at $6.7 billion, for a
wide range of professional, administrative, and management
support services amounting to about 104 million labor hours, or
50,230 staff years. We were startled by the audit results,
because we found problems with every one of the 105 actions. In
nearly 10 years of managing the audit office of the IG, DOD, I
do not ever recall finding problems on every item . . .''

Robert J. Lieberman, Assistant Inspector General
for Audits, Department of Defense;
``Federal Acquisition: Why Are Billions of
Dollars Being Wasted?'' (testimony before
the House Subcommittee on Government
Management, Information, and Technology);
March 16, 2000.

One of the principal architects of DOD's massive transfer of work
from federal employees to the private sector was sheepish when asked
during a Senate Readiness Subcommittee hearing last year about the IG's
damning report:

``. . . I agree with (the IG about) needing significant
improvements in service contracting . . . (T)his has become a
major challenge for us . . . (W)e have to really significantly
improve our service buying . . . (I)t's probably going to take
us a few years . . . to shift towards really professional
service buying.''

Jacques Gansler, Under Secretary for Acquisition &
Technology, Department of Defense; ``A
Hearing on Acquisition Reform'' (testimony
before the Senate Subcommittee on
Readiness); April 26, 2000.

The General Accounting Office (GAO) has weighed in as well, both
with respect to service contracting undertaken pursuant to OMB Circular
A-76 and service contracting generally.

``Efforts to improve the accuracy of data on savings from A-
76 (public-private competition) studies at the time the studies
are completed are warranted, as are efforts to assess savings
over time. Both are key to establishing more reliable savings
estimates and improving the credibility of the A-76 program
amidst continuing questions in Congress and elsewhere.''

General Accounting Office, DOD Competitive Sourcing
(NSIAD 01-20), December 2000.

In an earlier report on A-76, GAO had noted that entries in the
Commercial Activities Management Information System (CAMIS), the system
that is supposed to be used to monitor contracts undertaken pursuant to
the circular,

``are not modified and are being used continuously without
updating the data to reflect changes in or even termination of
contracts. DOD officials have noted that they could not
determine from the CAMIS data if savings were actually being
realized from A-76 competitions. Our work continues to show
important limitations in CAMIS data . . . During our review, we
found that CAMIS did not always record completed competitions
and sometimes incorrectly indicated that competitions were
completed where they had not yet begun or were still underway.
We also identified where savings data recorded for completed
competitions were incorrect based on other data provided by the
applicable service.''

General Accounting Office, DOD Competitive
Sourcing: Results of Recent Competitions
(NSIAD-99-44), March 2000.

According to a recent GAO report, DOD has chosen not to keep its
commitment to the Congress to improve its system for reporting the
costs of contract services.

``The Department of Defense (DOD) spends tens of billions
annually on contract services--ranging from services for
repairing and maintaining equipment; to services for medical
care; to advisory and assistance services such as providing
management and technical support, performing studies, and
providing technical assistance. In fiscal year 1999, DOD
reportedly spent $96.5 billion for contract services--more than
it spent on supplies and equipment. Nevertheless there have
been longstanding concerns regarding the accuracy and
reliability of DOD's reporting on the costs related to contract
services--particularly that expenditures were being improperly
justified and classified and accounting systems used to track
expenditures were inadequate . . .
``. . . DOD has not developed a proposal to revise and
improve the accuracy of the reporting of contract service
costs. DOD officials told us that various internal options were
under consideration; however, these officials did not provide
any details on these options. DOD officials stated that the
momentum to develop a proposal to improve the reporting of
contract services costs had subsided. Without improving this
situation, DOD's report on the costs of contract services will
still be inaccurate and likely understate what DOD is paying
for certain types of services.''

General Accounting Office, CONTRACT MANAGEMENT: No
DOD Proposal to Improve Contract Service
Costs Reporting (01-295), February 2001.

DOD's failure to track the billions and billions of dollars in
increased service contracting has of course resulted in giving
taxpayers the business, so to speak. However, it's also shafted DOD's
civilian employees, the working and middle-class Americans who helped
the nation win the Cold War and become the world's preeminent power.
They are nearly 300,000 fewer, many of them having been replaced by
contractors over the last eight years. And, adding insult to injury,
DOD can't even begin to make the case that this wholesale transfer of
work to the private sector was actually done in the name of efficiency.

Solution #1: Require that the rest of DOD use the methodology developed
by the Army to track the size and cost of its massive
contractor workforce.
One part of DOD is striving to deal with this longstanding problem
and deserves our praise and encouragement: the Army. As the result of a
recently issued rule, the Army has established an inventory to track
the growth in the cost and size of the service's contractor workforce
in a comprehensive, reliable, and contractor-friendly fashion.

``(The Army's new contractor inventory will) provide
unprecedented departmental level visibility of the missions
supported and functions performed by contractors'' and will
allow the Army to ``assess whether, and to what extent,
contractors may be performing (inherently governmental)
functions, or commercial functions, which, when contracted out
beyond a certain level of reliance, increase operational risks
to overall Army mission capabilities and readiness . . . The
capabilities provided by service contractors consume at least
one third of the Department's obligation authority; and yet,
due to lack of reliable data, senior Army planners lack the
ability to assess the total manpower capabilities within a
function and major Army organizations that may rely heavily on
contract support. The data collected under this reporting
requirement will remedy these defects . . .''

Department of the Army; Final Rule on ``Report on
Use of Employees of Non-Federal Entities to
Provide Services''; Federal Register; 32
CFR 668, December 26, 2000.

The GAO has already endorsed the approach taken by the Army:

``Data on the full range of agencies' activities, whether
performed by federal personnel, or contract, could inform
managers and other decision makers about how they are
performing their mission and mission support activities, and
how they have currently allocated their resources.'' (Emphasis
added)

General Accounting Office, Competitive Contracting
(NSIAD-00-244), September 2000.

The former president of the Professional Services Council, a
contractors' special interest group, told the Bureau of National
Affairs' Federal Contracts Report, on March 21, 2000, that the rule
``should not be harmful in light of the fact that (compliance) is not
coupled with receiving payment.''
Meticulous statistics are kept about federal employees, their
numbers, their salaries, their work. Virtually nothing, however, is
known about the federal government's four million-strong contractor
workforce. The work of federal employees is transparent as a result of
the budget process, the appropriations process, the Federal Activities
Inventory Reform Act, and the Government Performance and Results Act.
The Army's contractor inventory will finally ensure the beginning of
that same transparency with respect to the service's contractor
workforce.

Problem #2: Too much work is contracted out without public-private
competition.
Pentagon officials have made a lot of claims about savings from the
use of OMB Circular A-76 that they have been unable to substantiate. In
fact, A-76, after all of these years, is still a money-loser. According
to GAO's DOD Competitive Sourcing: Some Progress, but Continuing
Challenges Remain in Meeting Program Goals (NSIAD-00-106) report from
last year,

``While our work has shown that savings are being realized
from individual A-76 studies, overall program costs to date are
still exceeding savings. The President's fiscal year 2001
budget submission reports that during fiscal year 1998 and
1999, the overall costs of the A-76 program have exceeded the
expected savings.''

Despite A-76's record, fair and full public-private competitions
for genuinely commercial activities performed by contractors as well as
federal employees have the potential to save money for the taxpayers.
However, because public-private competition is merely an option for
Pentagon officials--A-76, already riddled with waivers, loopholes, and
exceptions, is a circular and does not have the force of law--there are
no incentives for DOD to take it seriously.
Indeed, because federal employees win too many of the competitions
for the contractors' liking (60 percent), the competitions take too
long, the competitions cost too much, and the predicted savings don't
materialize, DOD has, in some instances, abandoned what should be a
bedrock principle of public-private competition in favor of a nebulous
and increasingly worrisome concept known as ``strategic sourcing,''
while keeping the arbitrary civilian personnel quotas.
Although Bush Administration officials are talking about competing
at least 425,000 federal employee jobs, it won't be long until they
discover that A-76 savings are usually illusory, based in legends
rather than in ledgers, and hear the same old complaints from the
private sector that contractors aren't winning often enough and they
aren't taking our jobs fast enough. Thus, it likely won't be long until
the Bush Administration follows the Clinton Administration's example of
retaining arbitrary civilian personnel quotas but moving away from
public-private competitions in favor of strategic sourcing, i.e.,
direct conversions to contractor performance as well as downsizing
civilian employees and then replacing them with federal employees.

Solution #2: Require that work performed by civilian employees as well
as new work be subjected to public-private competition before
it is given to contractors.
Given the severe problems with A-76 and service contracting
generally, you may be surprised Mr. Chairman, that I don't come before
you and demand an end to all service contracting, forever and ever. I'm
actually coming to you with a much different request: require DOD to
give federal employees opportunities to compete in defense of their own
jobs as well as for new work.
As you may know, Mr. Chairman, in DOD, almost all work is given to
contractors without any public-private competition. (Please see Chart
3.)

[Chart 3]

``(C)ontracts resulting from a cost comparison performed in
accordance with OMB Circular A-76 represent an extremely small
portion of the total number of service contracts awarded by the
Department during fiscal year 1999 (less than 1 percent).
Further, these contracts represent a very small portion of the
total dollars awarded by DOD to private sector contractors
during fiscal year 1999.''

Jacques Gansler, Under Secretary for Acquisition &
Technology, Department of Defense; Senate
Report 106-53; December 26, 2000.

``From fiscal year 1992 through fiscal year 1999, DOD
procurement of services increased from $39.9 billion to $51.8
billion annually. The largest subcategory of contracts for
services was for professional, administrative, and management
support services, valued at $10 billion. Spending in this
subcategory increased by 54 percent between 1992 and 1999.''

Robert J. Lieberman, Assistant Inspector General,
Department of Defense; ``Federal
Acquisition: Why Are Billions of Dollars
Being Wasted?'' (testimony before the House
Subcommittee on Government Management,
Information, and Technology); March 16,
2000.

That is, DOD has dramatically increased service contracting and
reduced its civilian employee workforce--while almost never using
public-private competition. In fact, there is often little competition
among contractors for work. The IG reported that in excess of three-
fifths of the contracts he and his staff surveyed suffered from
``inadequate competition.'' Regardless of the level of private-private
competition, 77 percent of the surveyed contracts had ``inadequate cost
estimates'' that ``clearly left the government vulnerable--and
sometimes at the mercy of the contractor to define the cost.''
DOD managers need not be at the mercy of sole-source contractors,
however. If GAO reports that savings are possible from individual A-76
competitions and if DOD insists that savings are generated through A-76
competitions generally whether the work stays in-house or is contracted
out, then federal employees should be competing for more work, both
their own as well as new work.
If DOD were being run in the interests of warfighters and
taxpayers, Pentagon officials would be actively considering in-house
performance of work. Would a firm in the private sector--a big defense
contractor, let's say--automatically contract out almost all new work,
as DOD does today? Of course not.
It's a homely metaphor but today, in the federal services
marketplace, there are two shops, a civilian employee shop and a
contractor shop. However, Pentagon officials have instructed managers
never to use the civilian employee shop--no matter how much more
effective we are, no matter how much more efficient we are, and no
matter how much more reliable we are.
That's why the Subcommittee should establish a requirement that DOD
consider in-house performance before giving work to contractors. For
those public-private competitions we win, warfighters and taxpayers
will be well-served. As for those competitions we lose, we'll learn
from our mistakes and strive to prevail the next time similar work is
competed.
Institutionalizing the public-private competition process will also
help to address some of the problems with A-76 I identified earlier.
For example, if DOD understands that public-private competition is not
an optional extra, they will have incentives to better administer their
contracts and to develop the capacity to expeditiously and economically
conduct public-private competitions.
Another example is in-house personnel ceilings. Work that either
should be performed by civilian employees because of its inherently
governmental nature or could be more efficiently performed by civilian
employees is contracted out in order to stay under onerous personnel
ceilings. A public-private competition requirement, however, eliminates
any incentive to discriminate against the civilian workforce because
DOD would have to consider in-house performance. Pentagon officials
would have to shift from downsizing the civilian workforce in favor of
rightsizing the civilian workforce.

Problem #4: Work performed by civilian employees is being directly
converted to performance by ``Native American'' contractors
without any public-private competition.
A loophole included in a general provision in the defense
appropriations bill allows for work performed by federal employees to
be directly converted to contractor performance if the contractor
happens to be ``under 51 percent ownership by an Indian tribe.'' In the
last two years, this loophole has been used twice by the Air Force to
deprive 600 public works civilian employees of their jobs at MacDill
Air Force Base, FL, and Kirtland AFB, NM. The National Imagery and
Mapping Agency (NIMA) is now poised to use the direct conversion
process against 600 civilian employees at installations in the St.
Louis, MO, and Washington, DC, areas.
I am proud that AFGE is as diverse as the federal workforce. This
union obviously bears no animus towards Native Americans. Moreover, we
do not oppose the use of 8a set-aside contracts that benefit, among
others, Native Americans. However, this direct conversion process is
fundamentally different from 8a set-aside contracts. It must also be
noted that the civilian employees who lose their jobs as a result of
these direct conversions--who, incidentally, are in many cases members
of minority groups themselves--are not being replaced by Native
Americans.
As DOD's own Guidance for Strategic and Competitive Sourcing
Programs points out, the use of a direct conversion is not required to
be substituted in favor of a real public-private competition; in fact,
the guidance indicates that even when using a direct conversion, the
process can be modified to allow federal employees to compete in
defense of their jobs as an MEO. However, after beginning and then
abandoning an A-76 competition, as in the cases of MacDill and
Kirtland, NIMA management is on the brink of executing a massive direct
conversion--without even allowing agency employees to compete in
defense of their jobs as an MEO.
Of course, it must be noted that direct conversions, whether to
Native American tribes or traditional defense contractors, are unfair
to federal employees who are denied opportunities to compete in defense
of their jobs and poorly serve taxpayers.

Solution #4: Oppose the pending NIMA direct conversion and repeal the
``Native American'' direct conversion mechanism.
AFGE appreciates the bipartisan and bicameral group of lawmakers,
including Senators Richard Durbin (D-IL) and Jean Carnahan (D-MO), who
signed a letter of opposition to NIMA's direct conversion effort and
asked Secretary of Defense Donald Rumsfeld to prevent the loophole from
being used indiscriminately.

Problem #5: DOD has failed to look for savings from its massive and
still ever-growing contractor workforce.
Mr. Chairman, AFGE has long believed that if savings were possible
from competing the jobs of federal employees, then they were possible
from competing the jobs of contractors as well. As you know, A-76
provides for insourcing as well as outsourcing.
The Clinton Administration agreed with us--or so we believed. A
senior OMB official even committed to ensure that agencies, including
DOD, undertook more contracting in. In a February 2, 1999, letter to
me, Acting Deputy Director for Management G. Edward DeSeve wrote,

``I also agree with you that we should ask federal managers
to `take pause' and consider the potential benefits of
converting work from contract to in-house performance. As I
indicated at our October meeting, OMB will encourage agencies
to identify opportunities for the conversion of work from
contract to in-house performance . . .''

No such guidance was ever offered. We were not deterred, however.
Thanks to Senators Richard Durbin (D-IL) and Tom Harkin (D-IA) of this
subcommittee, we secured the enactment of this report requirement:

``The Secretary of Defense shall submit a report to . . .
identify those instances in which work performed by a
contractor has been converted to performance by civilian or
military employees of the Department of Defense . . . In
addition, the report shall include recommendations for
maximizing the possibility of effective public-private
competition for work that has been contracted out.''

U.S. Congress, Fiscal Year 2000 Defense
Appropriations Act, Section 8109.

The resulting report on DOD's contracting in activities--or, more
precisely, the lack of contracting in activities--was hardly a
surprise. DOD's compliance--or, more precisely, DOD's complete failure
to comply--with the second requirement to develop a contracting in
policy did cause me some surprise.

``Eight of the 286 (OMB Circular A-76 public-private
competition) studies (completed during the previous five years)
involved work which was being performed by the private
sector.'' (Note: Federal employees won five out of the eight
studies.) ``In responding to the Section 8109 requirement to
present recommendations for maximizing the possibility of
effective public-private competition for work that has been
contracted out, the Department reiterated existing policy
guidance on the subject.''

General Accounting Office, DOD Competitive Sourcing
(01-20), December 2000.

At a time when the Pentagon is supposedly championing public-
private competition, less than 3 percent of all A-76 studies performed
by DOD were directed at work performed by contractors. (Please see
Chart 4.) In other words, public-private competition is being used to
replace federal employees with contractors, instead of to make DOD as a
whole more efficient. Moreover, after being directed to come up with a
plan for increasing its contracting in, the Pentagon thumbed it's
collective nose at the Congress.

[Chart 4]

Solution #5: Require DOD to subject work performed by contractors to
the same degree of public-private competition as that
experienced by federal employees, starting with those
categories of work that have been competed under A-76 over the
last several years.
With respect to contracting in, it's illustrative to look at local
government, using survey data collected by the International City/
County Management Association.

``Our data show significant incidence of reverse
privatization or contracting back in previously privatized
services . . . From 1992-1997, 88 percent of governments had
contracted back in at least one service and 65 percent had
contracted back in more than three services. On average across
all places, 5 services were contracted back in from 1992 to
1997.''

Mildred Warner and Amir Hefetz, Privatization and
the Market Structuring Role of Local
Government, Cornell University Department
of City and Regional Planning Working Paper
#197, December 2000.''

Why so much contracting in? The authors explain:

``Contracting back in reflects problems with the contracting
process itself, concerns over limited efficiency gains and
maintenance of service quality . . . Analysis of cases of
contracting back in shows that it is motivated by desire to
maintain service quality and local control and to ensure cost
savings in the face of changing markets.''

Let's revisit the scene at DOD: The A-76 process is--at least at
present--a money-loser. Contract administration is virtually
nonexistent. Sole-source contractors have the department at their
mercy. To engage in a bit of understatement, it's safe to write that
conditions are ripe in DOD for the same sort of corrective contracting
in that's occurring in local government.
What is the explanation as to why there is so much contracting in
at the local level and so little at DOD, especially given the strong
likelihood that there is much less private-private competition for
DOD's work because of the much greater complexity of the work required
and contract administration problems are so much more severe?
Here's the most likely explanation:

`Ideology does not dominate local service delivery decisions;
rather, pragmatic local government demonstrate the continued
importance of public investment, innovation and direct
involvement in service delivery.''

In other words, local officials want to do what's right for their
communities. Can the same good intentions be attributed to those who
have run DOD in recent years? I'll leave that for others to answer
definitively. However, it is clear that DOD officials have approached
contracting out and contracting in with certain prejudices.
Mr. Chairman, thank you for this opportunity to address the
subcommittee. I would be happy to answer any questions.

Senator Stevens. Mr. Peccei, you will be next.
Senator Inouye [presiding]. The chair now recognizes Mr.
Roberto Peccei, Vice Chancellor for Research at UCLA.

STATEMENT OF ROBERTO PECCEI, Ph.D., VICE CHANCELLOR FOR
RESEARCH, UCLA, ON BEHALF OF ASSOCIATION OF
AMERICAN UNIVERSITIES

Dr. Peccei. Thank you very much, Mr. Chairman. Thank you
for the opportunity to testify today. My name is Roberto Peccei
and I am the Vice Chancellor for Research at University of
California, Los Angeles (UCLA). My remarks today are submitted
on behalf of the American Association of Universities, the
National Association of State Universities and Land Grant
Colleges, and the American Council on Education. These three
associations include universities and colleges in every State
that performs science and technology research that is funded by
the Department of Defense.
I want to thank this subcommittee and you, Mr. Inouye, for
the support you have shown for science and technology research
programs in the Department of Defense. As you know,
universities play the largest role in basic defense research,
receiving more than 60 percent of the funding in program
element 6.1. They also receive substantial funding for applied
research and advanced technology development, program elements
6.2 and 6.3 respectively.
Many crucial defense technologies have emerged from
fundamental research conducted on university campuses. Among
these are radar, digital computers, lasers, the global
positioning system, and computer networking. Indeed, ARPANet,
the forerunner of the Internet, got its start at UCLA in 1969,
more than 30 years ago.
With future threats to the national security so uncertain,
maintaining technological superiority will require a strong,
continuing research effort. DOD-sponsored university research
is an important source of new knowledge and innovative
solutions, ensuring preparedness. Indeed, incremental
adaptation of existing weapons and equipment are not
necessarily suitable in this new world situation.
For example, rapidly developing computer-based information
technologies, coupled with advanced sensors, promise to
revolutionize warfare. Research that now is being conducted on
university campuses into new virtual reality and computer
visualization technologies will permit future U.S. forces to
dominate the situation with superior information and
communications.
Supporting university research benefits DOD in many ways.
It produces important advances in knowledge, it helps top
scientists and engineers to remain involved in defense
research. Not least, it produces a student who gets hands-on
research training and eventually becomes the highly qualified
scientists and engineers of the future who go on to work in
academia and industry and in Federal laboratories.
For all these reasons, we hope that this subcommittee will
continue the progress that has been made in the past few years
to provide increased support for these programs, which make
such an important contribution to national security. In fiscal
year 2002, we hope the subcommittee will provide a combined
total of $10 billion for science and technology programs under
elements 6.1, 6.2, and 6.3. This will represent an increase of
$900 million or approximately 10 percent over the fiscal year
2001 appropriation.
Thank you for permitting me to testify today. It will be a
pleasure to welcome you or members of your staff to the UCLA
campus so that you can see first-hand the exciting research
being done with the support of the Department of Defense and
this subcommittee.
Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF ROBERTO PECCEI, PH.D.

Mr. Chairman and members of the subcommittee: Thank you for the
opportunity to testify today. My name is Roberto Peccei, and I am the
Vice Chancellor for Research at UCLA. My remarks today are submitted on
behalf of the Association of American Universities (AAU), which
includes 63 of North America's most prominent research universities.
This testimony is also submitted on behalf of the National Association
of State Universities and Land-Grant Colleges (NASULGC) and the
American Council on Education (ACE). These three associations include
universities and colleges in every state that perform the science and
technology research that is funded by the Department of Defense.
I want to thank this subcommittee and you, Mr. Chairman, for the
support that you have shown for science and technology research
programs in the Department of Defense. As you know, Basic and Applied
Research are funded under program elements 6.1 and 6.2 in the Research,
Development, Testing and Evaluation section of the Department of
Defense appropriation. The Army, Navy, Air Force and the ``Defense-
wide'' account under the Office of the Secretary all receive separate
appropriations for these programs. Universities play the largest role
in basic defense research, receiving more than 60 percent of this
funding (program element 6.1). They also receive substantial funding
for applied defense research and advanced technology development
(program elements 6.2 and 6.3, respectively).
Many crucial defense technologies have emerged from fundamental
research conducted on university campuses. Among these are: radar,
nuclear power, digital computers, semiconductor electronics, lasers,
fiber optics, night vision, vaccines and drugs for malaria and other
tropical diseases, inertial guidance, the Global Positioning System,
stealth and other advanced materials, computer networking (ARPANet,
forerunner of the Internet in fact got its start at UCLA more than 30
years ago), and computer-based visualization systems for training and
for planning and conducting operations.
With future threats to national security so uncertain, maintaining
technological superiority will require a strong continuing research
effort. The armed forces today not only must be ready to fight in
conventional regional wars like the Gulf War; they also must be ready
to undertake peacekeeping missions in hostile situations and to defend
against unconventional threats such as terrorism, biological and
chemical agents, and computer sabotage.
DOD-sponsored university research is an important source of new
knowledge and innovative solutions to these problems. Incremental
adaptations of existing weapons and equipment are not necessarily
suitable in the new world situation. University researchers are
investigating new approaches to assist likely future missions--for
example, small, highly mobile units operating in ambiguous situations
far from their bases.
Rapidly developing computer-based information technologies, coupled
with advanced sensors, promise to revolutionize warfare. University
scientists and engineers are working to exploit the information
revolution faster and better than the rest of the world. Research now
being conducted on campus into new visual reality and computer
visualization technologies will permit future U.S. forces to dominate
the situation with superior information and communications.
Supporting university research benefits DOD in many ways. It
produces important advances in knowledge. It helps keep top scientists
and engineers involved in defense research. Not least, the students who
get hands-on research training become the highly qualified scientists
and engineers of the future who go on to work in academia, industry,
and federal laboratories.
For all these reasons, we hope this subcommittee will continue the
progress that has been made in the past few years to provide increased
support for these programs which make such an important contribution to
national security. In fiscal year 2002, we hope the subcommittee will
provide a combined total of $10 billion for science and technology
programs (6.1, 6.2 and 6.3) in the Office of the Secretary, Army, Navy
and Air Force. This would represent an increase of $900 million (or 10
percent) over the fiscal year 2001 appropriation.
Thank you for permitting me to testify today. It would be a
pleasure to welcome you or your staff to the UCLA campus so that you
can see first-hand the exciting research being done with the support of
the Department of Defense and this subcommittee.

Senator Inouye. Thank you very much, Dr. Peccei. How many
universities are involved in DOD research?
Dr. Peccei. Well, the Association of American Universities
(AAU) has 63 members. The National Association of State
Universities and Land-Grant Colleges (NASULGC) has close to 200
members. Three hundred is the total number. They are in every
State of the Union. What is particularly nice is that they
involve a tremendous number of young students, both
undergraduate and graduate students. Really, they help train
the future generations.
Senator Inouye. Thank you very much, Dr. Peccei.
Dr. Peccei. Thank you.
Senator Inouye. Now may I call upon Lieutenant Colonel
Kevin Reagan, Ovarian Cancer National Alliance.
[No response.]
Senator Inouye. Then may I call upon Mr. Robert V. Morris,
Executive Director, Fort Des Moines Memorial Park and Education
Center.

STATEMENT OF ROBERT V. MORRIS, EXECUTIVE DIRECTOR, FORT
DES MOINES MEMORIAL PARK AND EDUCATION
CENTER

Mr. Morris. Greetings, Senator Inouye. As you are aware,
Fort Des Moines is a military installation with a great deal of
distinction. It was the site of the first officer candidate
school opened to African Americans in 1917 and the creation of
the Women's Army Corps in 1942, including the first officer
candidate school opened to females there as well. President
Ronald Reagan received his commission there in 1937 and our
former board member and currently Secretary of State General
Powell is one who also believes that had it not been for the
success of that 1917 officers candidate school it would have
retarded the process of black officer development for 25 years
and had an impact on the careers of officers like himself.
As you are aware, sir, we have received prior
appropriations through the Army, the Corps of Engineers, which
have done rehabilitation on the 20,000 square foot museum
building there at the 4-acre park. Unfortunately, due to the
rigid standards of rehabilitation by the Secretary of
Interior's office, those funds literally are going to get us a
shell, a building shell there, without much work being done
internally.
The building has been closed since the Vietnam War where
the museum is going and it took a great deal of work to bring
it up. We are asking for a final appropriation to complete this
project. In addition to the $12 million construction and
development budget for the park, of which we have raised $3
million, we are also raising an $8 million endowment fund for
the perpetual operations and maintenance of the park as well.
So the project is large. That is basically what we are
asking for at this time.
[The statement follows:]

PREPARED STATEMENT OF ROBERT V. MORRIS

No military installation has played as great a role in the racial
and gender integration of America's Armed Forces as Fort Des Moines,
Iowa, a National Historic Site.
As you are aware, Fort Des Moines hosted the first U.S. Army
Officer Candidate School open to African-Americans in 1917 during the
First World War. The 639 graduate officers led the 92nd Division
against Imperial Germany in WWI France in 1918 and fathered today's
racially integrated officer corps.
In 1942, during the Second World War, Fort Des Moines hosted the
first U.S. Army training facility open to women. The Womens Army
Auxiliary Corps (WAAC), later renamed the Womens Army Corps (WAC),
trained 72,000 female troops for non-combat duty between 1942-1945. In
addition, the Army's first Officer Candidate School open to women
graduated 436 female officers, including 39 black women, on 29 August
1942. WAAC/WAC service released 250,000 men for combat duty in Europe
and the South Pacific.
Congress has previously appropriated $4 million which the Army has
used for structure stabilization of the 20,000 square foot museum and
5,000 square foot Chapel buildings under the strict guidelines of the
Secretary of Interior's ``Standards of Rehabilitation.'' Unfortunately,
the hazardous work and standard conformity have exhausted the prior
funds and left internal building and landscape development incomplete.
These funds must be appropriated as a grant through the Defense
Department due to their limitations on new construction projects.
Although we have raised nearly $3 million in local public and
private funds toward the $12 million project, this final $5 million
appropriation will finish the park for all of America to see and learn
from. With your help, the Fort Des Moines Memorial Park will become
America's largest testament as to how the military led greater society
towards racial and gender equality at two critical turning points in
history.

Senator Inouye. Thank you very much. Is the 92nd Division
still associated with this?
Mr. Morris. The 92nd Division to my knowledge is not active
at this time. I think after World War II it became a inactive
division, because it was a segregated division up through World
War II.
Senator Inouye. I was attached to it.
Mr. Morris. Oh, really? My grandfather, as I believe you
are aware, was one of the initial officer candidates and served
with the 92nd in France and was wounded at the Battle of Metz.
So I have a personal interest in this project and have been the
leader of the project over the years.
Senator Inouye. I will look into it, sir.
Mr. Morris. Thank you. I appreciate it.
Senator Inouye. Thank you.
May I now call upon Dr. James Herriot, Vice President, Bios
Group. Dr. Herriot.

STATEMENT OF JAMES W. HERRIOT, Ph.D., VICE PRESIDENT,
BIOS GROUP, INCORPORATED

Dr. Herriot. In deference to the committee's short time
this morning, I am going to read an abbreviated statement. You
have a copy of the full statement for the record.
Senator Inouye. It will be made part of the record, sir.
Dr. Herriot. Mr. Chairman and members of the Defense
Appropriations Subcommittee, Senator Inouye: A powerful new
science is emerging which is changing the way that we operate
our military, formulate our strategies, manage our logistics,
and defend our Nation. This is the science of complexity.
A few hundred years ago, scientists told us where
cannonballs would land. Now this new science of complexity is
telling us where organizations will land or, more precisely,
about the dynamics of large, complex organizations composed of
millions of individual interacting parts. Like millions of
ricochetting, colliding billiard balls, these parts may be
biomolecules of a living cell, they may be drug runners and
Coast Guard ships. They may even be fragments of intelligence
data which, if pieced together swiftly enough, can help
analysts foretell of a terrorist attack or an international
financial crisis.
The important news is that complexity science has matured
and turned the corner from pure science to real, valuable
applications. What is complexity science? Let me give you an
analogy to help here. Hundreds of years ago, the Masons built
the cathedrals of Europe with an exquisitely fine-tuned body of
intuitive rules for constructing these stone masterpieces.
Nevertheless, occasionally the cathedrals fell down, and no one
knew why.
Later came structural engineering, the science of building.
Buildings did not fall down any more and, moreover, architects
could better adapt to new materials. Fast forward to today,
when we have amassed a fine-tuned body of intuitive rules for
constructing organizations, logistical supply chains, military
organizations, and intelligence systems. Nevertheless,
sometimes our organizations fall down and we do not always know
why.
Complexity science is the structural engineering
organizations. Why complexity science now? The short answer is
computers powerful enough to model and even engineer
organizations. Where did complexity science come from? Los
Alamos National Labs, as well as scientists like MacArthur
Award-winning biologist Dr. Stuart Kaufman, a founder of the
Santa Fe Institute, and our company, Bios Group, a leading
complexity science company in the world.
I will close with some examples of projects using
complexity science. We are building computational models of
financial instability to anticipate international financial
crises before they occur, like identifying the dry forest where
a forest fire may later break out. For DARPA, we are
constructing thousands of Sherlock Holmes-like software agents
to sift through millions of often inconsistent intelligence
data.
For the Joint Chiefs, we are building models of the drug
flow from South America to Florida, a battlefield-like
situation with both sides shifting strategies, often very
quickly, looking for the most efficacious, robust and adaptable
policies in the face of uncertainty for our side.
In conclusion, we would enjoy further briefing this
committee and other government bodies on this new structural
engineering of organizations, the science of complexity. Thank
you, Mr. Chairman, Senator Inouye, and members of the
committee.
[The statement follows:]

PREPARED STATEMENT OF JAMES W. HERRIOT, PH.D.

Mr. Chairman and members of the Defense Appropriations
Subcommittee: A new powerful science is emerging which is changing the
way we operate our military, formulate our strategies, manage our
logistics, and defend our nation. This is the Science of Complexity.
This change is underway now, as I will describe in some examples.
A few hundred years ago scientists told us where cannon balls would
land. Now this new Science of Complexity is telling us where
organizations will land--or more precisely about the dynamics of large
complex organizations composed of millions of individual interacting
parts--like millions of ricocheting, colliding billiard balls. These
parts may be bio-molecules in a living cell. They may be soldiers,
tanks, and airplanes in a complex field operation. These parts may be
drug runners and Coast Guard ships. These parts may even be fragments
of intelligence data which, if pieced together swiftly enough, can help
analysts foretell of a terrorist attack or an international financial
collapse.
The important news is that Complexity Science has matured, and
turned the corner from academic pure science to real valuable
applications.
What is Complexity Science? Perhaps this is best answered with an
analogy. Several hundred years ago the Masons built the cathedrals of
Europe. They had an exquisitely fine-tuned body of intuitive rules for
constructing these stone masterpieces. Nevertheless, occasionally the
cathedrals fell down, and no one knew why. Later, structural
engineering came along: the science of building. Buildings didn't fall
down anymore. Moreover, architects could be more innovative, designing
more productive spaces and adapting to new materials like steel. Fast
forward to today when we have amassed an impressively fine-tuned body
of intuitive rules for constructing organizations, logistical supply
chains, military operations, and intelligence data systems.
Nevertheless, sometimes our organizations fall down. And we don't
always know why.
Complexity Science is the ``structural engineering'' of
organizations. Complexity Science contains the dynamics and rules for
designing large organizations, financial systems, operations,
intelligence systems, etc. And like the cathedral architects of the
past, today's generals, officers, CEOs, and business managers can be
more innovative, designing more productive, adaptable, robust
organizations in uncertain environments. In military parlance, the
human is in the loop--more than ever.
Why is Complexity Science coming to the fore now? The short answer
is computers. To understand existing organizations, and to ``engineer''
new organizations, we model them--and to do that we need today's very
powerful computers.
Where did Complexity Science come from? Los Alamos National Labs
was a key birthplace of these ideas, as well as scientists like
MacArthur Award winning biologist, Dr. Stuart Kauffman, a founder of
the Santa Fe Institute and founder of our company, Bios Group, Inc.--
the leading Complexity Science company in the world.
I will close with some examples of projects using Complexity
Science. We have many business projects with companies like Procter &
Gamble, Ford, United Airlines, etc. However, I will focus on three of
our DOD projects.
We are building computational models of financial instability to
look for signs of, and to anticipate, international financial crises
before they occur. This is akin to identifying the dry forest where a
forest fire might later break out.
For DARPA we are (and I am personally) working on a program called
Evidence Marshalling. Here we are constructing a few--soon thousands--
of Sherlock Holmes-like software agents to sift though millions of
often-inconsistent intelligence facts looking for the best surviving
hypotheses.
For the Joint Chiefs, we are building models of the drug flow from
South America to Florida. This is a battlefield like situation with
both sides shifting strategies, often very quickly. Here we are
exploring what mathematicians call policy space, looking for the most
efficacious, robust, and adaptable policies--for our side.
In conclusion, the Science of Complexity is emerging as the
powerful new ``structural engineering'' of organizations, operations,
and strategy. Although Complexity Science is relatively new, it
promises radical changes. We are already employing it to build more
productive, more cost-effective, more adaptable organizations,
logistics, and intelligence.
We would enjoy the opportunity to further brief this committee and
other government bodies on this new Science of Complexity, and on the
many new opportunities this science opens up for our nation. Thank you
Mr. Chairman and members of the committee.

Senator Inouye. Do you have papers on this complexity
science?
Dr. Herriot. Yes, I can give you papers.
Senator Inouye. Confusing, but yet intriguing.
Dr. Herriot. How would we best get those to you?
Senator Inouye. Just mail it to the U.S. Senate,
Appropriations Committee.
Dr. Herriot. We will do that. Thank you.
Senator Inouye. Thank you very much, sir.
May I now call upon the Deputy Director of the National
Security and Foreign Relations Division, American Legion, Mr.
Dennis Michael Duggan.

STATEMENT OF DENNIS MICHAEL DUGGAN, DEPUTY DIRECTOR,
NATIONAL SECURITY-FOREIGN RELATIONS
DIVISION, THE AMERICAN LEGION

Mr. Duggan. Good morning, Senator Inouye and members of the
Appropriations Subcommittee on Defense. On behalf of the
American Legion, we again would like to convey our sincere
thanks and gratitude for this opportunity to present its views
with regard to the fiscal year 2002 defense budget. Needless to
say, I will be as brief as I can.
Like you, we in the Legion are anticipating the results of
the Defense Department's strategy review and we hope it is
completed in time to be considered in the fiscal year 2002
defense budget. We also believe a supplemental appropriations
budget is needed to address a number of defense items, to
include for example the defense health program, which has been
critically underfunded over the past number of years.
Undoubtedly, a strategy review for the long term is
certainly needed, but such a review we believe is not required
for the immediate necessities, like military pay raises,
military housing allowances, and of course the Montgomery GI
Bill (MGIB). Our top priority at this time very frankly, sir,
is funding military health care and military treatment
facilities, as well as the TRICARE for Life program for
Medicare-eligible military retirees.
Secondly, as mentioned, we do continue to push for the
concurrent receipt of military retirement pay and veterans
disability compensation, which has been a major injustice to
disabled veterans and retirees over the years.
Finally, we also believe that the time has come and is
overdue to eliminate the unfair automatic offset at age 62 of
the military survivors benefits program with social security
benefits for military survivors who are at that stage where
they desperately can use that money.
Mr. Chairman, the Legion recommends that over the long term
the following items be considered for implementation: One,
continued improvement in military pay, health care, housing
allowances, and housing, and of course, like we said, improved
MGIB benefits.
Defense spending we believe as a percentage of gross
domestic product needs to be maintained, we believe, on the
order of at least 3 percent of gross domestic product, instead
of the current 2.7 to 2.9 percent. Defense we feel has been
underfunded in the last, actually the last 13 to 15 years.
The Quadrennial Defense Review, which will be reviewed this
year and evaluated, needs to be completely evaluated at least
from the standpoint that it has never provided the forces nor
the capabilities and resources to fight two nearly simultaneous
major regional conflicts. Recognizably, that is being
considered in the strategy review. The strategy-resource
mismatch we hope, which has plagued past and current strategy,
needs to be desperately eliminated.
Also, force modernization, to include the Army
transformation program of General Shinseki, must continue to
be, we believe, adequately funded.
Finally, as mentioned, the National Guard and Reserves need
to be realistically manned, structured, equipped, and
maintained at high readiness levels. We have been aware lately
that I believe that it was a National Guard helicopter deadline
rate has been reported in the vicinity of 60 percent. If that
is true, we believe that is unacceptable and needs to be
improved.
Senator Inouye, Senator Stevens, the armed forces owes you
a debt of gratitude for all you have done for them over the
years. The American Legion also would like to add its sincere
gratitude to that. Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF DENNIS M. DUGGAN

Mr. Chairman, The American Legion is grateful for the opportunity
to present its views regarding defense appropriations for fiscal year
(FY) 2002. The American Legion values your leadership in assessing and
appropriating adequate funding for quality-of-life, readiness and
modernization of the nation's armed forces. As history continues to
demonstrate, it is important for Congress to meet its constitutional
responsibilities to provide for the common defense in truly a highly
uncertain world.
With the end of the Cold War, the clear and identifiable threat
posed by easily identified foes no longer exists. Today America faces a
myriad of threats and challenges that appear more perplexing, complex
and difficult. Serious regional threats continue to plague freedom and
democracy, especially in areas like the Balkans, North Korea, the
People's Republic of China, Iraq and Iran. America now must confront
the on-going proliferation of weapons of mass destruction and
international terrorism posed by rogue nations and radical groups.
President Bush's total budget request for fiscal year 2002 totals
over $1.98 trillion and allocates $310.5 billion for defense or only
15.6 percent for defense and well over 50 percent for social programs
and entitlement spending. The fiscal year 2002 defense budget
represents a $14.2 billion increase in defense spending over the
current funding level, but it is still 40 percent below the 1985 Reagan
budget that eventually led to the end of the Cold War. In 1990, America
was spending 5.1 percent of the gross domestic product on defense. The
proposed fiscal year 2002 defense budget of $310 billion only
represents 2.7 percent of the GDP, less than before the 1941 Japanese
attack on Pearl Harbor. Military manpower has been continually reduced
from 2.17 million in 1987 to 1.37 million.
The nation needs to invest more money than the current
Administration is requesting or projecting to spend in order to
maintain credible military capabilities. The White House requested DOD
to conduct a thorough review of the current two-war strategy, as well
as military force structures and manpower for the long-term. The fiscal
year 2002 defense budget request may be increased, but The American
Legion is led to believe that the new Administration would not submit a
fiscal year 2001 defense supplemental spending request until the review
was completed. The American Legion believes there are numerous short-
term improvements in quality-of-life concerns, military readiness and
force modernization already identified that should be addressed
immediately.
The President promises an increase of $5.7 billion in military
quality-of-life benefits that include a 4.8 percent raise in pay and
allowances, $400 million for military housing improvements, and $3.9
billion to fund military health care initiatives. The American Legion
urges the Congress to increase the defense appropriations to meet these
quality-of-life improvement promises. Granted, the Administration may
need more time to develop budgets based on future strategic
requirements, but additional time is not required to realize the need
for funding health care, pay raises, housing, child care, education,
and other family-based programs that demand immediate attention.
National Commander Ray Smith recently visited American troops in
South Korea, as well as a number of installations throughout the United
States. During these visits, he was able to see first hand the urgent,
immediate need to address these real quality-of-life challenges faced
by servicemembers and their families. The marked decline in quality-of-
life issues for servicemembers, coupled with heightened operational
tempos, plays a key role in the recurring recruitment and retention
woes and should come as no surprise. The operational tempo and lengthy
deployments must be reduced. Military pay must be on par with the
competitive civilian sector. If other benefits, like health care
improvements, commissaries, adequate quarters, quality child care, and
improved school systems are ignored, it will only serve to further
undermine efforts to recruit and retain the best this nation has to
offer.
The American Legion has developed a new program to encourage
Legionnaires and their families spend more quality time with today's
military members and their families. During visits to active duty posts
and National Guard armories, American Legion leaders heard soldiers
tell of inadequate pay, housing problems, health care difficulties, and
child care concerns.

MODERNIZATION

The very force projected from the build-up in the early 1980s is
the one being worn out as a result of extensive operational deployments
and inadequate funding. As former Secretary of Defense Schlesinger
previously indicated before the House Armed Services Committee, the
United States military continues to live off and wear out the
``capital'' of the Cold War. Modernizing and maintaining even today's
smaller military forces takes the kind of sustained commitment and
fiscal investment, in the future, that took place in the early 1980s.
What this nation really cannot afford is another decade of declining
defense budgets and shrinking military forces. If America is to remain
a superpower able to promote and protect its global interests, it must
be capable to project force with complete confidence, using state-of-
the-arts weaponry, in a timely manner.
The American Legion believes no soldier, sailor, aviator or Marine
should go into battle without the very best training, equipment and
weaponry available to win the war. No enemy should ever have a
technological edge over US forces. To achieve this objective, Defense
modernization efforts must remain a top priority of the Administration
and Congress.

READINESS

In recent years, over-optimistic assumptions about actual funding
requirements, coupled with multiple unbudgeted contingency operations,
have resulted in a series of unit readiness problems. Training goals
are not being met. Military readiness ratings have plunged due to
reductions in operations and maintenance accounts as a result of
extended peacekeeping operations. Both the 1st Infantry Division and
the 10th Mountain Division felt the adverse consequences of
peacekeeping operations on combat readiness. Recently, the 3rd Infantry
Division was rated as less than combat-ready due to lack of combat-
oriented training and personnel. Today, thousands of military personnel
(both active and Reserve components) are deployed to about 140
countries around the globe. At any given time, 26 percent of the
active-duty military force is deployed to overseas commitments. Members
of the armed forces have little opportunity to spend meaningful time
with their families. Junior officers are leaving the military in large
numbers. Maintenance of equipment and weapon delivery systems is in
peril because of limited spare parts inventories. Due to depleted
supplies of parts, the cannibalization of parts and creative
engineering has become a common practice. Manpower shortages have
resulted in ships cross-decking or borrowing of crewmembers from other
ships in order to deploy. Such back-to-back tours adversely impact crew
integrity, morale, and readiness. Hands-on training, actual flying
hours, and ammunition are being restricted based on available funding.
When proficiency cannot be maintained, readiness is compromised and
this places the nation's ability to wage high intensity conflict at
risk.

QUADRENNIAL DEFENSE REVIEW

Since the collapse of the Soviet Union in 1991, America has
conducted three substantial assessments of its strategy and force
structures necessary to meet the national defense requirements. The
assessment by the former President Bush Administration (``Base Force''
assessment) and the assessment by the former President Clinton
Administration (``Bottom-Up Review'') were intended to reassess the
force structure in light of the changing realities of the post-Cold War
world. Both assessments served an important purpose in focusing
attention on the need to reevaluate America's military posture; but the
pace of global change necessitated a new, comprehensive assessment of
the current defense strategy for the 21st Century.
The American Legion continues to support the force structure
proposed by the Base Force Strategy: Maintain 12 Army combat divisions,
12 Navy aircraft carrier battle groups, 15 Air Force fighter wings and
three Marine Corps divisions, and a total manpower strength of at least
1.6 million. The American Legion supports the theory behind the two-war
strategy: if America were drawn into a war with one regional aggressor,
another could be tempted to attack its neighbor. Especially, if this
aggressor were convinced that America and its allies were distracted,
lacked the will to fight conflicts on two fronts, or did not possess
the military power to deal with more than one major conflict at a time.
Determining the right size of United States forces for more than one
major conflict would provide a hedge against the possibility that a
future adversary might mount a larger than expected threat. It would
also allow for a credible overseas presence that is essential in
dealing with potential regional dangers and pursuing new opportunities
to advance stability and peace. The American Legion believes such a
strategy, however, should be threat-based rather than budget-driven.
Furthermore, the strategy must employ more robust force structures
and increased budgeting for quality-of-life, readiness and
modernization than that recommended in the Bottom-Up Review or its
follow-on Quadrennial Defense Review (QDR). The American Legion
believes that the two-war strategy has not been adequately funded. The
American Legion believes the ``win-win'' two-war Bottom-Up Review
strategy was delusional. With growing worldwide commitments, America
has a ``win-hold'' strategy, at best, with only 10 Army combat
divisions and three Marine divisions to utilize.
Peacekeeping and humanitarian operations, that do not serve vital
national security interests, further detract from America's combat
power and military readiness. Funding for peacekeeping operations must
be congressionally approved, on a case-by-case basis, and fully
appropriated by Congress rather than funded through the Services'
limited operations and maintenance accounts. America expects its
civilian and military leadership to develop a reasonable and common
sense national military strategy. If all other reasonable alternatives
are explored, United States forces must only be committed in response
to threats against America's vital interests.
The current national security and military strategies prescribed in
the QDR fail to match increased military missions with the required
resources. The QDR, like the Bottom-Up-Review, provides neither the
forces, lift capabilities, nor budgets to fight two nearly simultaneous
major regional conflicts and win. Peacekeeping operations fail to
properly train combat forces to win wars. Congress and DOD need to
provide a strategy that better matches missions with resources.

PROCUREMENT

Only a few major systems currently in production would be funded in
the fiscal year 2002 defense budget. The funding level for weapons
procurement is one of the lowest of any Administration, since 1950 and
has been some 71 percent less than that of 1985. The American Legion
fully supports the Army's Transformation Program. Major development
programs that The American Legion also supports include the Air Force
F-22 fighter and C-17, F/A-18Es for the Navy and Joint Strike Fighters
for the Air Force and Navy and more DDG-51 destroyers. Unquestionably,
the Navy will also need to acquire more submarines.
If left unadvised, omissions in DOD's modernization budget could
have the following implications:
--They will result in the continued deterioration of the defense
industrial base.
--The future technological superiority of American forces will be at
risk thereby increasing the danger to servicemembers should
they be called into combat, and
--The failure to replace and upgrade equipment in a timely manner
will create a massive modernization shortfall in each of the
military services and possibly, lead to even more serious
readiness problems in the long run.
The American Legion further urges Congress to expedite the
procurement of improved and sensitive equipment for the detection,
identification, characterization and protection against chemical and
biological agents. Current alarms are not sensitive enough to detect
sub-acute levels of chemical warfare agents. Improved biological
detection equipment also needs to be expedited.
The American Legion opposes further termination or curtailing of
essential service modernization programs, diminution of defense
industrial capabilities, and rejects the transfers of critical defense
technologies abroad.
The American Legion firmly believes with the continuing threat of
nuclear proliferation, America should retain its edge in nuclear
capabilities as represented by the TRIAD system, and the highest
priority should be the deployment of a national missile defense.
Although the development and deployment of advanced theater missile
defenses to protect United States forward deployed forces is
imperative; any dismantling of acquisition programs to defend the
American people is imprudent. America should focus on developing and
deploying by 2003 an anti-ballistic missile detection and interception
system that is capable of providing a highly effective defense against
limited attacks of ballistic missiles.

ACTIVE FORCE PERSONNEL

The American Legion is deeply concerned that a number of influences
pose significant--and often underestimated--recruitment, retention and
readiness risks for the remainder of the decade.
Mr. Chairman, The American Legion and the armed forces owe you and
this Subcommittee a debt of gratitude for your strong support of
military quality-of-life issues. Nevertheless, your assistance is
needed now more than ever. Positive congressional action is needed in
this budget to overcome old and new threats to retaining the finest
military in the world. Servicemembers and their families continue to
endure physical risks to their well being and livelihood, substandard
living conditions, and forfeiture of personal freedoms that most
Americans would find unacceptable. Worldwide deployments have increased
significantly, and a smaller force has operated under a higher ops
tempo with longer work hours and increased family separations.
Now is the time to look to the force recruiting and retention
needs. Positive congressional action is needed to overcome past years
of negative career messages and to address the following quality-of-
life features:
--Closing the Military Pay Gap With the Private Sector.--The Chairman
of the Joint Chiefs of Staff previously stated that the area of
greatest need for additional defense spending is ``taking care
of our most important resource, the uniformed members of the
armed forces.'' To meet this need, he enjoined Members of
Congress to ``close the substantial gap between what we pay our
men and women in uniform and what their civilian counterparts
with similar skills, training and education are earning.'' But
11 pay caps in the past 15 years took its toll and military pay
continues to lag behind the private sector by about ten
percent. The American Legion applauds the 3.7 percent pay raise
effective on January 1, 2001 and E-5, E-6 and E-7 grade-
adjustments to pay to be made in July 2001. With the new
Administration pledging to significantly increase military pay
raises above that dictated by the ``ECI plus one-half of one
percent,'' there is excitement in the field. We urge you to
support the new Administration's plan.
--Basic Allowance for Housing (BAH).--For those who must live off
base, the provision of the Basic Allowance for Housing (BAH) is
intended to help with their out-of-pocket housing expenses.
Former Secretary of Defense Cohen set a goal of entirely
eliminating average out-of-pocket housing expenses. However, at
this time it has been estimated that BAH only accounts for
about 70 percent of out-of-pocket housing costs. This committee
has taken strong steps in recent times to provide funding to
move toward lowering such expenses. Please continue to work to
close the gap between BAH and the member's average housing
costs.
--Montgomery G.I. Bill Enhancements (MGIB).--The current veterans'
educational benefit, the Montgomery GI Bill, has failed to keep
pace with escalating educational costs and is significantly
diminished in relation to the unique educational benefits
offered in the original GI Bill. Today's military educational
benefits package directly competes with other federally funded
educational programs, such as AmeriCorp, Pell Grants and others
that offer equal or greater monetary benefits with less
personal sacrifice and hardships. The American Legion believes
that the veterans' educational benefits package for the 21st
Century must be designed to recruit outstanding individuals to
meet the needs of the armed forces and to serve as a successful
transition instrument from military service back into the
civilian workforce.

RESERVE COMPONENTS

The advent of smaller active duty forces reinforces the need to
retain combat-ready National Guard and Reserve Forces that are
completely integrated into the Total Force. The readiness of National
Guard and Reserve combat units to deploy to a second major regional
conflict will also cost in terms of human lives unless Congress is
completely willing to pay the price for their readiness. With only ten
active Army divisions in its inventory, America needs to retain the
eight National Guard divisions as its life insurance policy.
Growing concerns are that the Reserve Components, especially the
National Guard, should not be overused in contingency operations, as
these servicemembers have regular civilian jobs and families as well.
The American Legion understands that retention rates and, therefore,
strength levels are falling in those States deployed or scheduled to
deploy Guardsmen overseas. Governors of these states continue to
express concern that state missions will not be accomplished. The
National Guard from 44 States has a presence in 35 foreign countries.
The American Legion is also supportive of all proposed quality-of-
life initiatives that serve to improve living and working conditions of
members of the Reserve components and their families, to include
unlimited access to commissaries.

QUALITY-OF-LIFE

Just as military manpower levels, force structures, operational
tempos and defense budgets need to be stabilized, so must quality-of-
life features for servicemembers and their families. This includes
enhancements to compensation and incentives to preclude seriously
degrading the All-Volunteer Force. The American Legion believes that
the most important message is to sustain the momentum begun in the
106th Congress:
--Military pay raises;
--improved housing;
--access to quality health care;
--family support activities for the active duty and Reserve
components;
--TRICARE for Life for Medicare-eligible military retirees;
--full concurrent receipt of military retirement pay and veterans
disability compensation; and,
--improved Survivors Benefit Plan (SBP) benefits for Social Security
eligible surviving spouses of military retirees.

HEALTH CARE FOR MILITARY BENEFICIARIES

Today, there are approximately 8.2 million beneficiaries in the
military health care program. Military retirees and their dependents
make up nearly one half of that number, and over 500,000 retirees have
lost or will lose their access to military health care as a result of
the closure of approximately 40 percent of military treatment
facilities. Access to affordable health care, regardless of age, status
or location, represents a major concern among military retirees. Until
recently, military retirees were led to believe that they were entitled
to free lifetime health care--after having served 20 or more years in
the most demanding and dangerous of professions. The promise, of
lifetime health care was perpetuated in military recruitment literature
as recently as 1993.
The creation of ``TRICARE for Life'' and a TRICARE Senior Pharmacy
benefit in Public Law 106-398 was an historic triumph for Congress and
those 1.4 million Medicare-eligible military retirees and dependents.
While TRICARE for Life came with its own funding stream in fiscal year
2001, money must be budgeted to provide for the program for fiscal year
2002. The American Legion recommends that you make this important
program a reality by providing the funding to start the program. The
American Legion also applauds your work last year to eliminate TRICARE
co-payments for active duty family members. However, several other
important measures signed into law are on hold due to lack of funding.
These include extending the TRICARE Prime Remote program to family
members; lowering the TRICARE Standard catastrophic cap (maximum out-
of-pocket expenses per fiscal year) from $7,500 to $3,000; providing
TRICARE coverage for school physicals for dependents; and reimbursement
for certain travel expenses for TRICARE Prime beneficiaries. The
American Legion recommends this committee to make these important
programs work by providing appropriations to get the job done. The
American Legion recommends that this Subcommittee take the next step to
make sure that the new military health care improvements come to
fruition.
Beginning October 1, 2002, TRICARE for Life (TFL) will be fully
funded through the Medicare-eligible Retiree Health Care Fund. But TFL
actually will be implemented one year earlier--on October 1, 2001. This
first-year funding requires an increase in appropriated defense funds
over and above the normal defense budget amount. TFL will be funded in
any event, but without the added money, the Pentagon would have to pay
for it by ``robbing'' other needed DOD programs. Providing the full
added TFL funds sends a powerful signal that Congress intends to honor
the lifetime health care commitment to older servicemembers without
cutting funds for other needed readiness or quality-of-life programs.
The American Legion is grateful for Senator Domenici's strong
leadership in proposing to fully fund military health care.
The American Legion recommends an additional $1.4 billion be added
to the Defense Health Program to meet health benefit obligations to
military beneficiaries for the current fiscal year. This program has
been chronically under-funded for years.
The American Legion appreciates the significant military health
care enhancements enacted in the fiscal year 2001 Floyd D. Spence
National Defense Authorization Act. The American Legion recommends that
Congress reiterate its commitment to authorize and appropriate
sufficient funds for these improvements within DOD's Health Program,
and further, to direct the Health Care Finance Administration (HCFA) to
reimburse DOD for its care of Medicare-eligible military families at
Military Treatment Facilities (MTFs).
The Military Health System (MHS) is chronically under-funded,
resulting in execution shortfalls, lack of adequate equipment
capitalization, failure to invest in infrastructure and slow
reimbursement to managed care support contractors. For a number of
years, MHS has been forced to rely on emergency supplemental
appropriations or the reprogramming of funds within DOD.
The military's health care program is one of the most important
benefits afforded the men and women who serve in or have retired from
the uniformed services. The promise of free health care in military
treatment facilities (MTFs) was a major selling point in the military's
recruiter's and career counselor's pitch to enlist or retain personnel
in the uniformed services.
other military retiree issues
The American Legion believes strongly that quality-of-life issues
for retired military members and families also are important to
sustaining military readiness over the long term. If the Government
allows retired members' quality-of-life to erode over time, or if the
retirement promises that convinced them to serve are not kept, the
retention rate in the current active-duty force will undoubtedly be
affected. The old adage you enlist a recruit, but you reenlist a family
is truer today than ever as more career-oriented servicemembers are
married or have dependents.
Accordingly, The American Legion believes Congress and the
Administration must place high priority on ensuring that these long-
standing commitments are honored:
--VA Compensation Offset to Military Retired Pay (Retired Pay
Restoration).--Under current law, a military retiree with
compensable, VA disabilities cannot receive both military
retirement pay and VA disability compensation. The military
retiree's retirement pay is offset (dollar-for-dollar) by the
amount of VA disability compensation awarded.
The purposes of these two compensation elements are fundamentally
different. Longevity retirement pay is designed primarily as a force
management tool that will attract large numbers of high-quality members
to serve for at least 20 years. A veteran's disability compensation is
paid to a veteran who is disabled by injury or disease incurred or
aggravated during active-duty military service. Monetary benefits are
related to the residual effects of the injury or disease or for the
physical or mental pain and suffering and subsequently reduced
employment and earnings potential. Action should be taken this year to
provide full compensation for those military retirees who served more
than 20 years in uniform and incurred service-connected disabilities.
Disabled military retirees are the only retirees who pay their own
disability compensation from their retirement pay. It is time to cease
this inequitable practice. The American Legion supports funding to
provide full concurrent receipt to all eligible disabled military
retirees.
--Social Security Offsets to the Survivors' Benefits Plan (SBP).--The
American Legion supports amending Public Law 99-145 to
eliminate the provision that calls for the automatic offset at
age 62 of the military SBP with Social Security benefits for
military survivors. Military retirees pay into both SBP and
Social Security, and their survivors pay income taxes on both.
The American Legion believes that military survivors should be
entitled to receipt of full social security benefits which they
have earned in their own right. It is also strongly recommended
that any SBP premium increases be assessed on the effective
date, or subsequent to, increases in cost of living adjustments
and certainly not before the increase in SBP as has been done
previously. In order to see some increases in SBP benefits, The
American Legion would support a gradual improvement of survivor
benefits from 35 percent to 45 percent over the next five-year
period. The American Legion also supports initiatives to make
the military survivors' benefits plan more attractive.
Currently, about 75 percent of officers and 55 percent of
enlisted personnel are enrolled in the Plan.
--Uniformed Services Former Spouses Protection Act (USFSPA).--The
American Legion urges support for amending language to Public
Law 97-252, the Uniformed Services Former Spouses Protection
Act. This law continues to unfairly penalize active-duty armed
forces members and military retirees. USFSPA has created an
even larger class of victims than the former spouses it was
designed to assist, namely remarried active-duty servicemembers
or military retirees and their new family. The American Legion
believes this law should be rescinded in its entirety, but as
an absolute minimum, the provision for a lifetime annuity to
former spouses should be terminated upon their remarriage.

CONCLUSION

Twenty-eight years ago America opted for an all-volunteer force to
provide for the national security. Inherent in that commitment was a
willingness to invest the needed resources to bring into existence a
competent, professional, and well-equipped military. Now is not the
time to dismantle, through the consequences of under-funding national
defense, but rather to fully support the all-volunteer force.
What needs to be done? The American Legion recommends, as a
minimum, that the following steps be implemented:
--Continued improvements in military pay raises, equitable increases
in Basic Allowances for Housing and Subsistence, military
health care, improved educational benefits under the Montgomery
G.I. Bill, improved access to quality child care, and other
quality-of-life issues.
--Defense spending, as a percentage of Gross Domestic Product needs
to be maintained between 3 and 4 percent annually. At least
$160 billion should be appropriated over six years to address
the immediate concerns of the Joint Chiefs of Staff.
--The Quadrennial Defense Review needs to be fully reevaluated as it
provides neither the forces nor the defense budgets to fight
two nearly simultaneous major regional conflicts, while also
conducting peacekeeping operations. The strategy-resources
mismatch needs to be eliminated.
--Force modernization needs to be realistically funded and not
further delayed or America is likely to unnecessarily risk many
lives in the years ahead;
--The National Guard and Reserves must be realistically manned,
structured, equipped and trained; fully deployable; and
maintained at high readiness levels in order to accomplish
their indispensable roles and missions.
Mr. Chairman, this concludes The American Legion statement.

Senator Inouye. Mr. Duggan, the chairman and I are both
members of the American Legion and as such you can be assured
we will look at your statement very carefully, sir.
Mr. Duggan. Thank you, sir.
Senator Inouye. May I now call upon Commander Mike Lord,
Co-Chair of the Military Coalition Health Care Committee.
Commander Lord.

STATEMENT OF MIKE LORD, COMMANDER, U.S. NAVY [RETIRED],
CO-CHAIR, THE MILITARY COALITION HEALTH
CARE COMMITTEE

Mr. Lord. Good morning, Senator Inouye. In a classic
example of actions speaking louder than words, last year's
Congress proclaimed in the most effective way possible that it
really does put people first and it did indeed view the
fulfillment of the lifetime health care commitment as a top
priority. The Congress responded to a situation that needed a
solution in a way that exceeded the hopes of even the most
optimistic among us. On behalf of our grateful beneficiaries,
we say thank you. You have really made a difference.
While the Military Coalition is optimistic that the
solution has been identified, we cannot ignore the storm clouds
on the horizon. Just as last year's legislation has given us
much to be grateful for, it has also presented a major
challenge. It is a simple fact that the provision of health
care does not come without cost and it is the issue of funding
the benefit that has us most concerned.
Along with the reality of rising health care costs is the
long history of funding problems experienced by the military
health system. As you well know, Senator Inouye, the Military
Health System (MHS) has for the last two decades been plagued
with annual budget underestimations that have left significant
portions of the program underfunded. This year is no exception
as DOD faces a reported $1.4 billion shortfall in the defense
health program for the current fiscal year.
The consolidated defense health program (DHP), in existence
since 1993, has experienced shortfalls requiring supplemental
funding every year since it was created. The understated
budgets have often been addressed by reprogramming funds from
the military departments, supplemental appropriations from
Congress, or internal adjustments to the DHP, and all of this
before the introduction of an additional 1.5 million Medicare-
eligible beneficiaries.
Because the health benefit is so crucial, it cannot be
allowed to founder because of lack of funding. It is our hope
that the over 65 provisions enacted by Congress will serve as a
much-needed reminder that quality health care comes at a cost
and will finally force the parties to accept the reality that
the cost must be identified accurately, up front, and funded
completely.
Senator Inouye, we have addressed a few additional funding-
related items in our written testimony. These include some
additional health care matters and funding issues related to
personnel and compensation. In the interest of time, I will not
go into detail here, but I urge you to consider those matters
as well.
Finally, Senator Inouye, I would like to conclude by
observing that last year the 106th Congress did the right thing
by fulfilling health care commitments made long ago and
provided a clear definition for the scope of the health care
benefit, that being TRICARE for Life. As this committee
indicated last year, the benefit needed to be defined so this
committee could fund it. Now that it has been defined, we urge
you to ensure that it is adequately funded, to see to it that
the benefit is delivered as promised to all DOD beneficiaries.
Thank you, Senator Inouye.
[The statement follows:]

PREPARED STATEMENT OF MIKE LORD

On behalf of The Military Coalition, a consortium of nationally-
prominent uniformed services and veterans organizations, we are
grateful to the Subcommittee for this opportunity to express our views
concerning issues affecting the uniformed services community. This
testimony provides the collective views of the following military and
veterans organizations, which represent approximately 5.5 million
current and former members of the seven uniformed services, plus their
families and survivors.
--Air Force Association
--Air Force Sergeants Association
--Army Aviation Association of America
--Association of Military Surgeons of the United States
--Association of the United States Army
--Chief Warrant Officer and Warrant Officer Association, United
States Coast Guard
--Commissioned Officers Association of the United States Public
Health Service, Inc.
--Enlisted Association of the National Guard of the United States
--Fleet Reserve Association
--Gold Star Wives of America, Inc.
--Jewish War Veterans of the United States of America
--Marine Corps League
--Marine Corps Reserve Officers Association
--Military Chaplains Association of the United States of America
--Military Order of the Purple Heart
--National Guard Association of the United States
--National Military Family Association
--National Order of Battlefield Commissions
--Naval Enlisted Reserve Association
--Naval Reserve Association
--Navy League of the United States
--Non Commissioned Officers Association
--Reserve Officers Association
--The Retired Enlisted Association
--The Retired Officers Association
--The Society of Medical Consultants to the Armed Forces
--United Armed Forces Association
--United States Army Warrant Officers Association
--United States Coast Guard Chief Petty Officers Association
--Veterans of Foreign Wars
--Veterans' Widows International Network
The Military Coalition, Inc., does not receive any grants or
contracts from the federal government.

INTRODUCTION

The Military Coalition (TMC) wishes to express its deepest
appreciation to this Subcommittee for its extraordinary efforts to
address shortfalls in military personnel and health care budgets,
fulfill obligations to active and retired servicemembers, families and
survivors, and sustain recruiting and retention that is so essential to
military readiness.
This testimony summarizes the Coalition's recommendations for
funding needs in these areas for fiscal year 2002.

HEALTH CARE ISSUES

Provide Adequate Funding For The Defense Health Budget
One of the Coalition's top priorities for fiscal year 2002 is to
ensure adequate funding of the Defense Health Budget: to meet readiness
needs, to include full funding of TRICARE, and to provide access to the
military health care system for ALL uniformed services beneficiaries,
regardless of age, status or location. The Coalition believes that an
adequately funded health care benefit is as critical to the retention
of qualified uniformed services personnel and to readiness as are pay
and other benefits. As the Commandant of the U.S. Marine Corps
underscored at the annual TRICARE Conference on Jan. 22, 2001,
``Medical care is a key component of military readiness . . . TRICARE
influences the intangibles of military readiness, such as morale, the
will to fight and dedication to duty . . . Our men and women perform
their daily tasks better if not distracted by worries concerning their
families.''
The Military Health System (MHS) budget has been chronically
underfunded, resulting in execution shortfalls, lack of adequate
equipment capitalization, failure to invest in infrastructure, and slow
reimbursement to Managed Care Support Contractors. Each year, the MHS
has had to rely upon Congress to supply emergency supplemental funding.
The Coalition has serious concerns about the funding shortfall that has
become apparent again this year in the execution of the Defense Health
Program (DHP) budget for fiscal year 2001.
Service health officials indicate an additional $1.4 billion is
essential to meet program needs for the remainder of fiscal year 2001,
including the April 1 implementation of pharmacy benefits for Medicare-
eligibles. If funding is not forthcoming soon, the Service Surgeons
General have testified they face furloughs, limitations of pharmacy
formularies, and extended deferral of equipment maintenance and
repairs. Meanwhile, important benefit upgrades supposed to have been
effective last October have had to be deferred, including a lower limit
on retiree out-of-pocket health expenses, waiver of charges for
military families assigned to remote areas, and reimbursement for
school physicals for servicemembers' children. This shortfall threatens
day-to-day health care operations, has delayed implementation of newly
authorized programs, and threatens essential preparations for the
October 1, 2001 implementation of the new TRICARE For Life (TFL)
coverage that is so important to older military retirees.
As the Subcommittee is aware, TFL will be funded through a DOD
Medicare-eligible Retiree Health Care Fund beginning October 1, 2002.
However, because the statutory effective date for TFL is one year
earlier--Oct. 1, 2001--DOD will require an increase in appropriated
funds over and above the current fiscal year 2002 defense budget
topline if TFL is to reach its full potential, without forcing DOD to
absorb its costs ``out-of-hide.'' fiscal year 2002 is the landmark year
for TFL, and adequately funding the health care budget is the
cornerstone for assuring the program is launched successfully. Doing so
will eliminate any uncertainty and send a powerful signal to all
service beneficiaries that Congress is resolved to make TFL a reality.
In years past, the funding problem was tied to some degree to the
lack of a clearly defined benefit. Uncertain of the benefit, it was
difficult to identify the level of funding necessary to fully support
the Defense Health Program. With the introduction of TFL, the benefit
is defined and funding requirements should now be understood. The
Coalition urges the subcommittee to make it a defense imperative to
provide funds that meet the actual costs for providing health care to
military retirees, active duty service personnel and their families,
and to end the practice of relying on annual supplemental funding to
meet budget shortfalls.
The Military Coalition strongly recommends this Subcommittee
appropriate sufficient funds to fully finance the Defense Health
Program, to include military medical readiness, TRICARE and the DOD
peacetime health care mission, full funding for TFL and to address the
$1.4 billion execution shortfall for fiscal year 2001.

Legislative Adjustments to TFL
Inpatient Hospitalization and Skilled Nursing facility (SNF)
Care.--Based on the experience of The Retired Officers Association
(TROA), regarding hospital stays beyond the Medicare maximum of 150
days, DOD would save only about $150,000 per year by requiring the
beneficiaries to pay the $3,000 TRICARE catastrophic cap, before
TRICARE assumes 100 percent of the cost. [This estimate was derived by
extrapolating the experience of TROA (where 5 of 150,000 insured
beneficiaries exceeded the 150 day Medicare limit in one year) to the
entire 1.4 million Medicare-eligible service beneficiary population.]
Similarly, DOD would save only about $930,000 per year by requiring
beneficiaries to pay the $3,000 catastrophic cap before TRICARE assumes
100 percent of the cost of SNF care beyond the Medicare 100-day
maximum. [This estimate was also derived by extrapolating the TROA
experience (31 of 150,000 beneficiaries exceeded the Medicare 100-day
limit) to 1.4 million potential TFL participants.] These relatively
rare experiences are highlighted by TFL skeptics as examples of how TFL
falls short of Standard Medicare Supplemental Plan F coverage. The
Coalition believes strongly that extending full TFL coverage, when
hospital and SNF stays exceed the Medicare maximums, offers
administrative and public relations benefits that far exceed the tiny
dollar savings that would be foregone.
The Military Coalition recommends authorization and the modest
necessary funding to permit TFL to assume 100 percent of the costs for
service beneficiaries who incur hospital stays that exceed the Medicare
maximum (90 days plus 60-day lifetime reserve) and SNF stays that
exceed the 100-day Medicare maximum.
Private contracts.--In some areas of the country, particularly
rural areas that are medically underserved, beneficiaries are unable to
locate providers who accept Medicare for certain specialized services
and may have to enter into ``private contracts.'' There are also
instances where a beneficiary may be forced to enter into a private
contract because some medical practices have exceeded capacity and are
unable to see additional Medicare patients. Under current policy,
beneficiaries in these situations are liable for 100 percent of the
costs. Conversely, in these circumstances, individuals enrolled in the
Federal Employees Health Benefits Program (FEHBP) do not encounter the
same degree of out-of-pocket costs, because FEHBP pays the copayments
it would have paid if Medicare were first payer.
The Military Coalition recommends that this Subcommittee support
authority and modest funding necessary to permit TFL to make partial
payments for individuals who enter into private contracts with non-
Medicare providers, on the same basis as FEHBP.

Dual Eligible DOD-VA Beneficiaries
The Coalition was disappointed to learn that the President's budget
envisions seeking legislation to force DOD beneficiaries, who are also
eligible for Veterans Administration (VA) medical care, to enroll with
only one of these agencies as their sole source of health care. It is
the Coalition's view that this policy change will be viewed as a
serious breach of faith.
The VA health system delivers specialized care and services for
members with significant disabilities (e.g., prosthetics and treatment
of spinal injuries) that are difficult if not impossible to duplicate
in military facilities. But their needs for such specialized care for
service-connected disabilities should not be turned to their
disadvantage--either to compel them to get all their care from the VA,
or to deny them specialized VA care if they choose routine care for
themselves and their families through TRICARE.
We acknowledge that a critical, but not insurmountable, challenge
for Congress, DOD, and VA will be to implement a suitable policy
framework under which these beneficiaries will be able to access the
health care they have earned. Retired veterans with VA-rated
disabilities are entitled to VA health care and, as a matter of
principle, should not be required to choose between VA health care and
TFL. These service-connected disabled veterans have earned the right to
military health care in return for their careers of service in uniform.
They also have earned access to specialized VA care for the (often
severe) disabilities that their service has imposed on them.
The Coalition strongly recommends that the Subcommittee provide
support and funding to ensure disabled military retirees are not forced
out of either the VA health care or the DOD health care options they
have earned by their career service and personal sacrifices.

Improvements In Tricare
The Coalition is pleased that the fiscal year 2001 NDAA addressed
some of the more egregious problems with TRICARE, and thanks the
Subcommittee for its support in funding provisions to enhance TRICARE
delivery/effectiveness via:
--Modernization of TRICARE business practices by implementing an
internet-based system to simplify and make accessible critical
administrative processes;
--Improvements in claims processing, to include use of the TRICARE
encounter data information system; reducing administrative
delays, and increasing use of electronic claims processing; and
--Increased reimbursements in certain localities where access to
health care services is at risk.
--While Congress has previously given the authority to the Secretary
of Defense to increase reimbursements and mandated improvements
in TRICARE business practices, the Coalition continues to hear
countless accounts from TRICARE Standard beneficiaries who are
frustrated with the lack of provider participation in the
program. While current and previous mandates are greatly
appreciated, we have yet to see a significant impact as
beneficiaries attempt to seek access from providers who will
not accept TRICARE patients; or require payment up front
because they refuse to accept TRICARE reimbursement rates
administrative requirements.
Once providers have left the system, promises of increased
efficiencies have done little to encourage them to return to the system
to care for our beneficiaries.
The Military Coalition recommends that the Subcommittee continue
monitoring provider participation problems and support additional
actions as necessary to resolve these issues.

TRICARE Prime Equity Innovations
The Coalition is grateful that Congress provided authority and
funding to eliminate copayments for active duty family members (ADFMs)
enrolled in TRICARE Prime. This initiative removed financial burdens
for those who were only able to access care through civilian providers.
The Coalition was delighted by the restoration of the TRICARE Prime
benefit for families of servicemembers assigned to remote areas where
there is no TRICARE Prime option. These families were unfairly burdened
by having to pay much higher copayments for care than their
counterparts assigned to areas where they had the opportunity to enroll
in TRICARE Prime.
Fiscal year 2001 is a watershed year for military beneficiaries.
However, the great strides made to improve benefits for ADFMs and
Medicare-eligible beneficiaries have made apparent the continued
shortcomings of the TRICARE system for retirees under 65. Many of these
beneficiaries live in areas not serviced by Prime, thus relying on the
more expensive Standard benefit. Because many live in rural or
metropolitan areas that are medically underserved, they continue to
inform us that they are having difficulty in locating TRICARE
participating providers. This presents a dilemma for members who have
no choice but to rely on providers who demand their fees ``up front''
at the time of service. Obviously, this places an undue financial
burden upon these deserving beneficiaries. In the light of the benefit
enhancements provided to the over 65 retirees (TFL) and the ADFM, it is
apparent that the needs of the under 65 retirees are not being met by
the current TRICARE system. The Coalition believes that one viable
option would be to extend TRICARE Prime Remote to TRICARE-eligible
retirees, their family members and survivors at the same locations
where the program is established for ADFMs.
The Military Coalition strongly recommends that the Subcommittee
work with the Armed Services Committee to authorize and appropriate
sufficient funds to ensure that TRICARE Prime Remote be extended to
retirees, their family members and survivors at the same locations
where it is established for active duty family members.

Travel Reimbursement for Prime Beneficiaries
The Coalition also appreciates Congress's action to reduce the
financial burden for TRICARE Prime beneficiaries in areas where
specialty care is not available. Previously, Prime enrollees were
forced to travel great distances from their MTFs to distant specialty
centers at personal expense. A provision in the fiscal year 2001 NDAA
authorizes TRICARE to cover the expenses of Prime enrollees who have to
travel more than 100 miles to get specialty care will greatly reduce
this burden. However, a further refinement is necessary to achieve the
desired result. If the patient is a minor child, who must or should be
accompanied by a parent or guardian, there is no authority to reimburse
that accompanying individual.
The Military Coalition recommends that the Subcommittee support
authority and funding to permit travel reimbursement for a parent or
guardian of a minor when they accompany the minor to distant specialty
centers.

Custodial Care
Once again, the Coalition is particularly grateful that Congress
has provided a definition of Custodial Care for military beneficiaries
that meets industry standards to provide medically necessary care, and
provided funding for this purpose. While the requirement still has not
been fully implemented across all TRICARE Regions, it is slowly being
put into place. Without Congress' intervention, DOD would have
maintained its ``unique'' definition of medically necessary care for
beneficiaries considered as custodial patients. The result would have
meant cost shifting to Medicaid, loss of medically necessary care for
the most vulnerable of the DOD beneficiary population, or both.
We urge continued oversight by Congress to monitor the
implementation of the new case management program mandated by Public
Law 106-65, the Individual Case Management Program for Persons with
Extraordinary Conditions (ICMP-PEC). The Coalition is eager to learn
the results of the study mandated in Public Law 106-65, Sec. 703 due
March 31, 2000 to determine how other health plans provide care to
custodial patients.
The Coalition is aware that TFL will make an additional 1.4 million
beneficiaries eligible for TRICARE. The Coalition is aware of the
potential impact these new beneficiaries will have upon the DHS and
recognizes that some among this population, which is at the greatest
risk for poor health, will be eligible for the ICMP-PEC. However, the
Coalition is concerned that the current program has been developed in
an incremental and piecemeal fashion and is poorly understood by
providers and beneficiaries. In light of the implementation issues
concerning the under 65 population in ICMP-PEC, the Coalition urges
Congress to instruct DOD to develop a program, in concert with
representatives from advocacy groups, that is equitable to all
beneficiaries.
The Military Coalition recommends that Congress provide continued
oversight to further define what medically necessary care will be
provided to all Custodial Care beneficiaries; and that Congress direct
a study to determine how TFL beneficiaries will be integrated into
ICMP-PEC in an equitable manner; and that Beneficiary Advisory Groups'
inputs be sought in the integration of TFL beneficiaries into the ICMP-
PEC. Coordination of Benefits and the 115 percent Billing Limit Under
TRICARE Standard
In 1995, DOD unilaterally and arbitrarily changed its policy on the
115 percent billing limit in cases of third party insurance. The new
policy shifted from a ``coordination of benefits'' methodology (the
standard for FEHBP and other quality health insurance programs in the
private sector) to a ``benefits-less-benefits'' approach that unfairly
transferred significant costs to servicemembers, their families and
survivors. Regrettably, this insensitive policy change also currently
applies to disabled beneficiaries under 65 for whom Medicare is first
payer and for whom Congress contemplated TRICARE would act as second
payer to Medicare under the ``coordination of benefits'' methodology.
Here is TRICARE's Catch 22. Although providers may charge any
amount for a particular service, TRICARE only recognizes amounts up to
115 percent of the TRICARE ``allowable charge'' for a given procedure.
Under DOD's previous, pre-1995 policy, any third party insurer would
pay first, then TRICARE (formerly CHAMPUS) would pay any balance up to
what it would have paid as first payer (75 percent of the allowable
charge for retirees; 80 percent for active duty dependents).
Under its post-1994 policy, TRICARE will not pay anything at all if
the beneficiary's other health insurance (OHI) pays an amount equal to
or higher than the 115 percent billing limit. (Example: a physician
bills $500 for a procedure with a TRICARE-allowable charge of $300, and
the OHI pays $400. Previously, TRICARE would have paid the additional
$100 because that is less than the $300 TRICARE would have paid if
there were no other insurance. Under DOD's new rules, TRICARE pays
nothing, since the other insurance paid more than 115 percent of the
TRICARE-allowable charge.) In many cases, the beneficiary is stuck with
the additional $100 in out-of-pocket costs.
DOD's shift in policy unfairly penalizes beneficiaries with other
health insurance plans by making them pay out of pocket for what
TRICARE previously covered. In other words, beneficiaries entitled to
TRICARE may forfeit their entire TRICARE benefit because of private
sector employment or some other factor that provides them private
health insurance. In practice, despite statutory intent, these
individuals have no TRICARE benefit.
The Military Coalition strongly recommends that the Subcommittee
support directing DOD to eliminate the 115 percent billing limit when
TRICARE Standard is second payer to other health insurance, to
reinstate the ``coordination of benefits'' methodology, and provide the
necessary funding for this purpose.

PERSONNEL AND COMPENSATION

Personnel Strengths and Operations Tempo
The Coalition has been dismayed at past annual Service requests for
additional force reductions without any corresponding decrease in
operational tempo. Innumerable newspaper reports have told stories of
ships deploying with significant manning shortfalls or of hollow and
overextended units that must cannibalize from others to meet manning
requirements. Other news reports cite poor unit performance during
evaluations because units lacked the time or resources, or both, to
conduct needed readiness training. Still others document the strains on
families when returning servicemembers still see little of their loved
ones because they must work longer duty days to address home-station
workload backlogs and catch-up on training requirements. Service
leaders have tried to alleviate the situation by reorganizing
deployable units, authorizing ``family down time'' following
redeployment, or other laudable initiatives, but such things do little
to eliminate long-term workload or training backlogs.
The Coalition strongly believes force reductions have gone too far
and that simply halting force reductions is inadequate. The force is
already overstrained to meet current deployment requirements, let alone
address any new major contingency that may arise. The grinding
operations tempo has become a major quality of life issue that won't go
away, and it will not be fixed by ``down time'' or expressions of
understanding and encouragement. Deferral of meaningful action to
address this problem cannot continue without risking serious long-term
consequences. Real relief is needed now, and can only be achieved by
increasing the force, reducing the mission, or both.
The Military Coalition strongly recommends restoration of Service
end strengths consistent with long-term sustainment of current
deployments and fulfillment of national military strategy. The
Coalition supports application of recruiting resources/voluntary recall
policies as necessary to meet this requirement. The Coalition urges the
Subcommittee to support and fund manpower options to ease operational
stresses on active and Reserve personnel.

Pay Raise Comparability and Pay Table Reform
The Military Coalition is extremely appreciative of the Congress's
leadership during the last two years in reversing the routine practice
of capping servicemembers' annual pay raises below the average
American's. Your determination to begin making up for those past
shortfalls by funding ``comparability-plus'' pay raises in law through
2006 offered much-needed acknowledgment that the commitment between
servicemembers and their Nation cannot be a one-way street. Likewise,
the July 2000 pay table revision and the targeted pay raises for July
2001 provided more appropriate financial recognition for mid-career and
high-performing servicemembers. But the Coalition urges the
Subcommittee not to consider the work on pay matters complete.
Military and veterans associations know only too well the
tremendous leadership effort required to reverse long-standing trends
and win allocation of additional resources for programs that have been
long-constrained. It must be acknowledged that the annual increases
currently programmed will make up only a small fraction of the
cumulative pay raise sacrifices imposed on servicemembers for almost
two decades. As important as overturning past pay cap practices has
been, we must acknowledge that an extra one-half of one-percent raise
does not put a big boost in the typical enlisted member's take-home
pay. Perhaps the best way to put the issue in perspective is to recall
that the last time a large pay comparability gap coincided with a
retention crisis (in the late 1970's), the gap was eliminated via
double-digit raises in both 1981 and 1982.
Some have speculated that the cumulative 13.5 per cent gap between
military and private sector pay growth between 1982 and 1999 would be
obviated by the July 1, 2000 and 2001 pay table reforms or other
``targeted'' increases. Nothing could be further from the truth. In the
past, when raises have been allocated differentially by grade or
allowance, they have been described in ``aggregate equivalent pay
raise'' terms (i.e., the overall pay raise value of the differential
increase is calculated as if the cost of the initiative were applied
equally across the board to all members). In aggregate terms, the
fiscal year 2000 pay table realignment represented the cost equivalent
of a 1.4 percent across-the-board pay raise. The targeted raises
scheduled for this July equate to an additional 0.8 percent increase in
overall pay. As of January 2001, the cumulative gap will have been
reduced to 10.9 percent. By 2006, it will further decline to 8.3
percent. While this has been great progress, even if the ``ECI plus .5
percent'' pay raise adjustments were sustained beyond 2006,
comparability would not be restored until 2023. The Administration's
proposal to add $1 billion to military pay in 2002 will take us another
important step toward pay comparability, and The Military Coalition
strongly supports that initiative. But, further steps will be needed to
close the gap and restore full pay comparability.

The Military Coalition urges the Subcommittee to provide the
additional $1 billion necessary to address the Administration's
military pay raise proposal for fiscal year 2002, and strongly
recommends the Subcommittee support additional increases in annual pay
adjustments as necessary to eliminate the accumulated pay raise
shortfalls from previous years, as measured against the Employment Cost
Index (ECI).

Basic Allowance for Housing (BAH)
The Military Coalition is most grateful to the Subcommittee for
supporting initiatives to reduce out-of-pocket housing expenses for
servicemembers. Responding to the Congress's leadership on this issue,
DOD proposed plans to reduce out of pocket expenses to 15 percent in
2001 and reduce the median out-of-pocket expense to zero by fiscal year
2005. This aggressive action to better realign BAH rates with actual
housing costs is having a real impact and providing immediate relief to
many servicemembers and families who were strapped in meeting rising
housing/utility costs.
We applaud this initiative and urge the Subcommittee's funding
support, but we ask that more be done. Housing (especially utility)
costs continue to rise, and military pay will remain depressed for the
foreseeable future. For these reasons, we urge the Subcommittee to
provide the funding needed to accelerate BAH increases and eliminate
all out of pocket expenses for servicemembers well before 2005.
The Military Coalition urges BAH funding as necessary to eliminate
servicemembers' out of pocket costs as soon as possible.

Permanent Change of Station Issues
The Military Coalition is very concerned that servicemembers
continue to incur significant out-of-pocket costs in complying with
government-directed relocation orders. Department of Defense surveys
show the government typically reimburses only two-thirds of the costs
members actually incur in such moves. By any comparison, the
servicemember is being short-changed in this area. Federal civilian
employees receive much more substantial reimbursements in conjunction
with government-directed moves, up to and including reimbursement for
house-hunting trips and homeowner closing costs.
It is an unfortunate fact that permanent change of station mileage
allowances and per diem rates have not been adjusted since 1986. The
authorized duration for paying Temporary Lodging Expense allowance
(TLE) was increased to 10 days several years ago, but the maximum
amount payable per day has not been adjusted since 1986. These
important reimbursements are sadly overdue for adjustment, and
servicemembers are paying an unfair price for this delay.
We cannot avoid requiring members to make frequent relocations,
with all the attendant disruptions of children's schooling, spousal
career sacrifices, etc. But the grateful Nation that requires them to
incur these disruptions so often should not be requiring them to bear
so much of the attendant expenses out of their own pockets.
The Military Coalition urges a comprehensive updating of permanent
change-of-station reimbursement allowances in the immediate future to
ease the financial burdens currently being imposed on servicemembers.
Increases should match the percentage increase in the Consumer Price
Index (CPI) since the applicable allowance was last adjusted.

CONCLUSION

The Military Coalition would like to reiterate its profound
gratitude for the extraordinary work this Subcommittee has done to
provide personnel program funding in support of recruiting, retention
and readiness.
But much work also remains to be done that will require the
Subcommittee's continued funding support, particularly for health care
and other compensation programs affecting all members of the uniformed
services community.
Mr. Chairman and Distinguished Members of the Subcommittee, in
closing, we very much appreciate the opportunity to present the
Coalition's views on these critically important topics.

Senator Inouye. I thank you very much, Commander, and I can
assure you we will do our best.
Mr. Lord. Thank you.
The committee will stand in recess. I have been summoned to
vote.
Senator Stevens [presiding]. Any others who want to
testify? Where are we? Mr. Mix.

STATEMENT OF ROBERT R. MIX, EXECUTIVE DIRECTOR OF
GOVERNMENT AFFAIRS, NONCOMMISSIONED
OFFICERS ASSOCIATION ON BEHALF OF THE
NATIONAL MILITARY AND VETERANS ALLIANCE

Mr. Mix. Yes, sir, Mr. Chairman.
Senator Stevens. Good morning.
Mr. Mix. I am Command Sergeant Major Randy Mix, U.S. Army
retired, Executive Director of Government Affairs for the
Noncommissioned Officers Association, here to present testimony
on behalf of the National Military and Veterans Alliance.
Mr. Chairman, distinguished members of the subcommittee,
the National Military and Veterans Alliance is most
appreciative to this subcommittee for both interest in a strong
national defense and objective concern for the individual
service members of all uniformed services. The members of the
alliance salute your past efforts and note that the building
blocks, programs, and benefits put in place for mission and
people have been in the right direction, but need to be
sustained, enhanced, and provided the fiscal resources to
ensure continued viability.
The alliance statement focuses on pay and compensation
issues of those who serve or have served. America's military
personnel must know that their institutional benefits, such as
pay, special compensations, health and survivor benefits, are
secure now and in the future to free them of unnecessary
anxiety and doubt of promises made should they be placed in
harm's way.
There have been extraordinary efforts to restore the value
of military pay to the comparable standard with the civilian
sector over the past few years. While across the board pay
raises need to continue for all personnel, the alliance
additionally recommends that the targeted pay raise be directed
at enlisted grades E-4 through E-9 to eliminate pay compression
in the force structure.
The alliance also strongly supports the concept of pay
equity for members of the Guard and Reserve and would ask for a
top to bottom review to achieve pay parity. Additionally,
flight pay for Reserve component air crews, thrift savings plan
participation, heroism pay, and single rate basic allowance for
housing are addressed in our written testimony.
Military health care system. While there are many issues
concerning health care, the alliance simply requests that the
subcommittee carefully scrutinize the costs of all DOD health
care delivery systems and ensure that adequate fiscal resources
are available for these programs that contribute to military
readiness, keep the promises made to all people who serve long
and faithful careers.
Finally, allow me to comment on concurrent receipt. The
alliance appreciates the efforts of the subcommittee to secure
necessary appropriations to put in place a special pay program
for severely disabled military retirees. While you are not
convened as authorizers, we ask that you aggressively seek
resolution to the concurrent receipt issue that impacts all
disabled veterans. It is past time to secure authorization and
the necessary funding for the program. The alliance pledges you
its full support to get concurrent receipt off of its annual
casket ride through the halls of Congress and recorded on the
rolls of the 107th Congress as a long overdue program
entitlement.
Also, Mr. Chairman, in connection with concurrent receipt,
I would like to mention military widows. Their husbands pay for
a survivor benefit plan, then when the service member dies of a
service-connected condition the government offsets the military
survivor benefit plan dollar for dollar by the amount of
dependency and indemnity compensation. The alliance would like
to see an end to that offset and we request you support such a
proposal if such a proposal and when such a proposal is
included in the national defense authorization bill.
Mr. Chairman and members of the subcommittee, the alliance
is most appreciative of this opportunity to present our
comments for the record. I would be remiss if I did not
acknowledge a new member of the alliance who is not listed in
our written submission, but fully supports the testimony, and
that is the American World War Two Orphans Network.
Mr. Chairman, I thank you for allowing us to be here.
[The statement follows:]

PREPARED STATEMENT OF ROBERT R. MIX

INTRODUCTION

The National Military and Veterans Alliance (NMVA or Alliance) is
most appreciative to the Subcommittee for both its interest in a strong
national defense and equally important its objective concern for the
individual service members of all Uniformed services. Your Subcommittee
has an admirable record in the development of the annual National
Defense Act building from year to year those services and benefits that
ensure readiness of the force and all who have sworn to defend and
protect the Constitution of the United States. The members of the
Alliance salute your past efforts and notes that the building blocks,
programs and benefits, put in place for mission and people have
aggressively been in the right direction but need to be sustained,
enhanced, and provided the fiscal resources to ensure continued
viability.
The Alliance statement will focuses on pay and compensation issues
of those who serve or have served and mutually supported by Alliance
associations. NMVA also recognizes that pay and compensation gains of
the past coupled with enhanced quality of life contribute to the
readiness equation and retention of a sharply honed military force.
Today, the concept of an all-volunteer force is in fact a reality
as is total force integration of active duty, National Guard and
Reserve Components. As envisioned, the past decade has seen the
military force decline by approximately one-third while unforeseen
operational requirements and military tempo have increased over 300
percent. Today, Reserve Components routinely augment active forces
worldwide and have become the force multiplier necessary for military
contingencies, rotational requirements and peacekeeping missions. The
interoperability of active and reserve components is nothing short of
remarkable in planning and execution of missions. The straining points
and effectiveness of a military force historically seem to be the
result of reductions in the number of personnel available for world-
wide operations; redefining the role of the military services for a
global military strategy as currently underway at the Department of
Defense; and, compensating members of the varied components differently
in pay, benefits and health matters.
America's military personnel must know that their institutional
benefits such as pay, special compensations, health and survivor
benefits are secure now and in the future to free them of unnecessary
anxiety and doubt of ``promises made'' should they be placed in harm's
way. Honoring the health care promises to retired military personnel
and their beneficiaries in the past National Defense Authorization Act
has not only served the military retiree community but has fostered
greater trust by today's serving military force in their military
institution.

PAY AND COMPENSATION

Goal: Ensure that America maintains a strong national defense by
maintaining a high quality, all volunteer force based on competitive
pay for its active force and inflation protected retired pay for its
retired force.

Basic Pay
Restoration of the military pay scale is essential:
Year's ago a recurring statement by dedicated military people was
that they could no longer afford to serve and fight . . .'' That
statement is no longer valid because of the significant effort to
restore the value of military pay to some standard of comparability
with the civilian sector. Across the board pay raises need to continue
for all personnel. The Alliance additionally recommends that a targeted
pay raise be directed at enlisted grades E-4 through E-9 to eliminate
pay compression in the force structure and create specific pay
enhancement of every promotion earned.
NVMA recognizes that countless thousands of men and women have
completed long and honorable careers and retired at pay rates that
lagged civilian pay comparability by over 10 percentage points. That
pay ``comparability loss'' dramatically impacted the quality of their
lives while in the military and now even more with the computation of
their retirement checks.
Perceived adequate pay would further strengthen the active force
belief in the military institution.
Basic Allowance for Subsistence (BAS).--The criteria for adjusting
BAS has waffled over the years with implementation of concepts related
to a 1 percent annual increase, to criteria related to the consumer
index of food cost, to the amount of the annual military COLA.
NMVA recommends that BAS and all other special allowances be
adjusted by the annual percentage in the COLA for federal pay.
Basic Allowance for Housing (BAH).--NMVA has watched the roller
coaster like adjustment of BAH over the past few years as regional
adjustments were envisioned based on survey data that would have
negatively impacted military families living on the civilian economy.
NMVA applauds the leadership of the United States Congress and the
Department of Defense for reviewing the matter and making the changes
necessary to decrease further personal financial loss by military
members for housing.
The Alliance urges this Subcommittee to support the Secretary of
Defense in adjustment to the BAH. NMVA remains concerned about the
inequity in BAH that causes military members living in the civilian
sector an additional out-of-pocket expense that approaches 20 percent
of their BAH. Those assigned to government housing do not have this
type of out-of-pocket expense and in the judgment of NMVA neither
should those not provided government housing.

RESERVE AND GUARD FORCES

NMVA has aligned concerns specifically related to Reserve and Guard
Forces as a current force issue in recognition of their respected role
in America's military force.

Pay Equity
NMVA strongly supports the concept of pay equity for members of the
Reserve and Guard and would ask for top to bottom look to achieve pay
parity.
Flight Pay for Reserve Component Air Crews:
Members of the active component and Reserve both are entitled to
flight pay. A Reserve Tanker crew is awarded flight pay for each day of
service monthly whereas an active duty tactical crew meets a prescribed
number of flights and is awarded an entire month's flight pay. NMVA
deplores this inequity.

Thrift Savings Plan (TSP):
Reserve and Guard Personnel were included in the TSP but at a
different participation rate strategy than their active duty
counterparts. First, the TSP program enacted authorized a service
charge different for federal employees (6 percent), active duty (1.5
percent) and reserve personnel (8.4 percent). Also at issue is the
authorized reserve member's contribution is limited to 5 percent of
their monthly reserve earnings, as opposed to the active duty
participation rate of 5 percent of annual salary. The average reservist
earns approximately $400.00 monthly which would allow a $20.00
contribution to the TSP. The Alliance considers this amount for a TSP
to be absurd
NMVA recommends that the service charge for active and Reserve
component personnel be 1.5 percent. Further that reservists be
authorized to contribute up to 5 percent of what would be their active
duty annual salary.

Heroism Pay for Guard and Reserve:
NMVA will continue to press for the authorized 10 percent benefit
for certain enlisted people in the Guard and Reserve credited with
extraordinary heroism (Section 3991, Computation of Retired Pay (a)(2),
Title 10. There are two cases that illustrate the inequity:
First, an active person qualifying for heroism retirement pay loses
it if transferred to the Guard or Reserve. Second, a reservist called
to active duty performs with valor and qualifies for the heroism pay
loses the heroism pay when returned to the Guard or Reserve.
NMVA does not believe that the percentage or amount of heroism pay
is adequate for any qualifying act of valor for which the payment may
be authorized, and secondly is appalled that this benefit is not
authorized for members of the Guard and Reserve.

Single Rate Basic Allowance for Housing:
Reservists performing active duty tours, for other than declared
contingency operations, when billeted in government quarters and have
no dependents, are not entitled to BAH. These individuals tend to be
older and own homes in their own right and have mortgage payments to
make or rental agreements to honor. Conversely, Reservists performing
comparable active duty tours with similar billeting and whose
dependents are prevented from occupying those quarters is entitled to
BAH.
NMVA strongly believes that reservists performing any type of
active duty, who are billeted in government quarters and who have
mortgage or rental obligations should be entitled to BAH. BAH would be
a career incentive and have retention value thereby reducing personnel
losses due to a career disincentive.

MILITARY HEALTH SYSTEM FUNDING

Adequate Funding:
Members of the National Military and Veterans Alliance continue to
voice strong concern that adequate funds are not available for either:
--The Military Health System
--TRICARE
--TRICARE FOR LIFE for military retirees and their eligible
beneficiaries
--TRICARE Senior Pharmacy Program
The fact simply stated is that insufficient funds have been
appropriated for the health care delivery systems implemented for all
DOD beneficiaries.
DOD health leaders have acknowledged a short fall of an estimated
$1.4 Billion in the current budget year. The Alliance is concerned that
the short fall may well and substantially exceeds the DOD projection.
TRICARE FOR LIFE: Restoration of health benefits for over-65
retirees and their beneficiaries effective October 1, 2001 had limited
startup funds available AND WAS NOT FULLY funded for fiscal year 2002.
Retirees are lining up to use this restored benefit. In fact, if the
participation rate in TRICARE Senior Pharmacy Program is an indicator
this program may well exceed projections.
TRICARE Senior Pharmacy Program: This program implemented April 1,
2001 was also not fully funded. The Office of the Army Surgeon General
reported recently that in the first 20 (repeat 20) days the cost of
prescription drugs dispensed was over $37 Million. This program has the
potential to be an annual budget buster!
NMVA was also pleased with last year's action to lower the
Catastrophic Cap in the TRICARE. It's noted that fiscal resources were
not to offset costs associated with the reduction.
THE POINT IS CLEAR: NMVA requests that this Subcommittee carefully
scrutinize the costs of all DOD health care delivery systems and ensure
that adequate fiscal resources are available for these health care
programs that both contribute to military readiness and further keep
the promise made to all people who served long and faithful careers.

OTHER HEALTH CARE ISSUES

Medicare Part B Enrollment:
TRICARE for Life required all retirees be enrolled in Medicare Part
B for participation in the program in either the health care or senior
pharmacy program. Alliance members believe that this program should be
a stand-alone health care program, but recognizes, reluctantly, the
imposition of Part B Medicare enrollment. Many senior aged members
retired years ago when it was accepted that they would have access to
military treatment facilities. Consequently, they declined
participation if Medicare Part B when they became eligible for
enrollment. Years later and after significant closures of military
installations and DOD health care facilities, these retirees, many of
whom are in their 70s or older would now have to pay significant
penalties to enroll in Medicare Part B.
NMVA recommends that those who relied on former installations for
health care and were 65 on or before October 6, 2000, the date the
program was enacted by NDAA for fiscal year 2001 should be allowed to
participate in TFL without Part B Medicare enrollment.
DOD Medicare Eligible Retiree Health Care Fund:
The Alliance continues to be intrigued by the structure of the DOD
Health Care Fund and how payments on behalf of beneficiaries will be
worked.
NMVA believes these funds should be vested in the beneficiary and
should be disbursed to the healthcare provider dispensing health care
service.
The Alliance also rejects any concept that military retirees,
disabled or not, would have to choose their primary health care
provider as either the DOD or Department of Veterans Affairs. Such a
choice is not required of any other healthcare beneficiary.

AND LASTLY--CONCURRENT RECEIPT

The NMVA is grateful that this Subcommittee worked to secure the
necessary appropriation to put in place a special pay program for
severely disabled military retirees when it became apparent that
Concurrent Receipt could not be negotiated and implemented.
NMVA supported the special pay for the severely disabled military
retiree with great hesitation. At issue was the need for Concurrent
Receipt to allow military retirees who also have service connected
disabilities to:
--Retain their earned longevity retirement pay from the military.
--Receive their Disability Compensation from the Department of
Veterans Affairs without any offset.
The Alliance recognizes the leadership role of every member of this
Subcommittee and while your not convened as ``authorizers'' have the
ability to actively and aggressively seek resolution to the Concurrent
Receipt issue that impacts all service connected disabled veterans.
It's past time to secure this authorization and the necessary funding
for the program.
The Alliance recognizes a number of entitlement programs, such as
those noted in this statement that were authorized and inadequately
funded and yet other entitlements which had ``appropriations assigned''
pending expected authorization.
NMVA pledges each of you its full support to get Concurrent Receipt
out of its annual casket ride through the halls of Congress and
recorded on the rolls of the 107th Congress as a long overdue program
entitlement.

CONCLUSION

Mr. Chairman and Members of the Committee the Alliance is most
appreciative of the opportunity to present its comments for the record.
By the way, I would also like to thank you for the authorization to
present American Flags to those who retire from military service. The
flags are well received by the retiree and family. You know it's great
to be able to fly your own special American flag while your still
alive. Did you know that NO money was appropriated for the purchase of
these flags? Commanders purchase them out of existing funds, which
means your entitlement offsets dollars appropriated for other programs.
Again, the National Military and Veterans Alliance is most
appreciative to participate in this special hearing.

Senator Stevens. Thank you very much. Give us a little bit
more information about that offset you are talking about about
widows. That does not ring with my memory, but I am happy to
hear about it. I do not have time to talk about it now.
Mr. Mix. Glad to do that, sir.
Senator Stevens. Colonel Partridge.

STATEMENT OF CHARLES C. PARTRIDGE, COLONEL, U.S. ARMY
[RETIRED], NATIONAL ASSOCIATION FOR
UNIFORMED SERVICES

Mr. Partridge. Mr. Chairman, it is a pleasure to be here.
Senator Stevens. Nice to see you again, sir.
Mr. Partridge. I want to take this opportunity to go over
something you said last year and a couple of years before. You
said that you wanted to fund military health care and that if
the authorizers and the Department of Defense would give you a
plan you would fund it. I want to thank you for doing that.
That plan is funded and we know there is more money to be
probably in the supplemental coming up and in the 2002 budget,
and we very much appreciate your support, because if you had
said you would not fund it we would not have had the program.
I would also like to add one point to what Mr. Mix said
concerning the widows, that it is true that a military retiree
buys a survivor benefit plan, but if he dies of a service-
connected disability they offset what the widow's survivor
benefit by the amount of DIC. What they do is they give her the
money back----
Senator Stevens. What is DIC?
Mr. Partridge. Dependents and indemnity compensation that
she gets because of taking care of her husband while he was
ill. It is his--that comes from the Veterans Administration,
but DOD offsets its share when the widow gets that.
Senator Stevens. You give me an amendment to straighten
that out.
Mr. Partridge. We will give you something to straighten it
out.
Mr. Chairman, that concludes my statement.
Senator Stevens. Nice to see you again, Colonel. Thank you
very much.
Mr. Partridge. Thank you.
[The statement follows:]

PREPARED STATEMENT OF CHARLES C. PARTRIDGE

The National Association for Uniformed Services would like to thank
the Committee for its leadership in funding landmark legislation last
year extending the Pharmacy benefit and TRICARE system to Medicare
eligible military retirees, their families and survivors, making the
lifetime benefit permanent, establishing the DOD Medicare Eligible
Retiree Health Care Fund, reducing the catastrophic cap and making
other TRICARE improvements.
Your actions in leading the fight for the Military Health Care
initiative in the National Defense Authorization Act for fiscal year
2001 have restored the faith of millions of military personnel,
retirees and their families. They believe that the nation does indeed
value their service. This legislation also has a readiness impact since
once again retirees can be counted on to recommend military service to
the young men and women of our nation and to aid in the military
services recruiting and retention efforts. In addition, the changes,
when implemented will result in improved satisfaction of those
currently serving.
Enacting the TRICARE For Life (TFL) legislation provides the
authority for the government to keep the promise of healthcare for life
to the men and women of the Uniformed Services who dedicated their
lives in service to our country.
The Assistant Secretary of Defense (Health Affairs) and the TRICARE
Management Activity have set up working level and senior level panels
that include representatives of the Associations and the retiree
Community, to develop the program and work out problems. It is clear
that the policy makers and those charged with execution of the TRICARE
For Life Program and the Pharmacy benefit are working hard to design an
excellent medical program. In fact, they are glad to be involved in the
process of rebuilding the military health system rather than continuing
down the path of deeper funding and personnel reductions. The DOD
Health Affairs Team has established an unparalleled working partnership
with us as they implement the Pharmacy and TRICARE for Life
legislation. As this landmark legislation is implemented, we of course
need adequate funding. We also need organizational stability so that
the changes in the Military Health System passed in the National
Defense Authorization Act, for fiscal year 2001 can be put in place as
smoothly as possible and implemented on schedule. All of us who have
gone through the growing pains of TRICARE over the past 10 years do not
want to revisit those turbulent times, particularly at the same time
the Department is implementing the new Pharmacy and TRICARE for Life
benefits.
The effective date of the pharmacy benefit was 1 April 2001 and is
working properly. The full TRICARE FOR LIFE benefit is to be available
1 October 2001. Full funding for both of these programs is needed if
they are to deliver on the high expectations of the retiree community.
Unless the chronic underfunding of the Military Health System is
corrected, the TRICARE for Life program will be built on sand and the
entire program will be unsatisfactory and a disappointment to everyone.
The attached chart (Exhibit A) graphically displays the
longstanding underfunding of the Military Health system. By every
measure, military health care has been short changed over the past six
years. The result has been many complaints surrounding the TRICARE
system, the deterioration of the Military Treatment Facilities physical
plant and inability to purchase up to date medical equipment.
DOD faces the difficult challenge of implementing an entitlement
program and paying for it from the discretionary portion of their
budget--both in fiscal year 2001 and in fiscal year 2002 until the
Department of Defense Medicare-Eligible Retiree Health Care Fund
becomes effective on 1 October 2002.
We know that you support additional funds for military health care
this year and adding this to the baseline for fiscal year 2002. You
have often said that if DOD and the Authorizing Committees will define
the health care program and tell you what is needed, you will fund it.
That has finally happened and we want to thank you for supporting
additional funding in the Budget Resolution for military health care.
We know that you will see that it is included in the Defense
Appropriation as well.

TRICARE PRIME AND TRICARE SENIOR PRIME

We understand and support the decision to implement the TRICARE for
Life Medicare supplemental on 1 October 2001, and then determine how
TRICARE Prime for seniors will be implemented and the future of TRICARE
Senior Prime. We are pleased that even if DOD and the Health Care
Financing Administration cannot reach agreement on Medicare
reimbursement DOD will continue the TRICARE Senior Prime program at the
demonstration sites for those currently enrolled and those in TRICARE
Prime. This is reassuring to retirees enrolled in the program that
commitments made will be honored.
Medicare Part B Enrollment
The law enacting the TRICARE for Life program requires Medicare
Part B enrollment for participation in the TRICARE for Life program. In
addition, Part B is required for all retirees reaching age 65 on or
after 1 April 2001, for them to participate in the new pharmacy
program. Although we believe in the principle that the military benefit
should stand-alone and not require Part B participation, the Part B
will save the TFL program funds. However, we believe requiring Part B
for participation in the pharmacy program does not result in
significant savings and creates a hardship for some beneficiaries, and
it should be eliminated. In addition, some 12,000 retirees residing
overseas are required to participate in Part B Medicare in order to
enroll in TRICARE for Life. Since they cannot use the Medicare benefits
overseas we recommend that this requirement be eliminated for all
retirees residing overseas.
Some retirees who lived near military installations did not enroll
in Part B because they believed they would receive care at the
hospitals and clinics located on the military bases, which subsequently
closed. Many are in their 70's and 80's now and to enroll would require
them to pay huge penalties.
We recommend that those who relied on these hospitals and were 65
on or before 6 October 2000, the date enacted by NDAA for fiscal year
2001, should be allowed to participate in TFL without enrolling in Part
B Medicare.

FEHBP

The NMVA supported legislation last year that would provide
military personnel the option of participating in the Federal Employees
Health Benefit Program. Currently, a bill introduced in the 107th
Congress, HR 179, would provide that option. In addition, DOD is
conducting a demonstration project authorized in 1999 that would allow
up to 66,000 Medicare eligible beneficiaries to participate in FEHBP at
up to 10 sites. The demonstration ends on 31 December 2002. As of 26
February, there are 7,588 participants. The program is very popular in
Puerto Rico with over 2,700 participants. Many organizations in the
NMVA believe that FEHBP should be an option for all uniformed service
beneficiaries. We are confident that the TRICARE program and the
TRICARE for Life program will be successful. Further, because they are
an outstanding value for most beneficiaries, they will be the health
plans of choice. However, in a few cases, the TRICARE/TRICARE for Life
options may not be the best choice, or may not be available; and for
that reason, we believe the FEHBP option should be enacted. Certainly
the FEHBP demonstration should be extended at least until 2005, and the
geographical limits removed. Further, those who are currently enrolled
should be allowed to remain in the program for as long as they wish.
Providing the FEHBP as an option would help stabilize the TRICARE
program, provide a market based benchmark for cost comparison and be
available to those for whom TRICARE/TRICARE for Life is not an adequate
solution.

CLAIMS PROCESSING

Most Medicare eligible military retirees because of lack of access
to MTFs, have used the Medicare system and are happy with the claims
process. The Medicare provider files the claim with Medicare, who pays
the Medicare portion of the claim, forwards the claim to the second
payer, the Medigap insurance company, and forwards an Explanation of
Benefits to the patient. The Medigap insurer pays the claim and
notifies the beneficiary that the claim is paid or that some co-pay or
deductible is due. The system is fast, efficient and understandable. It
is essential that the TFL process work just as well and that the
providers are satisfied. Otherwise, doctors, many of whom are reluctant
participants in Medicare and TRICARE will be unwilling to accept TFL
beneficiaries. We have discussed this in the working level panels and
know that all are interested in making this work efficiently as well.
This is, however, an area of concern that we will continue to monitor
and if legislation is needed we will seek your support.
DOD/VA Beneficiaries
The VA portion of the President's Budget submission indicated that
the Administration proposes that military retirees be required to
select either DOD or VA as their health care provider. This would make
retirees second-class citizens denying them VA care or forcing them to
give up their military health care benefit. This test is not applied to
other citizens and NMVA strongly opposes it. Since VA provides
treatment of service connected disabilities free of charge, the
military retiree who obtained most care through the military TRICARE
system would be required to pay for services previously provided by the
VA at no cost. We urge this subcommittee to oppose the proposal.

THE DOD MEDICARE ELIGIBLE RETIREE HEALTH CARE FUND

NMVA is most interested in the design of the DOD Health Care Fund
and how the payments will be made.
NMVA believes that these funds should be ``vested'' in the
beneficiary. If the beneficiary uses the MTF, then the funds should be
paid to the MTF. Likewise, if the beneficiary uses other providers,
then that is where the payment should be made. We believe decisions
regarding the Health Care Fund can be critical to the success of the
TFL program and to the quality of the Military Health System.

SUMMARY

Mr. Chairman and distinguished members of the Committee, we want to
thank you for your leadership on military health care last year and for
holding these hearings on implementation this year. You have made it
clear that military health care continues to be a high priority and you
have our support in seeing successful implementation of these health
care initiatives this year.

Senator Stevens. Mr. Hanson.
STATEMENT OF MARSHALL HANSON, DIRECTOR OF LEGISLATION,
NAVAL RESERVE ASSOCIATION
Mr. Hanson. We would like to express our deepest
appreciation to your subcommittee for your efforts over the
last few fiscal years. During times when the footfalls of the
military seemed precarious because of DOD's end strength cuts
and recommended budget reductions, Congress and this committee
provided direction through plus-ups to the recommended defense
appropriation.
Coming to the defense of the armed services, you seized the
initiative and provided needed improvements. Unfortunately, we
may again be facing similar times. The military associations
share with you the same frustration of not knowing what DOD is
going to budget, and speculation is rampant contemplating
additional end strength cuts.
As we wait for military transformation, the Naval Reserve
Association is concerned that--pardon me. As we wait for an
update to the defense budget, the armed services in general and
the Navy in particular are challenged at sustaining current
readiness operations. There is no doubt in my mind that
procurement accounts are very tempting targets for
reprogramming actions within the Navy and DOD.
We are concerned over the future structure of the Naval
Reserve because of its equipment, ships and aircraft on the
average being older than that of the active force. With a
Future Years Defense Plan (FYDP) that does not come close to
making the procurement needs for the fleet, the Naval Reserve
requirements for the most part fall off the table.
We worry for the future structure of the Naval Reserve
because of the possibility that portions of it may become the
billpayer to balance the budget. There is no doubt in my mind
that there are some people in the Navy who have their sights on
the Naval Reserve hardware units. Redistribution of a reserve
P-3 patrol wing, a reserve carrier air wing, a reserve CB
battalion, or a reserve cargo handling battalion would be an
undesirable way to balance the Navy budget.
Personnel accounts can also prove too tempting. Reducing
reserve budgets could provide easy money for the active force,
but this would not be the first time the baby was thrown out
with the bath water. As we watch this all unfold, we ask you to
be sensitive and inquiring when you take future testimony.
The Naval Reserve Association looks upon the Naval Reserve
as an insurance policy. The Navy invests about 3 percent of its
total obligation authority into the resources and people of its
reserve. For this investment it has a force that can be surged
with trained personnel and ready equipment. The active force
gets a further dividend on this investment by using these same
reservists on a day to day basis as a temporary labor pool.
But when funding gets tight, the Navy is no different than
you or I. It will seriously consider cancelling this insurance
policy.
Our country embarked on its democratic course as a direct
result of the militia reserve. The Guard and Reserve have made
significant contributions in both world wars and more recently
conflicts. The Reserve component is engaged today in day to day
operations like no other time in history. The Guard and Reserve
needs equipment and aircraft to continue to attract young
Americans and also ensure that we are ready at a time of crisis
or national need.
In our written testimony we provide the subcommittee with
an optimal list of unfunded equipment and programs needed by
the Naval Reserve. While budget constraints will not permit
everything, it is requested that elements of this list should
be given serious consideration. Equipment procurement is not
only an investment, it is also an endorsement to the troops for
a job well done.
Thank you.
Senator Stevens. Thank you very much. We will read the
list, I promise you.
[The statement follows:]

PREPARED STATEMENT OF MARSHALL HANSON

INTRODUCTION

On behalf of more than 86,000 active Naval Reservists, we would
like to express our deepest appreciation to each of you for your
efforts over the last couple of fiscal years. During times when the
pathway for the military seemed dubious because of DOD end-strength
cuts and recommended budget reduction, Congress and this committee
provided direction through plus-ups to the recommended defense
appropriation. Coming to the defense of the Armed Forces, you seized
the initiative and wrought needed improvements.
Unfortunately, the military, the Navy and the Naval Reserve can't
rest with just the successes of the past.
It appears that the new administration has embarked on reshaping
the Armed Forces without first establishing a new national security
strategy, and then opening it to debate. The Naval Reserve Association
is concerned that while we wait on a supplemental to the Defense
Budget, the Armed Services in general, and the Navy in particular, are
challenged at sustaining current readiness and operations with rising
operations and support costs associated with aging equipment, aircraft
and ships. There is no doubt in my mind that procurement accounts are
very tempting targets for reprogramming action within Navy and DOD as
they have been in the past. Rumors abound, that the inward, downward
spiral set into motion by a decade of DOD cuts continues unabated and
that should cause all of us concern for the future.
We are also concerned over the future structure of the Naval
Reserve Force because its equipment, ships and aircraft are, on
average, older than the active force. With a FYDP that doesn't come
close to meeting the procurement needs for equipment, ships and
aircraft, the Naval Reserve requirements for the most part fall off the
table. We cannot count on the once robust National Guard and Reserve
Equipment (NGRE) Allowance to level the playing field, and last year's
$5 million appropriation barely scratched the surface of need. If it
were not for the actions of Congress, the Naval Reserve would not have
received its sixth C-40A aircraft. These new aircraft will replace the
aging C-9 fleet that today is operating aircraft that are older than
the Air Alaska flight that fell from the skies off of California last
year. The first C-40A was delivered to the Naval Reserve in April.
We also have concerns for the future structure of the Naval Reserve
Force because of the possibility that portions of it may become the
``bill payer'' to balance the budget for submission. There is no doubt
in my mind that today there are ``smart'' people in the Navy who have
their sights on Naval Reserve hardware units. Redistribution of a
Reserve P-3 Patrol Wing, a Reserve Carrier Air Wing, a Reserve Seabee
Battalion, or a Reserve Cargo Handling Battalion would be a way to
balance the Navy budget. Personnel accounts could also prove too
tempting. It would not be the first time that the baby was thrown out
with the bath water. As we watch this all unfold, we ask you to be
sensitive and inquiring when you take future testimony.
We look upon the Naval Reserve as an insurance policy. The Navy
invests about three percent of its total obligation authority into the
resources and people of its Reserve, and for this investment it has a
Force that can be surged with trained personnel and ready equipment. In
the process it gets a dividend on its investment by using this very
Force in day-to-day operations as a temporary labor pool. When funding
gets tight the Navy is no different than you or I--it will seriously
consider canceling that insurance policy. We need to be sensitive and
inquiring about this as well.
Our country embarked on its democratic course as a direct result of
militia forces. The Guard and Reserve have made significant
contributions in both World Wars and more recent conflicts. The Guard
and Reserve is engaged today in day-to-day operations like no other
time in history. The Guard and Reserve needs equipment, aircraft and
ships to not only continue to attract young Americans to serve, but
also to ensure that we have what is required in time of national need.
Details of specific requirements have been included in this
written.
anticipated fiscal year 2002 unfunded requirements readiness shortfalls
RPN:
Funding for Boot Camp and ``A'' Schools for Non Prior Service (NPS)
personnel who are directly recruited into the USNR.
Non-Prior Service (NPS) Bonus ($2.4 million).--This required
funding would allow the Naval Reserve to implement the enlisted NPS
bonus program, which is authorized by 37 USC 308c. As the Naval Reserve
increasingly relies on the accession of NPS personnel, it is taking
steps to increase recruiting goals that may not be achievable without
these additional incentives. This is essential in order for Naval
Reserve to be competitive among the services.
Individual Protective Equipment procurement is needed to train and
outfit reservists who will be going to a theater location where a
threat of biological or chemical agents could be possible. Currently,
while active duty members have equipment reservists are sent w/o
protection. (e.g. Korea)
Annual Training (AT).--Continued funding to permit the (14) days
A.T. as outlined by law, and (17) days for OUTCONUS, plus (2) days
travel.
Inactive Duty Training Travel (IDTT).--This is the primary vehicle
which Naval Reservists travel to their gaining commands to perform high
priority work meeting peacetime contributory support requirements and
perform training required by Navy training plans. IDTT is used to
provide airlift support missions, operational missions, aviation
proficiency skills training, refresher skills training, exercises, and
training at mobilization sites. Funding should support a minimum of two
visits per year.
Active Duty for Training (ADT-FLEET SUPPORT).--CINC requirements
are greater than available funding. This will allow for greater direct
and indirect support for CINC requirements. It will allow Commander
Naval Reserve to increase the amount of peacetime contributory support
that can be provided to gaining commands for exercises, mission
support, conferences, exercise preparations, and unit conversion
training.

Recruiting Shortfalls
Reserve Recruiter Support & Advertising.--Aggressive national
recruiting advertising campaigns needs to be maintained. Advertising
campaign includes media and market research, and placement of
advertising in television, print, radio, direct mail, and public
service announcements. Funding should also provide for additional
recruiting support, which would allow the NR to build its recruiters
force to a total of 90.

OMNR
Reserve Ship Depot Maintenance.--Includes deferred maintenance to
meet guidance levels.
Reserve Base Support, Real Property Maintenance.--Funds are needed
to arrest growth of critical backlog and hold such backlog at fiscal
year 2001 level. Most of the buildings were built back in the 1940s/
50s. Additional funds are need for collateral equipment furnishings and
vehicles to complete MILCON projects.
--RPM funding is need for demolition in RESFOR projects.
continuing naval reserve modernization requirements
The C-40 aircraft procurement is needed to replace the aging C-9
fleet. The Naval Reserve is the logistic airlift for the Navy. The
Department of the Navy has a fleet of (28) C-9's needing replacement.
The first twelve aircraft were purchased used from commercial airlines,
and are older than the Air Alaska airframe that crashed off of
California. Others are from the same manufacturing lot as the ill fated
Air Alaska aircraft. While inspected, air safety is still an ongoing
concern.
With six C-40's already authorized the Navy tried to sell its first
C-9 aircraft, and was only offered $200,000. Obviously, the commercial
airline industry views these airframes as fully depreciated. Besides
age, these aircraft are handicapped by noise and exhaust pollution. The
sooner we replace C-9's, the less we will have to spend on C-9
upgrades.
The other argument for accelerated C-40 procurement is business-
oriented. The aircraft is a cargo combo Boeing 737-700 with 800 style
wings, providing an aircraft with more effective lift, and longer
range. To buy single planes every other year maximizes the price.
Further, the production line, with this model, will be run for only for
eight to ten years, before Boeing changes model design. Extending the
purchases of 737 cargo-combo model over a longer time horizon will mean
mixing models. This will complicate ground support and aircrew
training, and will also increase costs. With an extended procurement
timeline the Navy may be forced to seek 737-700s from the used market,
with a high cost of conversion to cargo-combo, and with a reduced
airlift and range. The conversion cost might exceed the original
purchase price.
An optimum solution would be purchasing three aircraft each year,
over the next seven years. In the long run it will save money. With a
larger order, Boeing will discount the price, and we would also have
model consistency.
Money is also being requested for the CNRF Information Technology
Infrastructure (IT-21). Different from the Navy/Marine Internet, this
money would be earmarked to get the Naval Reserve out of the mire of
DOS based systems, upgrading its legacy software. The Naval Standard
Integrated Personnel System (NSIPS) was intended to eliminate the USNR
legacy pay system. Problems arose because this conversion was attempted
within the existing budget, with costs kept on the margin. The overall
cost has ballooned with selected reservists missing pay. The Naval
Reserve learned a hard lesson that upgrades in hardware, memory,
software, data flow, and staffing are needed. This was an exercise that
Corporate America has already learned, you can't upgrade computers on
the cheap.
Funding is needed for the Naval Coastal and Expeditionary Warfare
Forces, Seabees and MIUW's to provide CESE, communications, and field
support equipment. Existing equipment is aged, and worn, often being to
commercial specifications, rather than military. Active units for
deployment overseas have borrowed some of this equipment. Naval Coastal
Warfare is growing in importance with the Navy's focus on littoral
operations. Home Defense multiplies the importance. Newer equipment
needs to be procured in an ongoing schedule to be able to upgrade unit
readiness.
Littoral Surveillance System, one is required per year for
regional/port surveillance. This equipment has the capability to assist
in waterside security of afloat units.
Also needed are P-3 Upgrades. The Naval Reserve P-3 aircraft and
avionics are not as updated as those being flown by active duty are. A
commonality with active P-3C UDIII squadrons must be achieved to help
maintain the Total Force. Missions for the Lockheed P-3 Orion are being
expanded to include counter drug counter drug capabilities, and ESM.
Upgrading the Naval Reserve F/A-18A with precision guided munitions
capability is a requirement. With greater emphasis being placed on
combat support and precision combat air strikes, there is a requirement
to upgrade USNR capabilities to match the active squadrons.
The Naval Reserve needs to modernize the F-5. The F-5 role is as
the Navy's adversarial aircraft. The Naval Reserve operates the only
dedicated adversarial squadron with the mission of preparing the Navy's
tactical pilots prior to deployment. The F-5 is twenty-five years old.
Without upgrades in avionics, navigation, and radar detection, a keen
edged adversarial performance can not be maintained and our deploying
pilots would be less well trained.
The Naval Reserve has acquired C-130's over numerous budget years.
Cockpit configurations differ between airframes. Funding is needed to
standardize cockpit configuration of all NR/MCR C-130 T aircraft.
Upgrades for USNR helicopter forces will provide funding for
infrared FLIR kits.
Aircrew training is an ongoing requirement. Reduced air hours
prevent in-flight training. Computer based training to support
maintenance and aircrew training.

Projected costs of unfunded equipment and training requirements

[In millions of dollars]

Airlift, C-40A Transport Aircraft (3), replacing aging C-9
aircraft......................................................181.00
ADT, Fleet support funding to meet CINC requirements.............. 13.10
Base Operation Support, collateral equipment furnishings and
vehicles to complete MILCON projects.......................... 6.40
Coastal/Expeditionary Warfare, upgrade equipment for CB/ELSF/NCW
units......................................................... 35.10
CBT, Computer Based Training, to train maintenance/aircrew on NR
logistics aircraft............................................ 7.30
C-130T Avionics Modernization, to standardize cockpit
configurations of all N&MCR aircraft.......................... 2.35
Increase C-130T Depot Level Maintenance Funding, funding for (5)
aircraft not currently funded................................. 1.50
C-9 Upgrades, to maintain and improve an aging C-9 Fleet.......... 1.40
FLIR Kits (AAS-51Q) for SH-60B, procure forward looking infrared.. 7.00
Funding for Boot Camp and ``A'' Schools for NPS Personnel per year
recruited directly into USNR..................................170.00
F/A-18 Mod, ECP 560, upgrade Reserve F/A-18A precision munitions
capability (6) aircraft....................................... 36.60
F-5 Global Positioning System, procure for fleet by fiscal year
2005.......................................................... 8.10
F-5 Avionics Modernization, upgrading the 25 year old F-5 package
for 12 aircraft............................................... 47.00
F-5 Radar Upgrade, replace existing radars........................ 3.73
Individual Protective Equipment, to procure IPE and train units in
gear required for CINC tasking................................ 3.40
IT CNRF Infrastructure, upgrade network infrastructure not
included in NMCI.............................................. 17.00
IT Legacy, Reserve sustainment, funding required to operate legacy
IT systems at minimal levels.................................. 6.00
IT Reserve Modernization, upgrading existing legacy systems to
perform enhanced & new functions.............................. 8.60
Littoral Surveillance System, procuring (1) system for year for
regional/port surveillance.................................... 30.00
NMCI, Naval Marine Corps Intranet, expanding system to SELRES and
TAR personnel................................................. 45.00
Non Prior Service Enlistment Bonus, implementing NPS bonus program
to compete with other RC's.................................... 2.48
Operational Flight Trainer upgrade/mod, to match current P-3C
configuration................................................. 5.00
P-3C/BMUP Kits, to achieve commonality with Active P-3C UD III
squadrons..................................................... 49.90
P-3C CDU upgrades, to increase counter drug capabilities.......... 3.00
P-3C Synthetic Aperture Radar, (1) aircraft....................... 3.00
P-3C Update III Simulator, Deployable Embedded Tactical Trainer
System Units.................................................. 1.00
P-3C ESM Trainer upgrade, to match upgraded equipment included on
improved aircraft............................................. 4.50
Reserve Ship Depot Maintenance, funds required to meet guidance
levels........................................................ 13.90
Reserve Aircraft Modernization, upgrade various avionics on RN P-
3C's.......................................................... 2.50
RPM, Funds needed to arrest the accumulating growth in Backlog of
Maintenance and Repair........................................ 20.30
RPM Funding for Demolition in RESFOR projects..................... 3.98

Alphabetical listing, not in order of priority.

Senator Stevens. Our next witness is Mr. Wolff--Miss Wolff,
pardon me. Miss Wolff.

STATEMENT OF LIESEL WOLFF, LEGISLATIVE ASSISTANT,
PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS

Ms. Wolff. Good afternoon, Chairman Stevens. My name is
Liesel Wolff and I represent the largest animal rights
organization in the world, PETA, People for the Ethical
Treatment of Animals. Thank you very much for this opportunity
to discuss the use of live animals in food procurement
exercises in military survival skills training. We would like
to request that the subcommittee include report language
stipulating that no Department of Defense funds shall be used
to procure animals for these wasteful and inhumane exercises.
Each year in training courses around the country, American
soldiers are instructed to bludgeon, strangle, or decapitate
chickens, rabbits, goats, sheep, and other animals. Soldiers
sometimes carry the animals in a backpack for several days
before killing them. Alternatively, animals are taken by
vehicle into the woods, where they are let go and then
recaptured. In these cases, the animal must undergo the extreme
stress of disorientation upon being released from confinement
into unknown territory and then the terror if being hunted and
recaptured.
The killing methods used ensure that the animals die in
states of extreme pain and fright. One Army manual says: ``You
can club small animals or step on them.'' Another Army manual
instructs soldiers to kill a chicken ``by placing its head
under a strong stick, placing both your feet on either side of
the stick, and pulling vigorously until its head is pulled
off.'' Other reports indicate that animals are bludgeoned by
hand or with a blunt instrument. All of these deaths are slow
and agonizing.
Moreover, training soldiers to kill animals diverts time
and resources away from teaching more valuable survival skills.
Will Anderson is a former Air Force sergeant who taught
survival skills for 3 years at Fairchild Air Force Base. Part
of that training included killing rabbits and butchering them.
Sergeant Anderson now strongly objects to these exercises,
calling them ``completely unnecessary.''
PETA has also heard from active and retired military
personnel from around the country who have written to express
this same sentiment. According to Sergeant Anderson and other
officers from whom we have heard, teaching soldiers to kill
animals does nothing to increase their ability to survive and
diverts time and resources away from teaching the truly
important skills for survival, namely how to find shelter, how
to obtain drinkable water, and how to identify edible plants.
Additionally, because it is a time and calorie-consuming
activity that requires travel, hunting an animal would be
unwise in most survival situations.
Finally, it is pointless for a soldier to practice killing
docile animals, considering that in a real survival situation
few soldiers would have trouble doing so if survival truly
depended on it. After all, soldiers do not practice killing
other humans in order to be effective in combat situations.
Several cancellations have shown that killing animals is
not considered necessary. In 1999, PETA wrote to now-former
Major General Leo Baxter, who was then commanding General at
Fort Sill, Oklahoma. He responded that a proposed survival
skills exercise involving live animals was not approved and
that ``we are in complete agreement that there is no need to
utilize live animals for realistic survival skills training.''
After PETA and members of the public expressed their
objections, the Maryland Army National Guard cancelled their
plans to use live animals in the training exercises conducted
on June 24th and 25th of last year. The Massachusetts Army
National Guard 26th Infantry Brigade has permanently eliminated
the use of live animals in their curriculum.
To summarize, please include report language stipulating
that no funds for the Department of Defense shall be used to
purchase animals for military survival skills training.
Thank you very much for your time and I hope you will
consider this step to prevent needless suffering.
Senator Stevens. Thank you very much.
[The statement follows:]

PREPARED STATEMENT OF LIESEL WOLFF

Chairman Stevens and Members of the Subcommittee, people for the
Ethical Treatment of Animals (PETA) is the world's largest animal
rights organization, with more than 700,000 members. We greatly
appreciate this opportunity to submit testimony regarding fiscal year
2002 appropriations for the Department of Defense. My testimony will
focus on the inhumane and wasteful use of live animals in military
survival skills training.
We would like to request that the subcommittee include report
language ensuring that no funds are used for the needless use of
animals for emergency food procurement exercises in survival skills
training.
Each year, American soldiers are instructed to bludgeon, strangle,
or decapitate chickens, rabbits, goats, sheep, ducks, turtles, and
snakes with their bare hands, rocks, or blunt instruments.
In 1998, the Air Force killed more rabbits in its survival skills
courses than did the entire Department of Defense in all its own
research facilities combined. Fairchild Air Force Base in Washington
and the United States Air Force Academy alone use more than 1,600
rabbits each year at an average cost of more than $10,000. Many
thousands of animals are used every year in other training courses
around the country.

Training soldiers to kill animals diverts time and resources away from
teaching more valuable survival skills
Will Anderson is a former Air Force Sergeant who taught survival in
both classroom and field settings for three years at Fairchild Air
Force Base. Part of that training included killing rabbits and
butchering them. Sgt. Anderson now strongly objects to these exercises,
calling them ``wholly unnecessary.''
According to Sgt. Anderson, unlike shelter and water, food is not a
survival issue and does not become one for two to three weeks. Anderson
has stated that killing domestic animals does nothing to increase a
soldier's ability to survive, and diverts time and resources away from
teaching the truly important skills needed for survival, namely, how to
find shelter, how to obtain drinkable water, and how to identify edible
plants.
This was illustrated by Air Force Captain Scott O'Grady, who was
shot down over Bosnia in 1995. Captain O'Grady subsisted for 6 days in
harsh conditions on plants and water. In 1999, a hiker made national
news by surviving for six weeks in the desert by eating plants and
finding reliable sources of water.
A soldier is very unlikely to find domestic rabbits or chickens in
a jungle, desert, or wherever he or she is stranded. Additional
considerations are that hunting an animal would attract unwanted
attention if the person is in hostile territory. Also, hunting is a
time and calorie-consuming activity that requires travel, which is
unwise in most survival situations.
Finally, it is pointless for a soldier to practice killing docile
animals, considering that in a real survival situation, few would have
trouble doing so if survival truly depended on it. After all, soldiers
do not practice killing other humans in order to be effective in combat
situations.

The exercises cause pain and suffering
Soldiers sometimes carry their own animals in a backpack for
several days before killing them. Being crammed in a backpack for days
on end denies the animal the ability to make any normal postural
adjustments, or even to stretch a limb, much less have any protection
from being crushed or pounded by the weight of the pack and the
constant jarring of the soldier's stride.
Alternatively, animals are taken by vehicle into the woods where
they are let go and then ``recaptured.''
In both cases, the animal must undergo the extreme stress of
disorientation upon being released from confinement into unfamiliar
territory and then the terror of being hunted and recaptured.
The killing methods used ensure that the animals die in states of
extreme fright and pain. One Army course manual says ``you can club
small mammals or step on them.'' Another Army manual instructs soldiers
to kill a chicken ``by placing its head under a strong stick, placing
both your feet on either end of the stick--and pulling vigorously until
its head is pulled off.'' Other reports indicate that animals are
bludgeoned by hand or with a blunt instrument. All of these deaths are
slow and agonizing.

Several cancellations prove that killing animals is not considered
necessary
In 1999, PETA wrote to (now former) Major General Leo J. Baxter,
who was then commanding general at Fort Sill, Okla., who responded that
a proposed survival skills exercise involving live animals was not
approved and that ``we are in complete agreement that there is no need
to utilize live animals for realistic survival skills training.''
Last year, after PETA and members of the public expressed their
outrage, the Maryland Army National Guard cancelled their plans to use
live animals in the training exercises conducted on June 24 and 25,
2000.
The Massachusetts Army National Guard, 26th Infantry Brigade, has
permanently eliminated the use of live animals from their curriculum.
These cancellations are further proof that effective survival
skills training does not need to include the use of live animals.

SUMMARY

Thousands of animals suffer needlessly in these pointless exercises
at the expense of American taxpayers. We request that the subcommittee
help end this cruel practice by including report language that
specifically prohibits such animal use. Please include the following
phrase in the report accompanying the fiscal year 2002 Department of
Defense appropriations bill: ``No funds for the Department of Defense
in fiscal year 2002 shall be used to purchase animals for military
survival skills training.''
Thank you for your consideration of our request.

Senator Stevens. Dr. Cunnion.

STATEMENT OF STEPHEN O. CUNNION, M.D., CAPTAIN, U.S.
NAVY [RETIRED], GLAXOSMITHKLINE

Dr. Cunnion. Hello. I am Dr. Steven Cunnion, retired Navy
Captain. I have been involved with hepatitis B research for
most of my medical career. Starting in 1970 as an Army medic, I
cared for Vietnamese who had liver cirrhosis and cancers caused
by this virus. My first research project in the military was a
study of hepatitis B among sailors and marines in the Pacific
fleet. Later when I was Director of Preventive Medicine and
Occupational Health for the Navy, I was involved in writing the
Navy's policy on hepatitis B and became well aware of many of
the competing priorities within the DOD's health care budget.
I thank you for the opportunity to testify today to support
funding for immunizing recruits against hepatitis B. Let me
summarize the risks posed by hepatitis B and state the current
recommendations. Hepatitis B is a serious, sometimes fatal,
blood-borne disease that poses a special risk to our military.
As in the case of HIV, hepatitis B is transmitted through
contact with contaminated blood of bodily fluids. Because of
this, our troops are especially susceptible, not only during
wartime, when bodily fluids are splattered everywhere, but also
during other than war operations, where hundreds of thousands
of refugees may come in close contact with our personnel.
Although hepatitis B is often thought of as a sexually
transmitted disease, it can be acquired in an occupational
setting, such as aboard ship or on bivouac when troops share
razors and other personal gear. When overseas, our forces are
highly exposed if they become involved in an accident requiring
a local blood transfusion or involved in sexual activities or
get a haircut or a manicure, or even go down to the local
tattoo parlor.
Hepatitis B is about 100 times more contagious than HIV.
Worldwide there have been at least 400 million people who can
transmit this disease. During my hepatitis B study in the
Pacific, one in every 100 persons became infected in just a 6-
month time frame.
The symptoms of hepatitis B may vary, ranging from
asymptomatic to long-term disabling fatigue. It causes 11,000
hospitalizations and kills 3 to 4,000 Americans each year.
Worldwide the death toll is about one million people.
Not only can hepatitis B be deadly, it can be also very
costly. In 1991 it was estimated that hepatitis B cost $700
million in medical costs and lost productivity in the United
States alone. Chronic hepatitis B can also lead to costly liver
transplants that numbered over 4,000 in 1997.
It is a challenge to track the true costs of hepatitis B
acquired in the military since liver failure does not occur
until 20 or more years after the initial infection. This is why
our military health care system spends relatively little for
treatment. The VA and Medicare end up paying for most of the
hepatitis B's costly sequelae.
The point really is these symptoms, deaths, medical costs,
and lost productivity are all preventable through the use of a
highly effective vaccine. In 1991 the National Advisory
Committee on Immunization Practices endorsed a universal
hepatitis B immunization strategy beginning with newborns. The
Centers for Disease Control states anyone under 19 should be
vaccinated. The American College Health Association recommends
hepatitis B immunizations for all entering college students. If
we find it important to protect our college students, should
not our military recruits deserve the same?
Twelve years ago the Armed Forces Epidemiological Board
recommended that hepatitis B immunizations become part of the
basic immunizations for all our military personnel. Frequent
international travel, often at a moment's notice, to countries
where hepatitis B is highly prevalent puts our military
personnel in harm's way unless they are vaccinated beforehand.
Although recent studies on military populations have shown
that the rate of hepatitis B is declining, the military rate
still exceeds that of a comparable civilian population.
The Centers for Disease Control and the World Health
Organization (WHO) recommend vaccination for high risk groups.
These groups include all health care workers, sexually active
individuals, travelers who need medical or dental procedures
while abroad, and international travelers spending more than 6
months in endemic areas, such as Southeast Asia, Africa,
Eastern Mediterranean, Eastern Europe, and the Pacific Islands.
These categories describe our military personnel exactly.
While the service has implemented these high-risk group
immunizations for health care workers and some travelers, broad
protection of all recruits has not been feasible due to the
lack of dedicated funding. Mandating vaccinations without
ensuring dedicated funding for this immunization at a time of
other competing needs will not get this job done.
The Hippocratic Oath states: ``First, do no harm.'' Failure
to routinely protect our newest military personnel against
hepatitis B, a protection that is increasingly recommended for
the civilian population who is at much lower risk than our
military, must be addressed. The $12 million requested
appropriation for hepatitis B immunizations for recruits to
protect them from this preventable disease is simply the right
thing to do. I urge your support.
Thank you for the opportunity to speak before you. Thank
you.
[The statement follows:]

PREPARED STATEMENT OF STEVE CUNNION

I'm Doctor Steve Cunnion, and am a retired U.S. Navy Captain and I
have been involved with hepatitis B for most of my medical career.
Starting in 1970, as an Army medic with the 29th Civil Company, I cared
for Vietnamese patients with liver cirrhoses and cancers caused by this
virus. My first large medical research project in the military was a
study determining the infection rate of hepatitis B among sailors and
marines in the Pacific fleet. Later, when I was Director of Preventive
Medicine and Occupational Health for the Navy and Marine Corps, I was
involved in writing the Navy's policy on hepatitis B vaccination and
became well aware of the many competing priorities within DOD's health
care budget to maintain a fit and ready force. I thank you for the
opportunity to testify today to support funding for immunizing recruits
in the Armed Forces against hepatitis B.
Let me summarize the risk posed by hepatitis B to our military
personnel and state the current recommendations concerning hepatitis B
immunization.
Hepatitis B is a serious, sometimes chronic and fatal, bloodborne
disease that poses a special risk to military personnel. As in the case
of HIV, hepatitis B is transmitted through contact with contaminated
blood or bodily fluids. Because of this, our troops are especially
susceptible, not only during wartime exposure when bodily fluids can be
spattered everywhere, but also during ``other than war'' operations
when hundreds of thousands of refugees and displaced persons may come
in close contact with our personnel. Although Hepatitis B is often
thought of as a sexually transmitted disease, it can be transmitted in
industrial occupational settings such as aboard repair ships or in
bivouac conditions where troops shared razors and other personal gear.
When overseas, our forces have a high risk of exposure to hepatitis B
if they get involved in any accident requiring a blood transfusion or
are involved in sexual activity, or get a haircut or manicure or even
go down to the local tattoo parlor.
Hepatitis B is 100 times more contagious than HIV. This disease is
widespread and infects 300,000 Americans annually. One and a quarter
million Americans are chronically infected carriers of the disease.
This disease can infect up to 60 percent of the population on some
islands in the Pacific. Worldwide, there are at least 400 million
carriers of this virus. During my study in the Pacific one of every
hundred persons were infected by the hepatitis B virus in just a six
month period.
The symptoms of hepatitis B vary, ranging from an asymptomatic
infection to long term disabling fatigue. It causes 11,000
hospitalizations and kills four to five thousand Americans each year.
Worldwide, the yearly death toll is one million.
Not only can hepatitis B be deadly, but it is also very costly to
the health care system. In 1991, it was estimated that hepatitis B cost
$700 million in medical costs and lost productivity in the United
States alone. For example, chronic hepatitis B can result in liver
dysfunction that can lead to costly liver transplants which numbered
over 4,000 in 1997.
Ten percent of those with illness develop a smoldering infection
called chronic hepatitis that will take an average of ten years off a
patient's life. This makes it a challenge to track the true costs of
hepatitis B acquired in the military since liver failure doesn't occur
until 20 or more years after the initial infection. This is why there
are relatively small expenditures in the military health care system
for the treatment of hepatitis B among active military personnel.
However, the VA and Medicare end up expending significant resources
treating hepatitis B and its resulting complications in retired
military personnel and veterans.
The point really is: These symptoms, deaths, medical costs and lost
productivity caused by hepatitis B ARE all preventable through the use
of a highly effective vaccine.
Recognizing this fact, since 1991, the National Advisory Committee
on Immunization Practices has endorsed a universal strategy, beginning
with newborns, for hepatitis B vaccination.\1\ Adolescent vaccination
was recommended in 1994. A new Centers for Disease Control brochure
clearly states ``everyone under 19 years old should get vaccinated
against hepatitis B''. This is particularly important because the
highest rate of hepatitis B infection is seen among teenagers and young
adults. Indeed, the American College Health Association recommends
universal immunization against hepatitis B for entering college
students. If we find it important to protect our college students and
their families against hepatitis B, shouldn't our military recruits and
their families deserve the same?
---------------------------------------------------------------------------
\1\ United States Department of Health and Human Services, Public
Health Service, Centers for Disease Control; MMRW, November 22, 1991;
Hepatitis B Virus: A Comprehensive Strategy for Eliminating
Transmission in the United States Through Universal Childhood
Vaccination, Recommendations of the Immunization Practices Advisory
Committee (ACIP).
---------------------------------------------------------------------------
Hepatitis B poses a special risk to military personnel even beyond
those of young adults in the United States who are already recommended
to receive this vaccine. This was reflected 12 years ago by the Armed
Forces Epidemiological Board in its recommendation that ``immunization
against hepatitis B should be planned and become a part of the basic
immunizations of all military personnel.'' \2\ Frequent international
travel, often on a moment's notice, to countries where hepatitis B is
highly prevalent, puts our military personnel in harm's way unless they
are vaccinated beforehand. Although recent studies on military
populations have shown that the overall rate of hepatitis B has been
declining, most likely due to decreased illicit drug use and the
closures of our overseas bases, the military's hepatitis B infection
rate still exceeds those in comparable civilian populations.
---------------------------------------------------------------------------
\2\ AEFB (15-1a) 88-6, October 4, 1988.
---------------------------------------------------------------------------
In addition to routine vaccination for all adolescents and young
adults under age 18, the Centers for Disease Control and the World
Health Organization recommends vaccination against hepatitis B for
high-risk groups. These groups include all health care workers,
sexually active individuals, travelers who may need to undergo medical
or dental procedures while abroad, and international travelers who plan
to spend more than six months in endemic areas, such as southeast Asia,
Africa, the eastern Mediterranean, eastern Europe, and the Pacific
Islands.\3\ These categories describe our military personnel exactly.
---------------------------------------------------------------------------
\3\ United States Centers for Disease Control and Prevention,
Health Information for International Travel, 1999-2000, 100; World
Health Organization International Travel and Health: Vaccination
Requirements and Health Advice, Jan. 1999, 67.
---------------------------------------------------------------------------
While the Services have implemented these ``high risk group''
immunization guidelines for health care workers and some traveling
personnel, broader protection of all recruits has not been feasible due
to a lack of dedicated funding. Mandating vaccination without ensuring
sufficient resources for this immunization at a time of other competing
needs such as expanded retiree care, pharmacy benefits, and TriCare,
WILL NOT get the job done.
The Hippocratic Oath states ``first, do no harm''. Failure to
routinely protect our newest military personnel against hepatitis B, a
protection that has been increasingly recommended over the past decade
for all infants, children and young adults in the United States, MUST
be addressed. Indeed, our military members are at an even much greater
risk. The $12 million requested appropriation for hepatitis B
immunization of recruits to provide protection against this known and
preventable disease is simply ``the right thing'' to do. I urge your
support. Thank you for the opportunity to speak with you today.

ADDITIONAL SUBMITTED STATEMENTS

Senator Stevens. Thank you very much. If there are any
other persons here that wish to submit statements for the
record, they may do so.
[The statements follow:]

PREPARED STATEMENT OF THE UNIVERSITY OF MIAMI

Mr. Chairman, I thank you and the Members of the Subcommittee for
this opportunity to submit testimony today on behalf of the University
of Miami and its Rosenstiel School of Marine and Atmospheric Science.
Founded in 1925, the University of Miami is the largest private
research university in the Southeastern United States and the youngest
of 23 private research universities in the nation that operate both law
and medical schools. Through its 14 colleges and schools, more than
2,300 faculty instruct almost 14,000 undergraduate, graduate, and
professional students in facilities located on four major campuses.
The Rosenstiel School is recognized as one of the premier academic
oceanographic research facilities in the world and ranked among the top
six nationally. The more than 100 recognized scientists, researchers,
and educators at the Rosenstiel School collaborate closely with other
institutions in addressing critical national and regional issues. The
Rosenstiel School has special expertise in remote sensing and it is for
this reason that I appear before you today.
In fiscal year 2000 you provided support to launch the National
Center for Tropical Remote Sensing Applications and Resources. Our
partnership with the Department of Defense has developed and continued.
In fiscal year 2002 we hope to continue our joint efforts to move this
vital project forward. Your small investment in the National Center for
Tropical Remote Sensing Applications and Resources will provide vast
return to the nation.
Synthetic Aperture Radar (SAR) is a powerful remote sensing system,
able to operate in all weather, day or night. Space-based satellite SAR
systems are able to monitor the movement of targets on land or ocean in
near real-time, map topography with unprecedented accuracy, assess
storm and flood damage to urban and rural infrastructure, local forest
and wildfires, and assess the soil properties of farm land (soil
moisture) and health of vegetation. SARs provide data that can be used
to forecast major volcanic eruptions and understand the earthquake
process, and a host of other military, civilian, and scientific
applications. SAR can make a major contribution to Southcom's various
missions, especially in the area of drug interdiction, civil defense
(e.g., storm damage assessment) and natural hazard mitigation (e.g.,
volcano forecasting). The University of Miami uses SAR data for a
variety of terrestrial and oceanographic applications, and has a large
amount of experience in the analysis and use of SAR data, and expertise
in the operation of satellite downlink facilities.
The SAR receiving facility currently under construction by the
University of Miami on the former United States Naval Observatory/
Alternate Time Service Observatory in Perrine, Florida will provide a
unique capability for the Caribbean and southeastern United States
region. The existing Very Long Baseline Interferometry (VLBI) antenna
and the existing ancillary hardware and buildings are ideal for this
purpose. Applications at this ground receiving station will be
extremely diverse. They will include a wide range of scientific
applications in earth, atmosphere and ocean sciences, as well as more
practical applications in the fields of environmental monitoring,
natural hazard assessment, civil defense and defense tactical
applications.
The station will initially operate at X-band, and will be capable
of receiving data from a wide variety of low-Earth orbiting satellite
systems. Our initial operational capability will focus on SAR and
visible and infrared imagery. The combination of these sensor and
imaging types will provide an unprecedented wealth of information of
the earth's surface. Future upgrades of the Center's system will
include the capability to collect L- and S-band downlinks, as well. In
all cases a high priority will be placed on high reliability data
reception to low elevation angles (2 degrees above the local horizon).
A heavy launch schedule over the next few years will place numerous new
satellites with SAR and other radiometric sensors in space that
requires at least two antennas to enable data recovery in the case of
simultaneous satellite passes or situations with a blocked line-of-
sight. The voluminous flow of data associated with high-resolution
satellite sensors such as SAR will require high reliability data
archiving with rapid retrieval, rapid dissemination of data (both raw
and analyzed to some specified level) to selected users, full data
analysis capability, and higher level software products to aid in data
interpretation.
For purposes of illustration, I provide three example applications
of how SAR data can be utilized for drug interdiction, rapid storm
damage assessment, and natural hazard mitigation.

DRUG INTERDICTION

Small, fast moving boats are one of the major vectors for drug
delivery to coastal regions of the southeastern United States. These
boats have small radar cross-sections, and travel exclusively at night
without running lights, and thus are very difficult to detect by
standard techniques. Their low radar cross sections mean that the P3
Orion surveillance aircraft equipped with Standard Ocean surface radar
only rarely detect them (the targets have to be fairly close to the
aircraft). Given the large area of ocean used by traffickers, and the
relatively small numbers of surveillance flights, detection success
rate is low.
SAR can easily detect such targets. It does so not by direct
detection of the boat, but rather by wake imaging. The center line wake
of a small fast moving boat is typically 100-200 meters long, and is
relatively smooth compared to adjacent ocean surface, thus is easily
detected by standard civilian SAR and standard pattern recognition
analysis. A recent test coordinated by the Office of Naval Intelligence
had virtually 100 percent success rate at detecting this class of
target during night time passes of RADASAT. The test target was a
fiberglass boat operated by the University of Miami, cruising at high
speed off Key Biscayne, Florida. Research efforts at the University
include efforts to understand and quantify the interaction of the radar
signal and the ocean surface. These efforts will be crucial to fully
exploiting SARs potential for wake detection in all sea states.
At the present time, there are two civilian SAR satellites that a
South Florida ground station could access, RADARSAT (operated by the
Canadian Space Agency) and ERS-2, operated by ESA. On average, we can
expect to image a given ``patch'' of ocean every few days with one or
both of these systems. Thus, we would probably not detect and track all
targets. On the other hand, we could expect to track a much larger
number of targets than are currently possible, and could generate, with
``post-diction'' analysis, an accurate picture of where most illegal
traffic is originating and landing. This information would be
invaluable to the larger drug interdiction program. Over the several
day transit period of these small craft from Colombia, Venezuela,
Haiti, Dominican Republic and Puerto Rico to the southeastern United
States, approximately 30 percent to 40 percent of targets would be
detected in ``real time'' by this approach with available satellite
coverage, enabling direct at sea interdiction by the Coast Guard. This
assumes of course that the data can be made available quickly to the
responsible agency. The South Florida SAR facility would make this
possible.
SAR is also excellent at mapping changing land use, deforestation,
and new drug growing areas. Again, this data could form a key part of
drug surveillance operations. Here the need for real time is less
critical, and therefore it is possible to build up 100 percent coverage
of a given region over several months, by combining data from various
passes.
In summary, satellite SAR data could make a major impact on the
drug interdiction program. However, realizing its full potential
requires a dedicated facility in South Florida, integrated into the
chain of command of the drug interdiction effort, and integrated into
academic efforts in the area of rapid data processing and rapid image
analysis, including pattern recognition algorithms for wake detection.
The proposed University of Miami SAR ground station is an excellent
vehicle for this type of collaborative activity.

NATURAL HAZARD MITIGATION AND CIVIL DEFENSE

Part of Southcom's mission includes civil defense and natural
hazard mitigation in Central America, South America and the Caribbean
region. The reason is that the nation's long term security interests
are best satisfied by having prosperous, politically stable democracies
in this hemisphere, and thus Southcom has a role to play in promoting
the economic and political ``health'' of the region. Even if we ignore
strictly humanitarian considerations, problems such as extreme poverty
and civil unrest can negatively impact the United States both directly
and indirectly. Examples include illegal immigration, reliance on a
drug economy, and lost market opportunity for United States business.
The poverty and poor infrastructure that is endemic in much of the
hemisphere is exacerbated by natural disasters. In fact there is a
negative feedback, with poor countries having weak infrastructure that
is easily damaged by natural disasters (witness the recent devastation
in Honduras during passage of tropical storm Mitch), followed by a
period of increased poverty after the damage has occurred, precluding
the necessary infrastructure investments. Also much of the region is
especially amenable to severe natural disasters. The Caribbean and
Central America are commonly hit by hurricanes, while the Caribbean,
Central America, and the west coast of South America (Colombia,
Ecuador, Peru and Chile) are frequently the location of devastating
earthquakes and volcanic eruptions. Clearly, any techniques we can use
to mitigate the effects of these natural disasters can be a big help to
the region.

ROLE OF SAR IN VOLCANO AND EARTHQUAKE HAZARD MITIGATION

Urban areas throughout the world are usually concentrated in
coastal areas. For much of Central and South America and the Caribbean,
coastal areas are frequently the sites of large earthquakes and
volcanic eruptions. There is much that geologists do not know about
these events, in terms of predicting the timing of onset, the magnitude
and frequency of events, and the detailed impact on individual urban
areas. One thing we do know is that much more data is required before
we can answer these complex questions. SAR is turning out to be crucial
for many studies of both earthquakes and volcanoes. For volcanoes, SAR
interferometry allows construction of precise DEM's, enabling accurate
prediction of the direction and speed of lahars, a type of volcanic
mudslide. These would seem to be less dangerous than lava flows or
large explosions, but in fact lahars are often the major ``killer''
from volcanoes, claiming more than 20,000 souls at Nevado del Ruiz in
Colombia earlier in the decade. A mudslide from a dormant volcano was
also responsible for most of the casualties in Honduras during the
recent passage of tropical storm Mitch.
Differential SAR interferometry on volcanoes also allows detection
of pre-eruption swelling of the volcano, which many volcanologists
believe can be used to help predict eruption. Such studies are of
academic interest only at the present time, because it takes so long
acquire imagery from the few available ground receiving stations that
can routinely acquire SAR data (six month or longer waits are typical
for U.S. investigators requesting data from the European Space Agency
or the Canadian Space Agency). A South Florida ground station dedicated
to rapid data processing and monitoring of all dangerous targets could
expect to provide at least several weeks warning of major eruption to
civil authorities. Also, a dedicated mapping program could provide
lahar danger maps for all major targets within the Western Hemisphere
within about 18 months of initiating a program.
Earthquakes are an incredible hazard for much of the Western
Hemisphere, capable of causing much death and destruction. A relatively
small earthquake in Los Angeles several years ago caused $20 billion in
damages. An earthquake in the 1970's in Managua, the capital of
Nicaragua, so severely damaged the city that parts of it have never
been rebuilt. The economic devastation caused by this event is believed
by many social scientists to have been an important contributing cause
to two decades of civil war in this country.
Understanding earthquakes is more difficult than understanding
volcanoes, and at the present time most researchers in the field do not
feel it is feasible to predict earthquakes. Nevertheless, SAR can play
a critical role in understanding the earthquake process and reducing
hazard. Earthquakes cause characteristic ground displacement that can
be mapped with differential SAR interferometry. By comparing the
observed displacement pattern to patterns calculated from theory,
seismologists can refine their models for this type of earth movement,
in the process gaining much better understanding of the earthquake
process. It turns out that SAR is probably the best tool available for
this type of study, because of its complete coverage, and all weather,
day/night operations. In some cases, SAR is the only way to get this
kind of data, especially for the inaccessible areas of South America.

ROLE OF SAR IN STORM DAMAGE ASSESSMENT AND CIVIL DEFENSE

As more people and societal infrastructure concentrate along
coastal areas, the United States is becoming more vulnerable to the
impact of tropical cyclones. Furthermore, it is not surprising that
hurricanes are the costliest natural disasters because of the changes
in the population and the national wealth density or revenue. The
States most affected by the cost of hurricanes (e.g. Florida, Texas,
North Carolina and Maryland) have also a high total common tax revenue,
which is an indicator of wealth for the state. The impact of hurricanes
along the East Coast is further amplified because the people moving
into these coastal areas represent the higher wealth segment of our
society. Early and accurate warnings can save millions in dollars and
reduce the detrimental impact of storms upon making landfall. Quick
look SAR imagery can be used to assess the damage of storms after
landfall and assist in directing resources to areas of immediate need.
SAR images can provide multi-faceted information on the
characteristics and properties of storms. Since SAR measures the
electromagnetic radiation scattered back from small ocean waves it can
be used to extract information not only of the sea state, but also of
the surface wind speed. The later information is very important to
weather forecasters, civil defense planners and the population, because
it represents the actual measure of the wind speed at heights of houses
and structures. Sea state information such as the directional
properties of ocean waves and their associated heights and periods are
needed to predict the potential threat to coastlines. Waves impact the
coastal areas in two ways: 1) coastal structures such as jetties,
piers, walls, houses can easily succumb to the huge forces associated
with waves; and 2) an additional storm surge is induced by the waves in
elevating the nearshore water level. Radar frequencies are also
sensitive to the intensity of rain and can better locate concentrations
of strong rainfall within tropical storms. Such real time observations
can provide better estimates of the strength and fury of tropical
storms and their potential threat to people and societal infrastructure
along coastal areas.
After landfall it is critical to obtain timely and accurate
information on the damage of tropical storms. Because SAR imaging can
occur at day and night and during inclement weather, quick looks can be
available to assess the extent of beach erosion, breaches in barrier
islands and destruction of housing and vegetation. Destroyed houses and
structures as well as broken vegetation appears much rougher in SAR
images than in their normal condition. Flooded streets and land will
appear as a smooth surface because water movement will be slow.

EDUCATION: K-12, UNDERGRADUATE, GRADUATE LEVEL

The Florida Space Grant Consortium (FSGC) is a voluntary
association of seventeen public and private Florida Universities and
Colleges, all the community colleges in the state, Kennedy Space Center
Astronaut Memorial Foundation, Higher Education Consortium for Science
and Mathematics, and Spaceport Florida Authority. Collectively, it
serves more than 230,000 university students (100 percent of the public
enrollment and approximately 75 percent of total Florida enrollments).
FSGC represents the State of Florida in NASA's Space Grant College and
Fellowship Program. As one of the sixteen founding Space Grant
Consortia, it was formed in 1989 when the federal Space Grant program
was implemented. With programs now in place in fifty states plus Puerto
Rico and the District of Columbia, Space Grant now joins the Land Grant
and Sea Grant Programs to form a triad of federally mandated programs
addressing critical national needs in education, research and service.
The new National Center for Tropical Remote Sensing at the
University of Miami would provide a unique opportunity for FSGC to
begin dedicated education and training of the use of space-based remote
sensing and imagery. Furthermore, opportunities also exist to broaden
the educational use of the Tropical Remote Sensing site through a K-12
education partnership with Miami-Dade County Public Schools. We
envision the development of a magnet studies program in space science
that would be modeled after a very successful existing program in
marine science and technology in collaboration with the University of
Miami. This partnership would educate first-rate students and help
produce the next generation of scientists, engineers, and technology
experts for the nation.
Mr. Chairman, your previous support to launch this vital remote
sensing initiative has brought us to an important juncture. Now, we
need to bring the project to operational status. We hope to continue
our partnership in fiscal year 2002 with the Department of Defense and
seek $5 million for the Defense Applications Center of the National
Center for Tropical Remote Sensing Applications and Resources. We
understand what a difficult year this will be as you allocate the
limited funds available. However, we believe firmly that this project
is vitally important and can make a major contribution to the various
missions of the Department of Defense.
______

PREPARED STATEMENT OF THE COALITION OF OKLAHOMA INSTITUTIONS OF HIGHER
EDUCATION CENTER FOR AIRCRAFT AND SYSTEMS/SUPPORTING INFRASTRUCTURE

Mr. Chairman and members of the Subcommittee, we thank you for the
opportunity to submit this testimony regarding Oklahoma's distributed
Center for Aircraft and Systems/Supporting Infrastructure, commonly
known by the CASI acronym. This testimony will identify the motivating
national interest in aircraft and systems/support infrastructure, and
describe the CASI approach to serve those needs.
We gratefully acknowledge Congress's incremental funding for the
past year to the Department of Defense in the amount of $1,800,000 for
CASI infrastructure enhancement. Today we respectfully request an
additional $6,000,000 in the pending budget. This request consists of
$5,000,000 for infrastructure enhancement at the three comprehensive
universities and $1,000,000 to aggressively engage Oklahoma's smaller
regional universities in supporting the CASI mission. Funding of this
request will serve to substantially improve and integrate CASI
coalition resources for the purpose of supporting the Department of
Defense's air logistics centers.

STATEMENT OF NATIONAL INTEREST

Modern aircraft fleets, both civilian and military, have become
increasingly expensive to develop, maintain, and operate. Two pressing
issues related to aircraft maintenance costs are in need of immediate
attention.
The first issue is that of aging aircraft inventories, where fewer
new aircraft are presently being built and the existing fleets must be
retained in service periods that, in some cases, dramatically exceed
the original design lifetime. In the 1997 National Research Council
report entitled Aging of United States Air Force Aircraft, the
committee reported, ``The United States Air Force has many old (20 to
35+ years) aircraft that continue to function as the backbone of the
total operational force . . .''. The C/KC-135, DOD's primary air-to-air
refueling platform, is an example of an aging aircraft fleet. While the
original design lifetime of this aircraft was reportedly less than 20
years, the average age of the fleet today is almost 40 years. According
to recent reports, the C/KC-135 fleet is scheduled for retention in the
operational inventory until the year 2040, when the average aircraft
age will approach 80 years. The Oklahoma City Air Logistics Center (OC-
ALC) at Tinker Air Force Base supports the C/KC-135 and other aircraft
fleets and systems. Although maintenance costs of these aircraft are
rapidly increasing, the option of total cost of fleet replacement
(estimated to exceed $40 billion for the existing fleet of more than
600 aircraft) is deemed beyond serious consideration. The technical
challenges of maintaining an aging fleet are comparable to, and in some
respects exceed, those in development of new aircraft platforms and
systems.
The second issue relating to aircraft maintenance and logistics
centers is the need to comply with increasingly stringent environmental
regulations. Large-scale industrial repair/rework operations, such as
the OC-ALC, involve extensive use of solvents and other hazardous
materials resulting in waste streams that must be minimized and
managed. The Tinker AFB is located in an urban county that is marginal
on air-quality non-attainment, and might at some time come under the
appropriate Control Techniques Guidelines (CTG). In addition, the
National Emission Standards for Hazardous Air Pollutants (NESHAP)
provision has recently been enacted. As a result, Tinker AFB has
inserted a large budgetary request for the procurement, installation
and maintenance of abatement equipment over the next several years. The
environmental management groups at most logistics centers, including
the OC-ALC, strongly prefer the development of alternate non-chemical
processes to reduce emissions and, importantly, to reduce the volume
and expense associated with hazardous waste stream handling and
disposal. The OC-ALC needs to substantially reduce emissions to expand
operations without increasing total emissions for the base.
The OC-ALC and other military aircraft programs and logistics
facilities rely extensively on aircraft original equipment
manufacturers (OEMs) and secondary engineering support firms to
establish and update aircraft maintenance technologies and practices.
While continuing private-sector support is a critical aspect of fleet
sustainment, an independent source of alternative approaches,
innovations, and new technology insertion is also essential.
Furthermore, the OEM and engineering support services firms often lack
the specific expertise needed at the critical time to fully support the
needs of operations such as OC-ALC. Oklahoma's research universities
can partner with private-sector firms to provide this timely infusion
of necessary expertise under the CASI framework and utilizing DOD
contracting mechanisms. Several firms have already recognized that CASI
can serve this role and have engaged CASI to provide specialized and
complementary expertise on teams studying aircraft and support
infrastructure problems.

CASI MISSION AND APPROACH

The Center for Aircraft and Systems/Supporting Infrastructure is a
revolutionary, multi-institutional, multi-disciplinary organization
combining engineering, science, and business programs from Oklahoma's
institutions of higher education. The CASI mission is to support the
aviation community (both military and civilian) in developing and
integrating promising new technologies with economics-based life-cycle
engineering management methods, to assist aircraft fleet owners in
substantially lowering maintenance costs, promoting environmental
compliance, increasing fleet readiness, and improving safety.
CASI has been organized under the aegis of the State Regents for
Higher Education in Oklahoma to provide a single point of contact for
the aviation sector to access expertise at all the Oklahoma
institutions of higher education. CASI is the first academic entity of
its type in the nation focusing on the development of a state-wide,
multi-disciplinary approach for conducting applied research, modeling,
technology insertion, and engineering support activities for aircraft
maintenance and sustainment.
The CASI coalition includes Oklahoma's system of higher education,
state government, and the military and civilian aviation sectors. The
Center's faculty, students, and extensive research facilities serve as
a valuable resource for applied research, technical expertise, and
insertion of emerging technologies to support aircraft logistics. The
comprehensive universities primarily responsible for CASI
administration are the University of Oklahoma System, the University of
Tulsa, and the Oklahoma State University and A&M System. These systems
of higher education include main campuses in Norman, Tulsa, and
Stillwater, respectively; system campuses such as Cameron, Langston,
and Northeastern Oklahoma A&M Universities; and the University of
Oklahoma Health Sciences Center. Regional institutions such as the
University of Central Oklahoma are also involved in CASI. The CASI
Board of Directors consists of Associate Deans acting on the authority
of the Vice-Presidents of Research at their respective universities.
The Board includes Dr. Edward Knobbe of Oklahoma State University
(Executive Director), Dr. James Sorem of the University of Tulsa (Co-
Director) and Dr. Thomas Landers of the University of Oklahoma (Co-
Director).
CASI is positioning to support aircraft logistics centers and
maintenance depots across the nation, including the OC-ALC. There are
numerous expertise areas dispersed throughout Oklahoma's Higher
Education System. Among them are included:
--High performance materials, aircraft coatings, and ultra-precision
surface finishing methods.
--Specializations in mechanical & aerospace engineering such as
cyclic fatigue analysis and stress-corrosion cracking.
--Modeling, simulation, and forecasting for reliability/physics of
failure and logistics.
--Economic cost-of-ownership modeling and best-practices for
maintaining aircraft fleets, including life-cycle cost benefit
analysis, optimal repair vs. replacement strategies, and
enhanced readiness.
--Hazardous waste stream abatement, remediation, advanced
environmental monitoring methods, and pollution prevention
technologies.
--Occupational health and bioengineering.
--Industrial and manufacturing engineering (e.g., man-machine
studies, resource allocation, machining and metrology, process
improvements, material handling and logistics, metrics and
benchmarking).
--Information Technology in cyber-security and in the product
realization and sustainment process, including digital and
collaborative design, database management, and data mining.
--Avionics and ground electronics applications such as real-time
aircraft health assessment, fault isolation and detection, and
repair verification testing.
Immediately prior to the past fiscal year, the CASI consortium
established a cost-share program designed to stimulate the
collaboration of Oklahoma universities with the OC-ALC and other air
logistics centers. The Oklahoma Experimental Program to Stimulate
Competitive Research (EPSCoR) office, the Oklahoma State Regents for
Higher Education, and the research institutions of Oklahoma all
provided seed funding for this initiative. The state cost share program
has fostered several new technology insertion activities with
collaborating entities at the OC-ALC. During the past year, CASI
faculty and students have initiated over $1,500,000 in projects
supporting OC-ALC through contracts managed by firms in the private
sector. Five projects in summer of 2000 initiated faculty collaboration
with mission-critical programs at Tinker Air Force Base/OC-ALC in the
areas of digital design and analysis and in environmental monitoring
and remediation. Eleven faculty and their student assistants are also
currently conducting the following nine collaborative projects of
approximately one-year duration:
--Corrosion data management
--Erosion resistant ZnS coatings
--Hazardous waste treatment plant metals optimization
--Interactive web-based training of depot maintenance personnel
--Optimization of building 3001 conveyor material handling system
--Enhanced CNG (natural gas) powered vehicles
--Fuel pump test stands
--Air monitoring technologies
--Satellite imaging and 3-D visualization for air-pollution
monitoring
The summer program for 2001 includes initiation of student
participation and a four-fold increase in faculty participation,
compared to Summer 2000. These summer projects have been defined by OC-
ALC mission organizations to address a wide range of needs, including
manufacturing, information technology, environmental science, avionics
engineering, and business processes.
CASI is also participating in the OC-ALC Science and Engineering
Career Panel (SECP) to define requirements and develop strategies for
meeting OC-ALC hiring needs in these critical career fields associated
with expanding workload and impending retirements during the next seven
years.
CASI faculty have begun entering into strategic relationships to
provide technology support for DOD systems maintained at sites outside
of Oklahoma, including the Ogden Air Logistics Center (OO-ALC) at Hill
Air Force Base in Utah and the Warner Robins Air Logistics Center (WR-
ALC) at Robins Air Force Base in Georgia. Smaller regional universities
in Oklahoma are also becoming involved in work for the DOD through
CASI.
Congressional appropriations are needed to enhance CASI's existing
infrastructure and sustain the growth begun in the last two years. OC-
ALC is actively leading the definition and prioritization of
initiatives to utilize Congressional incremental funding. Plans for
investment of these funds include an expanded program of summer
collaborative initiation projects, in-depth problem solving on these
topics, augmentation of support capabilities at the three comprehensive
universities, and aggressive expansion of statewide participation by
regional universities.
______

PREPARED STATEMENT OF FLORIDA STATE UNIVERSITY

Mr. Chairman and distinguished members of the Subcommittee: Thank
you for allowing my remarks to be made part of the hearing record.
Florida State University has four projects that we are pursuing
through the Department of Defense. In the interest of time, three of
these projects are detailed in my written testimony. I will briefly
describe to you today our top priority project--FSU's Center for
Advanced Power Systems. In addition, I would like to comment briefly on
the importance of R&D funding within DOD.
Mr. Chairman, I would like to begin with emphasizing the important
role defense R&D plays at universities around the country and its
crucially-important role in preserving our national security.
It is widely recognized that the DOD's Basic Research (6.1) and
Applied Research (6.2) accounts provide the building blocks for future
advances in all defense science and technologies; continuation of a
healthy science and engineering base is mandatory in keeping our
military the strongest and best prepared in the world. Since World War
II, DOD funding of university-based research has produced some of the
most significant scientific breakthroughs and innovative technologies
that include telecommunications and computing activities, advanced
materials, and numerous applications of lasers and radar that have kept
our Nation at the technological forefront.
While basic and applied research (6.1 and 6.2) are the linchpins in
preparing for our future, they also provide us with the ability to look
beyond today's problems to tomorrow's solutions.
An excellent example is FSU's work with the Office of Naval
Research (ONR) on the Center for Advanced Power Systems. I am
accompanied today by Mr. James Ferner, Acting Director of that Center.
I addressed this topic last year with this Committee just prior to ONR
entering into a contract with Florida State University to coordinate
the research for the development and testing for the next-generation
propulsion systems for the Navy's fleet. Since that time, this project
has greatly expanded, and we are in the midst of establishing a
consortium with several other key research universities to work with us
on this high priority project.
The All-Electric Ship Systems Research and Development Consortium
will bring together a number of ONR-funded programs in the electric
systems area to establish a team approach to focused projects involving
end users, equipment suppliers, and academic researchers. A key element
of the program is the effort to foster ``Dual Use'' technologies by
structuring the consortium to include Navy, commercial/industrial and
utility-based participation. The technology problems to be solved in
both Naval and commercial power systems are similar and related and
will benefit from a joint approach. It is expected that the consortium
will become a key technical agent of the Navy in the development of the
electric ship program.
Ship propulsion and energy systems are major users of manpower and
energy and make up a major part of the weight and volume of a ship.
Hull mechanical and electrical systems, essentially unchanged for the
past 20 years, are prime candidates for applications of new
technologies that would achieve weight and volume efficiencies and
reduce manning costs through automation. Advances in weapons and
communications technologies are placing new demands on ship electrical
systems. A system-driven program of research and development in
advanced electrical power technologies is essential to capitalize on
the opportunities offered by the all-electric concept. Weight and
volume reductions, improved reliability and survivability, and reduced
manning costs are major benefits to be achieved from the all-electric
ship concept. All-electric systems provide maximum opportunities for
introduction of new technologies and implementation of automation.
Recognizing the long lifetime of a ship and the lead times required
to develop and demonstrate new technologies, the consortium program
will be focused on long-term programs with phased introduction of new
technologies to provide the experience necessary to support major
technology changes. First, the consortium plans to develop a strong
systems simulation and modeling capability. This capability is
essential in evaluating existing electric power systems, setting
standards, developing control strategies, and developing guidelines for
applications of existing technologies. The next step in the development
roadmap will be advanced components based on well-understood new
technologies that can be introduced in place of existing components in
existing and new systems to achieve significant performance objectives.
Finally, we will focus on development of new component and system
advances that require significant research and development and
prototype demonstration.
We will be requesting $19,000,000 in fiscal year 2002 to fund the
activities of this consortium and to further the Navy's goals of
preserving our Nation's security in the years ahead.
______

PREPARED STATEMENT OF THE UNIVERSITY OF MEDICINE AND DENTISTRY OF NEW
JERSEY

The University of Medicine and Dentistry of New Jersey (UMDNJ) is
New Jersey's premier senior academic research institution and the
largest public university of the health sciences in the country. The
UMDNJ statewide system is located on five campuses and consists of 3
medical schools, and schools of dentistry, nursing, health related
professions, public health and graduate biomedical sciences. UMDNJ
comprises a University-owned acute care hospital, three core teaching
hospitals, an integrated behavioral health care delivery system, a
statewide system for managed care and affiliations with more than 200
health care and educational institutions statewide.
UMDNJ is home to the International Center for Public Health, a
strategic initiative that will create a world-class infectious disease
research and treatment complex at University Heights Science Park in
Newark, New Jersey; the New Jersey Medical School National Tuberculosis
Center, one of only three model TB Prevention and Control Centers in
the United States funded by the Centers for Disease Control (CDC); the
Center for Emerging Pathogens at the New Jersey Medical School, which
serves as a focus for infectious disease research; the Environmental
and Occupational Health Sciences Institute (EOHSI), a joint venture of
UMDNJ and Rutgers University, recognized as one of a select number of
national centers of excellence by several federal agencies; and a
statewide system of Level I and II Trauma Centers.
In addition, UMDNJ plays a dominant role in providing continuing
education and outreach in all aspects of emergency preparedness. Basic
and applied research among the UMDNJ campuses directly addresses the
biomedical implications of biological and chemical weapons and
appropriate response in the event of their use.
No other institution in the nation possesses resources that can
match our scope in health professions education, research, health care
delivery, and community service initiatives with state, federal and
local entities. UMDNJ is an integral part of the Governor of New
Jersey's initiatives with close ties to state health services and state
law enforcement. Similarly, UMDNJ is closely tied to the City of Newark
providing critical EMS services under contract plus involvement at
other levels. Thus, partnerships are already in place to enable us to
formulate a comprehensive network approach to emergency preparedness.
UMDNJ's scientific and academic expertise uniquely positions us to
develop a comprehensive, statewide program to combat chemical and
biological terrorist attacks through emergency response training,
identification of agents, basic research and technology.
New Jersey is the most populated state in the nation and Newark,
its largest city, is in close proximity to New York City; linked with
this metropolis by extensive air, rail and highway commuter services.
Newark Airport, the 12th largest in the United States, is a
transportation hub for the entire Northeast (ranking 3rd in
international trade). Over 30 million passengers travel through Newark,
making the region a prime target for the possible introduction of
infectious diseases.
In the event of a biological attack, our most effective measures
will rely on early recognition of clusters of cases in local emergency
rooms, or a sudden increase of cases reported to Public Health
Departments. Physicians and other health care workers must be prepared
to recognize the outbreak of disease caused by biological weapons. A
dual effort is needed to improve the delivery of currently-available
public health measures and to improve our ability to recognize that a
biological weapon has been used.
With the strong support of this committee, UMDNJ has achieved
$3,200,000 over the past two years to establish a Center for BioDefense
in New Jersey. That funding will be focused on basic scientific
research to understand and identify infectious biological organisms,
and to classify the response to these organisms in order to develop
diagnostic profiles that will lead to intervention and treatment for
victims of biological or chemical terrorist attacks. We have submitted
a proposal to the U.S. Army Medical Defense Research Program that will
focus on DNA microarrays to identify profiles for a host response to
infectious agents. We look forward to a positive response to our
proposal and to beginning this important research that could have a
large impact on military and civil disaster detection.
In addition to our scientific expertise, an important component of
the UMDNJ-Center for BioDefense is our expertise in education and
training concerning chemical and biological weapons. The nation's
foremost program in education and training concerning chemical threats
is located at UMDNJ. Our Center for Education and Training (CET) of the
Environmental and Occupational Health Sciences Institute (EOHSI) has
operated as a continuing education center for over 20 years providing
environmental and occupational safety and health training through its
Hazardous Materials Worker Training Center. The Center has provided
training to some 175,000 individuals (police, firefighters, municipal
and state employees, as well as to physicians, nurses and industrial
hygienists) in hazardous materials-related topics.
Additionally, there are several Emergency Medical Services (EMS)
Regional Communications Centers (RCC) in New Jersey which provide the
medical dispatch and/or coordination of the state's Mobile Intensive
Care Units (MICUs). However, there is no coordination of information
within the 84 acute care hospitals across the state.
While emergency medical technicians and paramedics maintain state
certification requirements, these do not include continued education in
incident command, EMS mass casualty response training and hazardous
material training.
The UMDNJ-Center for BioDefense will use the expertise at UMDNJ-
University Hospital, the state's Level I Trauma Center, and University
Emergency Medical Services to provide statewide leadership in the
training of EMS, first responders and other health professionals and to
coordinate a standard regional response to incidents involving weapons
of mass destruction, mass casualty, bioterrorism or public health
threats.
An Incident Support and Operational Planning (ISOP) team will be
responsible for training coordinated communications and response. On-
site ISOP training will be provided to hospitals and EMS teams. The
unit would also provide technical expertise to assist communities in
the development of emergency plans and procedures. The ISOP team would
organize and participate in emergency exercises at all levels of
government and will become a regional resource to counties and local
communities within the region.
ISOP communications would be responsible to track and disseminate
statewide hospital bed status. This would be accomplished through an
increase in the current technology at University Hospital's Regional
Emergency Medical Communications System (REMCS) dispatch center to
computerize information collection and distribution. Improvements would
include: designing, implementing and maintaining a secure Internet-
based status and tracking system; upgrading the existing radio system
to integrate with the New Jersey State Police, the Office of Emergency
Management, the Department of Health and the Department of
Transportation; implementing an alert network to provide public health
agencies with critical information on potential threats to the public.
The ISOP response would require hardware, software and trained
personnel. The team would include individuals highly trained to respond
and support large-scale incidents and with the knowledge and experience
to staff various positions for all categories of emergencies. Regional
response vehicles would be needed including field command vehicles,
mass casualty response units, mobile decontamination units and
rehabilitation units.
As New Jersey's university of the health sciences, UMDNJ is well
positioned to provide the leadership and expertise to implement a
statewide medical response system to bioterrorism. As part of our
Center for BioDefense, University Hospital provides the E-911 EMS
system for the greater Newark area, as well as the E-911 emergency
Basic Life Support (BLS) in Camden. Other partners include the Level I
Trauma Centers at Cooper Medical Center in Camden and Robert Wood
Johnson University Hospital In New Brunswick, two of the principal
teaching hospitals of UMDNJ. Members of the UMDNJ Emergency Response
team participate in federally-sponsored ``Weapons of Mass Destruction''
education programs and play a leadership role in the City of Newark's
Metropolitan Medical Response System.
UMDNJ respectfully requests funding of $2,000,000 for the Center
for BioDefense to prepare, equip and train EMS personnel and other
responders who are often first on the scene when a weapon of mass
destruction has been employed. This funding will assist the Center's
efforts to develop a coordinated, statewide Medical Response System
that will strengthen New Jersey's ability to respond to bioterrorism.
We wish to again thank the Members of this Committee for their past
support of UMDNJ's initiatives in research, education and training
concerning all aspects of bioterrorism.
______

PREPARED STATEMENT OF NORTHWESTERN UNIVERSITY

Senator Stevens, Senator Inouye, and distinguished Senators of the
Appropriations Committee, thank you for the opportunity to submit
testimony before your committee regarding Northwestern University's
efforts to help address defense-related health needs through the
Institute for Bioengineering and Nanoscience in Advanced Medicine. We
believe this Institute will foster discoveries in the field of
nanotechnology that will be important for national security. I would
also like to thank the committee and subcommittee for providing an
initial $4,000,000 in the fiscal year 2001 Defense Appropriations bill
for this center and request continuation funding as I will further
describe.
Senator, as you know research and development at the nanoscale
(i.e., at the level of atoms, molecules, and supramolecular structures)
is focused upon generating nanostructures that have novel physical,
chemical, and biological properties. Northwestern, as an acknowledged
leader in the emerging field of nanotechnology, can make a significant
contribution by addressing a range of health issues, especially those
of importance to national security and the Department of Defense.
In September of 1999, the Interagency Working Group on Nanoscience,
Engineering, and Technology (IWGN) published a report on its workshop
held earlier that year. The report recognized the importance of
nanotechnology to the technological and economic competitiveness of the
United States; recommended greatly increased funding for nanotechnology
research and development, especially to support university centers of
excellence and their related infrastructure; and emphasized, among
other fields, the importance of nanotechnology for national defense
health needs. Specifically, the report said:
``Nanoscale science and engineering promises to become a strategic,
dominant technology in the next 10-20 years, because control of matter
at the nanoscale underpins innovation and progress in most industries,
in the economy, in health and environmental management, in quality of
life, and in national security. The consensus of IWGN workshop
participants and contributors is that nanotechnology will lead to the
next industrial revolution. (p. xviii)
Every effort must be made to foster multidepartmental centers for
nanotechnology on campuses. The most successful research efforts will
be those that can create new infrastructures (for example, materials
preparation and characterization facilities) for these centers. (p.
xix)
Information and weapons are tools; human performance ultimately
determines warfare results; improvements in monitors/controls of human
physiology for performance assessment, casualty care, and
susceptibility to chemical/biological agents are all important. (p.
192)''
In addition, these points echo the June 1998 report of the Defense
Science Board Task Force for the 21st Century, which recommended
substantial new investment in ``revolutionary'' technologies, including
``biological/chemical technologies for BW/CW defense'' and ``nano-
technology for computation and sensing devices'' (p. 42). These
priorities were reemphasized in the June, 2000, Summary of the Defense
Science Board Recommendations (e.g., p. 4) and in the February, 2001,
Phase III report of the U.S. Commission on National Security/21st
Century (e.g., pp. VIII-IX, 3, 16).
One of the objectives of the proposed Institute at Northwestern is
to advance through nanotechnology our capabilities to detect, target,
and manipulate viruses, cells, and other biological agents and to apply
these capabilities to medicine and healthcare. In addition to improving
medicine and healthcare generally, these advances will be targeted at
the Institute to the needs of national security. Miniaturized devices,
when implanted in the body, could monitor health, diagnose battlefield
traumas, and deliver controlled-release medications. These
capabilities, plus the use of micro- and nanoscale devices for non-
invasive surgery, could allow sophisticated treatment of internal
wounds in the battlefield. The subsequent repair and rehabilitation of
battlefield wounds could be greatly enhanced by nanostructured
materials to control the rejection of artificial implants and to
stimulate regeneration of damaged tissues. Nanoscale sensors could, in
principle, detect and identify as little as a single cell or virus in a
biowarfare agent, and artificial bioskins could protect the military
from such agents while remaining permeable for respiration.
Northwestern University is the ideal location for the proposed
Institute as we have been a leader in the development of nanotechnology
nationwide. Northwestern faculty have published, patented, and applied
numerous research discoveries in this field and Northwestern's past
contributions stem from our history of interdisciplinary research. The
Institute may be unique as an interdisciplinary configuration as it: is
located within the Medical School and may draw upon multiple
departments; and its close links with the Center for Nanofabrication
and Molecular Self-Assembly, the McCormick School of Engineering, and
physical and life science departments within the Weinberg College of
Arts and Sciences. To accomplish the goals of the proposed Institute,
physical scientists, biologists, and engineers will work side by side
with clinical researchers in a medical context to develop frontier
research in nanobiotechnology.
The facilities for the Institute will require the co-location of
five major laboratories and state-of-the art equipment. One sector of
the Institute will consist of a biological clean room facility designed
simultaneously for electronic and photonic device fabrication and
biological research involving the culturing of cells and growth of
tissues in sophisticated bioreactors. A second sector will be a state-
of-the-art laser physics laboratory with capabilities for the study of
the interaction of light with biological structures and also the
manipulation of biological structures and molecules with photons. The
third is a nonconventional chemical laboratory with simultaneous
capability for synthesis and also rapid screening of properties in
novel chemicals and materials using microprobes. The fourth sector will
be an imaging laboratory, in which all types of state-of-the-art
microscopes, particularly scanning and electron microscopes, will be
maintained in order to characterize biological structures, plus
electronic and photonic devices. The fifth one will be a computational
laboratory where large-scale simulations can be undertaken, including
the three dimensional visualization of phenomena being studied.
These facilities provide a unique infrastructure to support the
research undertaken not only by Northwestern faculty and students, but
also by investigators from DOD, federal agency, industrial, and
university laboratories.
The cost for construction of the Institute's facilities is
estimated at approximately $30,000,000, with operating costs estimated
at $3,000,000 to $5,000,000 per year. These facilities will occupy the
10th and 11th floors in the first tower of Northwestern's new
biomedical research building on the Chicago campus and will be
completed in three phases. Phase one, which involves construction of
the shell and partial fit out of the laboratories in the first tower,
will cost approximately $145,000,000. Phase two, which involves
building out the space that was left shelled in phase one, will cost
approximately $55,000,000. In addition to this $200,000,000, 12-story
tower, phase three will add a connected 15-story tower at a cost still
undetermined. When completed, the three phases will add more than 1,100
new faculty, staff, and students to the Chicago campus.
Two extraordinary private gifts totaling $65,000,000 have been
donated to the building project. In addition, Northwestern Memorial
Hospital has pledged $25,000,000, and Northwestern University has
designated $25,000,000 of its own funds. In 2000, Governor Ryan
committed $30,000,000 ($10,000,000 per year for three years) from the
State of Illinois, and Northwestern requested an equal amount from the
U.S. Government ($10,000,000 per year for three years). These federal
funds would be leveraged more than six times over by non-federal funds
contributed to the $200,000,000 cost of phases one and two.
Senators Stevens and Inouye, Northwestern respectfully requests
$10,000,000 in the fiscal year 2002 Defense Appropriations bill to make
this facility operational, furthering research and development of
nanotechnology on behalf of defense-related health needs. We believe
these federal funds will be an important impetus to help Northwestern
raise $25,000,000 for the remaining capital costs for phase two and
more than $100,000,000 in endowment for personnel and operating costs
associated with phases one and two. We hope the committee and
subcommittees will continue to fund this important facility.
Thank you for the opportunity to testify.
______

PREPARED STATEMENT OF JAMES L. WILSON, ATTORNEY, WILSON & DREXLER, P.C.

I very much appreciate your invitation to appear before your
subcommittee on Wednesday, May 23rd to express my views with respect to
the Sea Cadet and Junior ROTC programs. Unfortunately it is not
possible for me to be in Washington on that date. I would very much
appreciate it if you could bring the substance of this letter to the
members of your committee.
Our local high school in Manahawkin, New Jersey, sponsors an Air
Force Junior ROTC. I have frequent contacts with the High School on
behalf of organizations in which I participate, and have had many
opportunities to observe the students. The contrast between those in
the AFJROTC and the other students is quite marked. The Cadets show a
pride, personal organization, and general attitude that we would like
to see in all of our young people.
My contacts with the Sea Cadets are less frequent, but as a member
of the Navy League I have become aware of the program, and had an
opportunity to see its effect. In these days of declining moral and
personal standards, these and similar programs have a beneficial effect
on personal organization, leadership ability, and standards, in the
students themselves, and in their associates.
As a college student at the outbreak of World War II, I was
fortunate to participate in the Naval ROTC; then, as a destroyer
officer, in essentially all of the operations of the Fifth and Third
Fleets during 1944 and 1945; then for two more years in 1950-52.
Otherwise, while I am sure I would have entered the armed forces, my
contribution to the war effort would probably have been negligible. It
clearly also added to my personal development. I believe both of the
subject programs give our best young people an opportunity to identify
themselves at an early age, and that from them many of our fixture
leaders will come. We should look for every way to maintain and
encourage these and similar programs. They represent our best hopes for
the fixture.
______

PREPARED STATEMENT OF LT. COL. KEVIN REGAN, U.S. MARINE CORPS RESERVE
ON BEHALF OF THE OVARIAN CANCER NATIONAL ALLIANCE

Mr. Chairman and Members of the Committee: My name is Kevin Regan
and I am a Lieutenant Colonel in the United States Marine Corps
Reserve. Last December, my 45-year-old wife and mother of my two young
children, lost her 2\1/2\ year battle with ovarian cancer. Gail was a
retired Navy Lieutenant Commander who served proudly in the Medical
Service Corps. In retirement, she continued to serve her Navy and her
country by participating in Navy health conferences and being selected
to be a member on the DOD Ovarian Cancer Research Program peer review
panel. I would like to tell you about our experience with this
insidious disease and ask that the funding level for the Department of
Defense's Ovarian Cancer Research Program be increased to $20 million
for fiscal year 2002.
During the summer of 1998, we were living in San Diego and Gail was
feeling great. She did discover though, a tiny pea sized lump just
under the skin on her sternum. Her doctor was not concerned, but he
offered to biopsy it. A week later we got the terrible news that it was
an adenocarcinoma, primary site unknown. At the Naval Hospital in San
Diego, we immediately got to see a GYN Oncologist. After an exam they
squeezed her in at the last minute for a CT scan and an ultra sound.
After nervously waiting through the three day Labor Day weekend, we got
good news that there were no visible tumors. A few days later we
received the results of her CA-125 blood test. The CA-125 test can
sometimes indicate the presence of ovarian cancer. Because her CA-125
was elevated, her doctor advised doing an exploratory laparotomy. This
turned into major surgery because he found tumor everywhere. He did a
complete hysterectomy and oopherectomy (removal of the ovaries). Gail
immediately began a 9-month course of chemotherapy followed by a 6-week
course of whole abdominal radiation. She enjoyed 6 months of remission
before her first and final recurrence.
As a Marine Officer, I certainly believe that our defense dollars
should be spent to continually maintain and improve our military's
readiness. Ovarian Cancer does adversely affect our readiness. During
our ordeal, I was the only Air Officer for a reserve Marine Battalion
at Camp Pendleton. Not only did I miss important training exercises,
but also if my Battalion had been activated and deployed, I would have
had to stay behind to care for Gail and my children.
At this time, there is no early detection or screening test for
ovarian cancer. In Gail's case, even when the doctors knew she had a
stage IV ``something'' cancer, they were not certain it was ovarian
until her surgery. According to the American Cancer Society, with early
detection of ovarian cancer there is a 95 percent chance of survival.
Unfortunately, only 25 percent are detected early.
The Ovarian Cancer National Alliance has launched an initiative to
educate women and health care providers across the nation about the
symptoms, risks, and treatments of ovarian cancer. Until Gail was
diagnosed, we did not know the symptoms, if we had, my children might
still have their mother, I might still have my beautiful wife, and the
Navy would still have a loyal and proud officer.
This year it is estimated that there will be 23,000 new cases of
ovarian cancer and it is estimated that there will be 14,000 deaths.
The National Cancer Institute has said that the risk of developing it
increases with age, with most cases occurring in women over 50. Last
year, while Gail was getting her chemotherapy at Walter Reed, she met a
young Navy Petty Officer who was diagnosed at 24 years old! Her husband
is also an active duty Petty Officer.
In closing, I would like to say that the Department of Defense's
Ovarian Cancer Research Program is critically important. Among the
first research grants is a study that is looking for molecular markers
that can help detect ovarian cancer at an early stage. Other research
is focusing on prevention, and we are getting results. There is now an
increased understanding in the role oral contraceptives and the hormone
progestin found in them play in protecting women against ovarian
cancer. Because of this research, maybe soon I can tell my daughter
that she and millions of other women do not have to go through the
ordeal that Gail and I went through.
Thank you for your time, Mr. Chairman and committee members, I am
ready to try and answer any questions you may have.
______

PREPARED STATEMENT OF THE JUVENILE DIABETES RESEARCH FOUNDATION
INTERNATIONAL

Chairman Stevens and the Members of the Subcommittee, thank you for
the opportunity to submit this testimony in support of $10,000,000 in
research funding to allow the Department of Defense (DOD) to continue
and expand research into biosensor technology.
I am submitting this statement in both a professional and personal
capacity. My professional interest is due to my background with the
U.S. military. I would like to speak predominantly about that in
support of the Committee's action this last year in allocating
$2,500,000 to support funding to look at noninvasive methods of
assessing the health of soldiers.
Before turning to that, let me be forthright about my personal
involvement. I have a son who has juvenile diabetes. He is one of 16
million people in the United States who has diabetes. I am very
concerned for him, and a noninvasive method of assessing blood sugars
would have an enormous personal benefit to him. People who have
juvenile diabetes need to prick their fingers some five or six times a
day. I've determined that my son has done it some 17,000 times in the
course of the 9 years he has been a victim of this disease. Anything we
develop technologically that would help him or those other 16 million
Americans I think would be very wonderful.
I might add that we spend about one in every four Medicare dollars
on people with diabetes, so the reward financially for the public more
broadly is very great.
This Subcommittee is naturally focused on the question of the
military, and there my interest arises from my focus on biological
warfare and on the health of our troops. As members of this body well
know, the frequency of casualties for us in the military from disease
is greater than the frequency of battlefield casualties from enemy
fire. More people have died in our wars from health problems than have
died from wounds on the battlefield.
We have now the opportunity, which is immense, to correct this or
to diminish it by assessing people's health through noninvasive means
while they are actually on the battlefield or preparing to go there.
Two enormous technological developments are opening up the
possibilities for us. We are just missing a third, and this is where
the committee's funding has been particularly helpful, and I would like
to encourage an expansion of that funding. On one hand, we have, first,
a very good increased understanding of the metabolic processes in human
beings and what is happening in blood systems and how that connects to
people's health, and, second, we have the development of wireless
communication technology. Your cell phones are a very good example of
that technology. They demonstrate that we can get communications from
soldiers on the battlefield and assimilate that information and see
what is happening. What we lack is a methodology in the middle that
connects these two things, that enables us to assess what it is that is
happening inside someone's body without penetrating it.
When NASA, for example, sends astronauts into orbit, it frequently
needs to know what is happening in their bodies. In order to find out,
they need blood samples. As a result astronauts in space must
frequently draw blood from one another. This is a twentieth century way
of dealing with a twenty-first century problem. We can, through a
variety of methods (ultraviolet detection, analysis of sweat etc.)
determine better what is happening inside people's bodies, but that
missing research link is not richly developed.
The Army is eager to focus on this. Last year's budget allocated
$2,500,000 for this purpose. The program is just getting started now.
It has solicitations out for proposals and a workshop is planned from
September 5 to September 7. I think that will be very illuminating, but
I would suggest two things.
First, it is imperative to continue this funding. Second,
unfortunately, the amount of money available is unduly confining
inquiry to government sources. Solicitations have only been asked from
within the government. Because of the diabetes problem and other
things, a large number of private industries are also interested in
this research and if funding is available to expand the solicitation so
that it reached out to private industry as well, I think you would
accomplish yet more for the military and more broadly for the American
public. That would cost, I think, something on the order of $10,000,000
in the year ahead, and I would encourage you to allocate that funding
if you can find a way to do it.
Thank you for your consideration.

SUBCOMMITTEE RECESS

Senator Stevens. Thank you very much.
Our next meeting will be on Wednesday, June 6, to review
the Air Force programs.
[Whereupon, at 12:17 p.m., Wednesday, May 23, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
June 6.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, JUNE 6, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Daniel K. Inouye (chairman)
presiding.
Present: Senators Inouye, Dorgan, Feinstein, Stevens,
Cochran, and Domenici.
Also present: Senator Craig.

DEPARTMENT OF DEFENSE

Department of the Air Force

STATEMENTS OF:
HON. JAMES G. ROCHE, SECRETARY
GENERAL MICHAEL E. RYAN, CHIEF OF STAFF

OPENING STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. For some of my colleagues, this may be a
day of exuberance and celebration, but I wish to tell all of
you that in this committee it will be business as usual. But in
a personal sense it is a bit sad, because I have become so
accustomed to his face sitting here, and he has been a good
chairman, and I know he will continue to be a good chairman,
and so if those of you come out with the word chairman and see
both of our heads turn, do not be surprised. I can assure you
that we will carry on in the spirit of bipartisanship, as we
have for many decades now. I have had the privilege and honor
of working with Senator Stevens from the day he took his oath
in the Senate, and I see no reason why this should discontinue.
I can assure you that the spirit of collaboration and
cooperation will continue, and I hope that this spirit will in
some way enhance the mission that you are called upon to carry
out.
So the committee is pleased to welcome you, Dr. Roche and
the Chief of Staff, General Ryan. It is always good to see you,
sir. Dr. Roche, it is my understanding that this is your first
appearance before the Congress as Air Force Secretary.
Dr. Roche. Yes, it is, Mr. Chairman.
Senator Inouye. I trust that this will be one of your many
productive and enjoyable meetings that you have with this
committee.
Today's hearing also initiates the committee's review of
the military service programs. We are, of course, laboring a
bit in the dark because the Pentagon's final budget request for
fiscal year 2002 has yet to be submitted. Nevertheless, Senator
Stevens and I felt it necessary to begin now to lay the
foundation for review later this year.
With that, I can assure you that this committee remains
mindful of the challenges facing the Air Force. We know of your
rising operating costs that continue to plague the Service,
pilot shortages become a norm, mission-capable rates are still
lower than what they should be, and procurement and research
and development (R&D) funding continue to get squeezed in the
process.
So it is our hope, and I am sure that all of my colleagues,
that the Department's fiscal year 2002 budget request and the
Secretary's strategic review will meet these challenges head
on. The Nation cannot afford to pass up this opportunity to
fully address our national security needs for now and in the
future. That is why I strongly urge you, as I will urge your
counterparts in other services, not to let this opportunity
slip away.
Finally, the administration last week submitted a fiscal
year 2001 supplemental appropriation request addressing many of
the concerns I just mentioned. While we may have some questions
today regarding this submission, let me also assure you that
the committee is fully aware of the pressing need for these
funds. We will work to achieve a timely resolution of this
matter.
Now, if I may, I would like to call upon my cochairman,
Senator Stevens, for any opening remarks.

STATEMENT OF Senator TED STEVENS

Senator Stevens. Thank you very much, Mr. Chairman, and I
welcome your comments. I know of no American I trust more with
regard to the future of our Armed Services than you, Senator
Inouye, and I am delighted to be able to continue to work with
you.
I want to congratulate Charlie Houy, who is now the chief
of staff of the subcommittee, Steve Cortese who is with me
here. We will continue to work with you. We have worked
together for more than a quarter of a century now, and I do not
think anyone here needs for me to extol, Senator Inouye, your
background in terms of defense, but we pledge to you we will
continue to work with you as we have in the past, in a
bipartisan way.
I really can tell you that I have never waived in terms of
my loyalty and support to you in terms of defense matters, and
it has been reciprocal, so we have a working team that there
should be no glitch at all in terms of defense policy as far as
appropriations is concerned.
I am pleased to welcome you, Mr. Secretary, here for your
first time, and while we do not have the budget yet before us,
as the chairman has indicated, we do believe this is a session
to get some understanding of where you are going and what we
might foresee, as well as we will have some questions, as the
chairman has said, on the supplemental request for fiscal year
2001. General Ryan and I discussed those yesterday a little
bit.
We are anxious to get a little of your understanding of the
job you have taken on, Mr. Secretary, and it is nice to have a
chance to do this early in your career. You have just come on
board. There is a great deal of attention being paid to
tactical aviation programs such as the F-22, the F-18, and the
Joint Strike Fighter, which we discussed yesterday. General
Ryan and I discussed the Comanche helicopter, and I think you
will find that we are interested in a great many programs of
the Air Force, particularly the tanker and air fleet problem.
We have a new strategy in our country that demands airlift
to be a partner with our rapidly deployable forces, and it does
seem to me we have got a change coming, a sea change coming in
terms of how we approach defense policies. I will welcome the
chance to review Secretary Rumsfeld's report, and I hope we get
it as soon as possible. I commend you both for your willingness
to serve our Nation.
I have to confess that my State perpetrated a little
larceny as far as the Air Force is concerned this year. I was
one of those who conspired to offer a position to former
General Pat Gamble when he retired from his post as the
Commander of the Pacific Air Forces to come home to Alaska. We
have welcomed him, one of the significant portions of our
State's economy in terms of transportation, as the head of the
Alaska railroad. Your loss is our gain, and we are pleased to
have a chance now to work with General Beggert, the Pacific Air
Force (PACAF) new Commander. We will have to see if we cannot
lure him up to Alaska in a little bit.
Senator Inouye. It is our turn.
Senator Stevens. He is your guy. All right. We will steal
him again.
I do want you to know that I am a little worried, as an ex-
pilot of the Armed Services, about the status of training and
our capability to retain pilots into the future.
So we look forward to working with you on these and other
matters, and again, Mr. Chairman, my congratulations, and I do
not need to renew my pledge of fidelity. It is there.
Thank you very much.
Senator Inouye. Senator Cochran.

STATEMENT OF senator THAD COCHRAN

Senator Cochran. Mr. Chairman, thank you. Let me first
congratulate Chairman Inouye on the occasion of his assumption
of duties as chair of this committee. It has been a pleasure to
work with him closely over the years, as it has with Senator
Stevens, who has also chaired this subcommittee.
It is a pleasure to welcome Secretary Roche and General
Ryan. We appreciate you being here and cooperating with our
effort to fully understand the budget requests that are
submitted to this subcommittee. We know that the supplemental
will probably have requests for funding. I know the importance
of the airborne laser program is one that has attracted
attention from me and my staff. We are interested in hearing
your thoughts about that program and what the future holds. We
think it has great potential for protecting the security
interests of this country.
We are also very proud, in my State of Mississippi, to be
the home for two important Air Force active duty bases, Keesler
Air Force Base in Biloxi and the pilot training facility at
Columbus Air Force Base. We also have the honor of being the
State with the first Air National Guard unit to receive the C-
17s. We are preparing for that. We understand the Air Force is
fully supportive of this initiative. We hope that you will keep
us advised closely of any training aides, or any Military
Construction (MILCON) projects that we need to be aware of so
we can provide the resources for that unit to do its job as a
home base for the C-17s.
Again, thank you for your cooperation with our committee,
and congratulations to you for your excellent service.
Senator Inouye. Thank you very much, and now it is my
pleasure to call upon Secretary Roche.
Dr. Roche. Thank you, Mr. Chairman, and Senator Stevens,
Senator Feinstein----
Senator Inouye. I did not see you come in.

STATEMENT OF senator DIANNE FEINSTEIN

Senator Feinstein. That is all right, Mr. Chairman.
Congratulations, and welcome, gentlemen. I am very happy to be
a new member of this committee, and I look forward to
participating.
I want to just share with you my initial observations about
the Air Force. I think Operation Desert Storm, and then
Operational Allied Force, and the performance of the Air Force
in Kosovo, really underscored its capabilities for waging high
technology warfare, and I think looking ahead it is fair to
conclude that the strategic environment for the next decade,
and the threats and the challenges that may face the United
States, are not the same as the last decade.
Secretary Rumsfeld has suggested that we need a new and
integrated military posture for Asia, and I think that raises
questions about what sort of Air Force structure needs to be
developed and deployed consistent with this new posture and
also adequate to meet the challenges of the Asia Pacific
region. Obviously, I am a Californian. We in the West look
West. People in the East seem to look East.
Now the Air Force is in the midst of a major modernization
and transformation effort, including the development of the F-
22, the Joint Strike Fighter, and the development of stand-off
smart weapons. How, at what pace, and at what price this
modernization program proceeds is going to impact Air Force
capabilities.
So also, given the importance and, I think, growing
importance of intelligence in both war and peacetime
operations, there are significant challenges that face the Air
Force in assessing the right mix of existing planned, manned
and unmanned intelligence, surveillance, and reconnaissance
aircraft to most efficiently satisfy requirements for timely
and accurate information.
And then finally, there are the quality of life issues that
need to be addressed, adequate funding for military
construction to make sure the Air Force has the highly skilled
and qualified personnel it needs, and that that personnel is
able to maintain a very high morale.
I understand that with the strategic review still not
complete we may not be able to get all of the answers to our
questions today, but these are the areas that I want to discuss
with you, and we have prepared specific questions in each one
of them.
Thank you very much, Mr. Chairman.
Senator Inouye. Thank you very much, and now, Mr.
Secretary.
Dr. Roche. Thank you, Mr. Chairman. Mr. Chairman, Senator
Stevens, Senator Feinstein, Senator Cochran, I am honored to
appear before you today for the first time as Secretary of the
Air Force.
I am also mindful this is the 57th anniversary of Operation
Overlord in Europe. It is my sincere hope that this first
hearing will mark the first of many meetings between us where
we can work the work of the Air Force, and on behalf of the men
and women who serve the Air Force.
With your permission, Mr. Chairman, General Ryan and I will
make some very short remarks, and request that our joint
written statement be submitted for the record.
Senator Inouye. Without objection, it will be made part of
the record.
Dr. Roche. Thank you, Mr. Chairman.
Mr. Chairman, I myself will try to answer any questions you
or the members may have of me to the best of my ability,
recognizing that I have only been on the job for a few days,
and I have only been asking the most important questions that a
former naval person would ask, where is my bunk, when does the
chow line open, and when do I get paid?
In all sincerity, Mr. Chairman, although I am the
tenderfoot in the room today when it comes to developing and
defending this next year's budget for the Air Force, I do not
expect to remain so for very long. In the meantime, I have full
confidence in General Ryan and our truly dedicated and bright
Air Force team to answer all of your questions, issues, and
concerns. My pledge to you is that during my tenure, we will
work until we have provided you with the best possible answers
we can give.
Before I turn it over to General Ryan, I want to say how
excited I am to have this job, to be the Secretary of the Air
Force, and how honored I am to have a chance to work alongside
a thorough professional, someone who I enjoy as a person, as
well as a military leader, and that is General Michael Ryan.
He, Mr. Chairman, is a class act. I cannot think of a better
Chief to train a new Secretary of the Air Force.
Mr. Chairman, I want to thank you for this opportunity. I
also want to thank you for your support of America's Air Force.
The relationship between this committee and the Air Force has
been key to our past successes. Maintaining and building upon
these relationships I believe will be the core enablers of our
future accomplishments. I look forward to working with you and
the members of the committee and your staffs to help shape a
very bright future.
Thank you very much, Mr. Chairman.
Senator Inouye. Mr. Secretary, I agree with you that
General Ryan is a class act, and with that in mind, General.
General Ryan. Chairman Inouye, Cochairman Stevens, members
of the committee, before we get started, I would like to thank
Dr. Roche for his commitment to serve as the Air Force
Secretary. Although we have worked together officially for less
than a week, I want to say how much I appreciate his expertise
and his thoughtfulness.

READINESS

I also want to thank the committee for all you have done
for the men and women in uniform over the past 4 years that I
have had the privilege of being the Chief of Staff of the Air
Force. During that time, we have seen a drop in readiness that
has concerned us all.
With your help, we have been able to arrest that decline,
but much more needs to be done to regain our edge across the
board. We still need your help to attract the highest quality
individuals into the military service. I am happy to say this
year we are making our recruitment goals, both in terms of
quality and quantity. Our major challenge is retaining our best
and brightest to stay with us for a career. Your help over the
past years on pay, retirement, and health care, has been much
appreciated.

QUALITY OF LIFE

Quality of life issues are terribly important to attract
and retain great people, but also so is quality of service, and
when I speak of quality of service, that addresses the need to
assure that we give our airmen the proper tools to do the tough
jobs we ask them to do in places like Kuwait and Saudi Arabia
and Turkey, and the no-fly zone enforcement, where combat
occurs on a daily basis, and the same is true in the Balkans
and Korea.
Quality of service is not just about equipment with which
they operate, but the hangars and buildings and shops in which
they must work. We all know quality begets quality, and as you
know we have underfunded our capital equipment and our
infrastructure for too long, and we must turn the aging problem
around.
In summary, I look forward to working with Dr. Roche,
Secretary Rumsfeld, and the Congress as we work our way through
the ongoing strategic review, the quadrennial defense review,
and the budgets we will submit to you in the coming months. I
know together we can make a great difference for this Nation as
we continue to rebuild your Air Force to meet the challenges of
the 21st century.
Thank you, sir.
[The statement follows:]

JOINT PREPARED STATEMENT OF HONORABLE JAMES G. ROCHE AND GENERAL
MICHAEL E. RYAN

Mr. Chairman, members of the committee, we thank you for the
opportunity to come before you on behalf of the dedicated men and women
of the finest aerospace force in the world. Over the past year, your
Air Force has continued to protect our nation's interests across the
full spectrum of operations. From contingency operations to
humanitarian assistance, aerospace power has been crucial to theater
commanders for providing quick and decisive actions in support of our
national interests. It has been almost two years since we instituted
the Expeditionary Aerospace Force--the EAF--allowing us to continuously
assign and deploy Aerospace Expeditionary Forces (AEF) around the
world. Today, we have almost 87,000 airmen serving overseas, to ensure
the security of the United States.
Although we have the highest quality force in the world, we have
significant concerns for our future. Recruiting and retaining the
people we need is difficult in today's competitive economy. Aging
aircraft and infrastructure have challenged our readiness. And, we must
evaluate our future organization, concepts of operation, and
capabilities in consideration of the changing global security
environment. To address these challenges, we must recapitalize and
modernize our force through emphasizing science and technology,
improving our partnerships with industry, expanding our capabilities in
space, and becoming more efficient in all of our efforts.

PEOPLE

Everything we do depends on the integrity, selflessness, and
excellence of our people. Maintaining the right mix of both our
uniformed and civilian personnel is essential to our success and our
future. Your continuing support of our recruiting initiatives has
helped us meet our recruiting goals without lowering our standards.
That support included bonuses, adjusted pay initiatives, retirement
reforms, and improvements in medical benefits, which helped us achieve
our fiscal year 2000 recruiting goals, and has kept us on track again
this year.
Although recruiting is important to the Air Force, we are primarily
a retention-based force because we rely heavily on our highly skilled
and technically experienced people. Consequently, our enlisted
retention goals are the highest among the Services. With your support
we have extended reenlistment bonuses, increased housing allowances,
and expanded the Montgomery GI Bill benefits, helping us successfully
turn the corner on first-term enlisted airmen retention--rates have
been at or above our 55 percent goal for seven consecutive months.
However, we must focus on achieving our second-term and career
reenlistment goals. Shortfalls in these two categories have produced
gaps in experience that reduce both the ability to perform our day-to-
day mission and the capacity to train new recruits. We believe the
stability and predictability provided by our AEF rotation schedule,
together with initiatives in pay and benefits, will move us closer to
our retention goals.
We've made progress on retaining our officers as well. In January,
we were short by over 2,200 officers, but we are now on track to reduce
that shortfall to 1,600 by September. Additionally, the aviation
continuation pay program you supported, along with an overall reduction
in our requirements for rated staff officers, has kept our pilot
shortage at 1,200, even though the airlines have stepped up an already
aggressive hiring campaign.

READINESS

We want to again thank the administration, Congress, and especially
this committee for responding to the most crucial needs of the Air
Force. You increased our funding to address some of our most immediate
readiness concerns this past year, enabling us to arrest our recent
readiness declines. Your support of the fiscal year 2001 supplemental
will further help us maintain our readiness levels. However, we still
need your continued support to improve our readiness.
Your United States Air Force is currently operating and maintaining
the oldest fleet in our history. On average, our aircraft are about 22
years old, and getting older. An aging fleet costs more, both in effort
and dollars, to operate and maintain. Last year, while we flew only 97
percent of our programmed hours, they cost us 103 percent of our
budget. Over the past five years, our costs per flying hour have risen
almost 50 percent.
aging infrastructure and physical plant recapitalization
Maintaining our infrastructure and physical plant is another
significant challenge. Over the past decade, constrained resources and
competing requirements have forced us to use infrastructure as a bill
payer. Your military construction budget adds have helped, but still
leaves our plant replacement rates far short of the industry standard.
Today, our military family homes average 37 years old, while our plant
facilities are 40, and we have a real property maintenance backlog of
$5.6 billion. The growing repair costs of our aging facilities directly
affect our ability to provide a quality work environment for our
people, further contributing to our retention and readiness challenges.

MODERNIZATION

As noted above, our aircraft are getting older. In fact, in just 15
years their average age will be nearly 30, even if we execute our
planned modernization program. Old aircraft need more frequent and
substantial repairs, driving up readiness costs. This, in turn, reduces
the number of aircraft available for missions, making higher demands on
the remaining fleet. Our space-based systems, space launch systems, and
space ranges are caught in a similar vicious cycle.
Pending the results of Secretary Rumsfeld's strategic review, we
need to aggressively modernize our capabilities. Advances in continuous
global surveillance, directed energy, and unmanned aerial vehicles will
be coupled with our ongoing aircraft, precision-guided munitions,
information, and space initiatives to radically enhance the application
of aerospace power. The Air Force of the future will continue our
tradition of innovation to assure we can meet and exceed the
expectations of the nation.

CONCLUSION

In the short-term, we are challenged by the problems of recruiting
and retaining a quality workforce in a competitive economy and
improving our readiness impacted by an aging fleet and decaying
infrastructure. In the long-term, working with you, the Office of the
Secretary of Defense, and the other Services, the Air Force will
evaluate the most appropriate aerospace strategy for the evolving
security environment. We will find better ways to organize, while
improving the effectiveness and efficiency of our processes, including
leveraging the best business practices found in both government and
industry. Finally, the Air Force must pay special attention to the
shrinking military-industrial base and evaluate ways to improve its
current acquisition processes.
The statements made in this testimony are contingent upon the
results of Secretary Rumsfeld's strategic review. We ask you consider
them in that light.
______

BIOGRAPHICAL SKETCH OF DR. JAMES G. ROCHE

Dr. James G. Roche is the 20th Secretary of the Air Force. In this
role, he is responsible for the affairs of the Department of the Air
Force, including the organizing, training, equipping, and providing for
the welfare of its nearly 355,000 men and women on active duty, 180,000
members of the Air National Guard and the Air Force Reserve, 160,000
civilians, and their families. As head of the Department of the Air
Force, Secretary Roche is responsible for its functioning and
efficiency, the formulation of its policies and programs, and the
timely implementation of decisions and instructions of the President of
the United States and the Secretary of Defense. With an annual budget
of approximately $71 billion, he ensures the Air Force can meet its
current and future operational requirements.
Prior to this appointment, Secretary Roche held several executive
positions with Northrop Grumman Corporation, including Corporate Vice
President and President, Electronic Sensors and Systems Sector. Prior
to joining Northrop Grumman in 1984, he was Democratic Staff Director
of the U.S. Senate Armed Services Committee.
Secretary Roche's previous military service spanned 23 years in the
United States Navy, retiring with the rank of captain in 1983. As a
naval officer, his assignments included Principal Deputy Director of
the State Department's Policy Planning Staff; Senior Professional Staff
Member of the Senate Select Committee on Intelligence; and Assistant
Director for the Defense Department's Office of Net Assessment. He
commanded the U.S.S. Buchanan, a guided missile destroyer, and was
awarded the Arleigh Burke Fleet Trophy for the Navy's most improved
combat unit in the Pacific in 1974.
Secretary Roche has served as a member of the Secretary of
Defense's Policy Board and is a member of the Council of Foreign
Relations and the International Institute of Strategic Studies. Dr.
Roche has been awarded various campaign ribbons and military medals,
including the Legion of Merit.

RECRUITING

Senator Inouye. I thank you very much. General, one would
expect the committee to begin its inquiry with weapons systems,
but Mr. Secretary, we believe that the most important element
in the Air Force would be the personnel.
In fiscal year 1999, we had problems in reaching the mark.
In fiscal year 2000, we did meet our mission, but at extra
cost. I note that in the budget there is a request for $33
million. Can you tell the committee what sort of new program
you may have in recruiting and retention?
Dr. Roche. Mr. Chairman, I will defer to General Ryan on
what may be in the budget. I can tell you that my second goal--
when I was confirmed I had four principal goals, one was to
work with the Air Force to adapt a strategy for this
millennium. This is the first year of the new millennium. The
second was careers, because I believe if we can work on the
retention problem we will also be helping our recruiting
problem.
We are losing people in mid-career, and that means that we
have to address that. This committee and the Congress has
helped in financial terms. I think there is more we can do in
terms of career planning, mentoring, a number of other things,
and General Ryan and I are of one mind on this. We are both
seized with the fact that we invest an enormous amount of time
and money in these very high caliber people. We cannot have
them leave us. We just cannot have them leave us the way they
are leaving us, and so we intend to make this a major effort
for the Air Force in the next couple of years.
Principally on retention, we believe a force that retains
is a force that will attract.
Senator Inouye. General.

SUPPLEMENTAL APPROPRIATIONS

General Ryan. Yes, sir. In speaking directly to the
question on supplemental increases we asked in the area of
personnel, people programs, was a very large request in that
supplemental--$400 million to take care of our health shortages
that we had this year, payment for health needs.
Also on the people side, it went toward our basic allowance
for housing (BAH) that we need to continue to fund, along with
offering bonuses to many of our folks that we have a hard time
retaining--quite honestly, using those budgets to supplement
their incomes to attract folks to stay for a second and third
tour in the United States Air Force.
We also had upped the number of recruiters and recruiting
programs. So that is primarily where that money is focused.
Senator Inouye. I was just advised that the joint
leadership of the Senate wants all of us to assemble in the
Senate by 11:15. I believe there is an important announcement
on reorganization, but we will continue here.

F-22

May I inquire about the F-22, General? It is still the
cornerstone, I believe, of Air Force modernization. We have had
cost problems, test problems, uncertainty as to the total
number. What is the present situation? I realize we do not have
the budget request before us, but what do you believe we can
anticipate?
General Ryan. Yes, sir. Currently, the program is
structured around the buy of 339 aircraft, F-22s. We are
studying in this strategic review the number of those kinds of
capabilities that we need for the future, and what will meet
those needs.
As you know, the F-22 is a huge leap in capability, an
airplane that can supercruise at well above 1.5 mach, has very
good legs, has stealth capabilities that are revolutionary, so
the need for this airplane I think is very clear. The numbers
will be the question as we go through this review.
It is in testing right now, as you know, and doing very
well. In fact, its signature, its capability to supercruise,
its avionics capability, and its aerodynamics capabilities are
right on the mark, as we predicted them, in fact, are better.
We are behind in testing, but testing is something you do
not want to rush. It is not something that you put a time line
to. What you do is, you put events to, get through events so
that you do this very structured way, and so I think the
program is in very, very good shape. We are behind in testing,
but we are not going to rush that at the expense of safety, or
missing something as we develop this airplane.
Dr. Roche. If I may, Mr. Chairman, I absolutely agree with
General Ryan, the F-22 has the character of really altering
war. It is the first time we have had the capability to be over
an enemy's territory for any length of time, and because of
supercruise and dramatic avionics, to be able to clear the
skies. We think that will be important for the long run. Also,
it will have the capacity to do certain attack missions which
will be rather unique.
The test program has been reviewed because of the cost caps
in the Engineering and Manufacturing Development (EMD) part of
the program, and once reviewed, an outside group was brought in
to take another look at it, and we felt, and General Ryan and I
completely agreed, to add back different tests in order to make
sure that this system is exactly the way it ought to be for the
price that we are paying for it and for the program in general.

F-22 TESTING PROGRAM

Senator Inouye. Not wishing to rush the testing program,
but about how long do we have to wait?
General Ryan. Well, we will probably be delayed in our EMD,
which was supposed to end its testing in the November time
frame. We think we are going to be 6 to 7 months delayed to get
through all the test points that we thought were important to
make sure it was ready to go into operational test and
evaluation. That is about the magnitude of the slip.
Part of that is due, quite honestly, to the fact that we
received the aircraft late for a number of producibility
reasons, but that is the reason that you go through the
engineering and manufacturing stage, to make sure you nail
those before you bring this airplane on in production, and we
think we have it pretty well nailed now. We just want to make
sure this testing is done to the degree that we have great
confidence that the airplane will be produced as the great war
machine it is going to be.
Senator Inouye. Thank you. Senator Stevens.
Senator Stevens. Thank you, Mr. Chairman.

C-17

As I indicated in my opening statement, I am a little
worried about the C-17. We originally thought we were going to
get 210. I think we have got somewhere around 80 now. We had a
procurement rate for this fiscal year of 2002 that we are
working on, 15, but I am told that the outyear profile
indicates just 9 for 2003, 4 for 2004, and then back up to 8 in
2005. The stability of that line, it worries me a great deal,
and I wonder about that.

MOBILITY REQUIREMENTS STUDY

My staff tells me that the mobility requirements study for
fiscal year 2005 established a 54.5 million ton mile per day
requirement, against a Department of Defense (DOD) capacity at
the present time of 49.7, if it had 127 C-17s. In fact, the
outside study says that probably we would require another 50 in
addition to the 120.
Further, I am informed Boeing has offered to sell the Air
Force 60 C-17s on a multiyear procurement at a rate of $152
million per aircraft, a favorable rate compared to the past.
Have you got currently, General, an estimate of the
requirements in this period of time that we are talking about,
fiscal years 2002 through 2005? What do you think the
requirement really should be?
General Ryan. Yes, sir. The number you quoted out of the
mobility requirement study 2005 was derived by looking at two
major regional contingencies and then seeing what kind of
airlift requirement during the search periods were required to
be able to fight those regional contingencies with a high
expectation of winning.

MULTIYEAR PROCUREMENT

The number of aircraft we currently have in the program are
120 on a multiyear procurement and then another 15 that we have
added to the budget but have not been able to go forward yet
and get a multiyear procurement on, and the reason we have not,
and we need to do that this year, is the additional requirement
that driving us from the 49.7 to the 54.5 million ton miles per
day has produced.
Quite honestly, that number is almost independent of two
near simultaneous, because we do not have an airlift force
structure that can do two wars at once. We have a one airlift
force, and so whether in our strategic review we change the
paradigm from two major contingencies to one, and a series of
smaller conflicts, will probably not make much of a difference
in the demand for airlift at the high end and high time during
these conflicts. So as we work our way through here, we are
looking at how many more C-17s we would need to meet that
requirement. For every, about 0.1 million ton miles per day,
you can add a C-17, so 50 is not off the mark if you want to
meet the total requirement.
We do not meet the total requirement in a lot of other
places where we have specified it, so this will be, for us,
during the strategic review and then during the Quadrennial
Defense Review (QDR) that follows, one of the main topics of
how much more airlift can we afford, how much more do we need,
and what are the risks between those two?

MULTIYEAR PROCUREMENT SCHEDULE

Senator Stevens. Have you had a chance yet, Mr. Secretary,
to take a look at this question, and what we should do about
the offer of Boeing on the multiyear procurement schedule?
Dr. Roche. With respect to this particular offer from
Boeing, Senator Stevens, I have not, but I have looked at the
C-17 program in general, and it is a very good program. The
plane is doing very, very well.
One of the things that Secretary Rumsfeld is having us try
to think through is, if we go and look at just the two Major
Theater Wars (MTW's) it tells you one thing, but in fact our
forces are being used in other ways, as well as having to be
prepared for that, and the sizing criteria may be more
appropriately done if we pick up some of these other
requirements to be in Northern Watch, Southern Watch, Kosovo,
et cetera.
My sense is that airlift will be something that will not be
shunted in this. It is one of those capabilities that is in
great demand, and our sense is the C-17 is a winner, and I
think that we would like to look for more of them.

AIRLIFT REQUIREMENTS OF OFFSHORE STATES

Senator Stevens. Gentlemen, the chairman and I come from
the Pacific. By just our geographical location we are concerned
about the Pacific. We provided in fiscal year 2001 $3.5 million
for planning and site assessment for both Hawaii and Alaska
major air bases just before stationing C-17 in support of the
rapidly deployed forces in both Hawaii and Alaska.
Mr. Secretary, have you looked at that in terms of this
current strategic review with regard to the airlift
requirements of the off-shore States?
Dr. Roche. No, sir, I have not yet, but clearly as we go
through the Quadrennial Defense Review and if, I believe we
will give the rebalancing to the Pacific that has been
discussed, then certainly that will be an issue and we will be
looking at, and getting back to you on it.
Senator Stevens. Well, General, can you give us an update,
if you do not have it now, for the record, anyway, of the
initiative that was in the 2001 defense bill, and the
infrastructure requirements for the future that would be
necessary for carrying out that initiative?
General Ryan. Yes, sir, and I will get back to you on the
record on what we have done to do the surveys that were in that
request.
Senator Stevens. It seems that our forward-deployed forces
would be stranded forces unless we have C-17 capability. I know
of no other airlift that would be available in the future to
take the forces there on a forward-deployed status into the
Pacific region to meet crises, unless we have C-17s. Do you
agree with that statement?
General Ryan. Yes, sir. How quickly we can--we can get the
C-17s to most locations before the forces can be generated, so
I agree with the statement that we do need to be able to
rapidly move our forward-deployed forces into the areas that we
have planned for them to fight.

C-5

Dr. Roche. But I think the General will agree, Senator,
that it is not just the C-17. We have other assets like C-5s.
We will put personnel in 747s. The whole lift is a large
portfolio of capabilities, but the C-17 is clearly a winner in
this portfolio.
Senator Stevens. The C-5s are not on either Hawaii or
Alaska, either. They would come in from Nebraska.
Dr. Roche. But they would be bringing a lot of stuff from
CONUS going forward, too, sir.
Senator Stevens. But our forces are in Hawaii and Alaska,
forward-deployed to go out to the crisis first.
Dr. Roche. Yes, sir.
Senator Stevens. Unless we have some airlift, what is the
use of having them there?
Dr. Roche. We agree, sir.

KC-135 TANKERS

Senator Stevens. On tankers, I am also a little worried
about the tanker situation. We currently have 550 KC-135
aircraft, about one-third of that fleet is in the depots for
maintenance repair, one-third of the fleet is nonmission
capable on any given day because of the ages of the 135, both
age and corrosion and depot-time and costs are exceeding the
Air Force's projections now by a factor of three. It really
means we are spending more on these aged aircraft, on keeping
them going, than we would spend if we started a line to procure
new tankers.
Boeing again--and I am no stockholder in Boeing. They used
to be my neighbor. They are moving now, as a matter of fact,
but they are offering the 767 tanker, which has a great
potential for the future. What about that, General Ryan? What
is the challenge of the KC-135 maintenance, and aging
situation, and what do you think about a commercial derivative
tanker?
General Ryan. Yes, sir. First of all, the aging issue. The
average age of our KC-135 fleet is 38\1/2\ years old. They were
built over approximately a 10-year period. That means that as
we come to the time when they become no longer viable, it will
happen over a 10-year period. Tankers will be a requirement for
the foreseeable future. I see no technologies out there that
will allow us to decrease the amount of tanker force we need to
project power around the world.
Our 135 fleet is costing us more to put through depot. It
takes us almost three times as long as it used to, because
every time we open the airplane up we find some structural
problems that we need to fix, and we have a vanishing vendor
base for putting onto the airplane older systems that they have
on them today. That is why we have upgraded the airplane in
many ways over the years with a modification we call Compass
Radar and GPS (Pacer CRAG), which did the avionics in it.
We have reengined most of them with the CFM-56 engine, but
this airplane eventually is going to have to be replaced, so we
are looking out in about the next 15-year time frame to begin
that replacement. We have an offer from Boeing that was given
to us on a 767 derivative, which we are evaluating.

BOMBERS

Senator Stevens. Mr. Chairman, I could go on and on on this
problem. The bomber situation is the same. We are still
maintaining the B-52s that Harry Truman fought the Congress
over and bought, and we have cut down our B-2 line to a
perilously low figure. I think it is closed now almost, is it
not?
Dr. Roche. It is closed.
Senator Stevens. No new production, and yet it is clear
that the cost of trying to maintain these aging aircraft across
the board for our Air Force are eating our lunch. We are not
getting anything new, and it is costing more and more to repair
the old ones.
I hope that this review that the Secretary has going on
really emphasizes, really looks at and emphasizes the problem
of aging aircraft, and our readiness capability. One-third of
the tankers cannot get off the ground, and you do not have
enough to start with. I think that is probably--the aging
problem for our Air Force is, next to the pilot retention
problem, the two greatest problems for the Air Force. I hope we
can work together on it.
Thank you, Mr. Chairman.
Senator Inouye. Thank you. Senator Cochran.

AIRBORNE LASER PROGRAM

Senator Cochran. Mr. Chairman, thank you. I mentioned my
interest in the Air Force's Airborne Laser Program, and I would
like to have your reaction to the importance of that program to
our Nation's security. I also note that the supplemental has a
request in it for $153 million for the program. In part it is
to pay for additional costs that were sustained because of a
technical problem that has now been overcome, I am told, and
also in part to pay for work that has been moved forward on the
schedule.
They are projecting an intercept effort in fiscal year 2003
time frame to keep that program on schedule. I understand that
we need to try to make up for some of the cuts that had been
imposed on that program in the last administration. Some $500
million had been removed from the outyear budget projections.
What is the need, as you see it, for our support for this
program to keep it on schedule and to help make sure that it
maintains the goals that have been set for it by the
programmers?
General Ryan. Yes, sir, as you know, we did in the
supplemental put in 153 more for the airborne laser. We think
it is a revolutionary capability. We think to be able to put a
high-powered laser, to be able to acquire, track and destroy
missiles in their ascent phase is terribly important to future
capabilities in defense and force protection.
We also think it may have some other capabilities, too,
that we have not really addressed, and so far we think we know
the physics of all this. It is the engineering that we are
struggling with as we build the first prototype to be able to
have the shoot-down that you mentioned in, we say calendar year
2003. That gives us a little more wiggle-room on the back end,
but we certainly want to do that and hold to that schedule, and
hence that is the reason that we put more money into it.
We think this is revolutionary capability, and it also
helps us with other kinds of applications of directed energy,
because the pointing, tracking focus of the energy can lead us
down a lot of paths that will revolutionize some of the ways we
wage war.

X-33 SPACE PLANE

Senator Cochran. There is another program that has been
supervised and operated by the National Air and Space
Administration (NASA) up to now--it is the X-33 program. It is
the space plane, so-called by some--the engine testing occurs
down at the Stennis Space Center in Hancock County,
Mississippi. It seems to me that this is a program that affords
the Air Force an opportunity to assume stewardship of a
program. NASA has not got a proposal for continuing this
program, even though it is 75 percent complete. Ninety-five
percent of the parts for the space plane have been delivered.
The investment to this point is $1.3 billion.
What I want is your reaction to having the Air Force assume
stewardship of this program, and carry it forward. Mr.
Secretary, do you have any opinion about that at this point?
Dr. Roche. I have two preliminary opinions, Senator. One is
that in capability, this could be a very interesting system.
This is the sort of research you do now that you work on for a
very long time in order to develop a capability. It is an
investment in the long term future. It has to trade against
other priorities. Mr. Goldin and I are going to be meeting on
this, and I am sure this will be one of his main topics in the
next couple of weeks.

PILOT TRAINING BASES

Senator Cochran. My last question has to do with pilot
training bases. When we went through the last base closure
round, Base Realignment and Closure (BRAC), we were told that
the base at Columbus, Mississippi, was the number one pilot
training facility in the country, according to the Air Force,
and there are now three bases being used by the Air Force for
training pilots. I am told that there is a shortage of pilots,
that we have classes that are full. The special under graduate
pilot training bases are operating at maximum capacity right
now.
What occurs to me is, if we have a base closure round,
would the Air Force consider suggesting that there be certain
classes of facilities that would not be included in the request
for closure?
I mean, if we know going in that we have a shortage of
facilities for trained pilots, why would you put a pilot
training facility at risk for having to go through the agonies
that these communities go through to say this is an important
facility, the community supports it and all the rest, when we
already know all that? Why go through the business of the
stress and strain of base closure with those facilities? Could
you not just exclude them as a class?
General Ryan. First, you are absolutely correct, Senator,
that we are in a pilot deficit in the United States Air Force
to the tune of about 1,200 pilots, about 9 percent short. We
are at mass production now on pilots, with the infrastructure
that we do have in our training bases. We will continue to
produce pilots, because it is not only an Air Force need, I
believe it is a national need, and Senator Stevens and I have
had this conversation about the national requirement for
pilots.
On the base closure side, I think that we need to look at
not just the present, but well out in the future, if we do have
a base closure round, to make sure that the bases that we have
meet all the requirements we need for the future, and that is
nonencroachment by housing, places to operate the aircraft in
air space that is near the air base, having ranges that are
close by that we can operate in and that we can figure for the
next 50 or so years we will be able to operate those bases, so
we take all that into account as we look at the training bases.
The training bases, for sure, are very, very important to us.
Senator Cochran. Thank you, Mr. Chairman.
Senator Inouye. Senator Feinstein.
Senator Feinstein. Thank you very much, Mr. Chairman.
Mr. Chairman, if I might, I have got 22 questions. I would
like just to submit them to you and perhaps the General could
answer them at his convenience, which hopefully will not be too
long off.

NEW THREATS AND MISSIONS

General, let me ask you this question. How do you
characterize the new security environment, the new threats, the
missions that the Air Force might face in 2015, 2020, using the
last decade as a frame of reference? What additional
capabilities, what additional changes in posture or structure
do you feel will be necessary to assure that the Air Force can
perform at high level?
General Ryan. First of all, if you go back 15 years, you
would find it very hard to find any consensus on the prediction
of what would happen in the next 15 years.
Senator Feinstein. But take the Balkans, take the Middle
East as examples of use in a regional conflict.
General Ryan. Right. I would say that we lost our reliable
enemy against which we force-structured during that time, the
fall of the wall, the crash of the curtain. We never predicted
that we would be in a major theater war in the desert. We
certainly did not predict that we would have two major air
operations that occurred right in the middle of Europe, in both
Bosnia and Kosovo. We never thought that we would be in those
locations still.
So predicting what is going to happen in 2015, I think
takes a lot more than a ouija board and looking back on the
past decade, but the past decade does give us some clue about
the kinds of capabilities that we will need for the future.
I think there is no question that this Nation of ours will
be involved worldwide globally in its economy, and our
prosperity will depend on the stability of this world, that of
not only the United States but our allies and our friends and
trading partners, and that we, the superpower, will be called
on in the future, in a very uncertain future, to try and quell
conflicts and fight wars, if necessary, and so our ability to
move rapidly is, I think, the first piece of a capability-based
strategy for the future, and our ability to have systems that
can operate across the spectrum, from humanitarian operations
all the way to major theater wars are terribly important.
Our ability to reach far will be important, our ability to
have vigilance around the globe will be important, so it is
those kinds of systems that we are looking at in this
Quadrennial Defense Review we are about to enter in the
strategic environment. I think that aerospace power will play a
very large role in that future world no matter where the
challenges come from.

TERRORISM

Senator Feinstein. Let me ask you to include in that an
asymmetrical threat, irregular force, militias, terrorists--I
serve on the Technology and Terrorism Committee, and on
Intelligence--and one of the issues that has been emerging in
reports is a very deep concern about the impact of terrorism in
the future in the United States. What role do you see the Air
Force playing to prepare for such a thing?
General Ryan. I think that we do have a huge threat that is
very hard to define, because we are an open Nation. Our
security precautions are balanced against the rights of the
individual in this Nation to have the freedoms that this
Congress has given them.
I think that it will be terribly important that we in the
future are able to focus on groups, and provide information on
these groups around the world, to be able to have the tell-tale
signs that something is going to occur. I think that those
kinds of abilities, and then dealing with them as the event
approaches, moving rapidly to stop it, to prevent it, to deter
it, will be issues that we have to put a lot of thought to
because of the balance against the freedoms that we have in
this Nation.
The Air Force's involvement in that will probably be, quite
honestly, in the rapid movement to different areas, whether it
is to deter it, to quash it, or to deal with the consequences
of a terrorist act in this Nation.
Dr. Roche. Senator, if I may.
Senator Feinstein. Please, Mr. Secretary.
Dr. Roche. I agree with General Ryan. It is interesting,
the number of questions you have asked, and the last two
questions, are key ones that Secretary Rumsfeld has been asking
both of us and our colleagues to grapple with, including the
asymmetric ones and terrorism, and this is terrorism outside,
this is terrorism inside. What do you do if something happens
inside the United States? What is the role of the military in
what is otherwise thought of as a police action? How can we
support other agencies?
But it is clear that the business of the Air Force is
global reconnaissance and strike, and while we do not talk
about it very much openly, our space programs, and the Air
Force space programs, and now we are the executive agent for
the building, for the Pentagon in space, we will be providing a
lot of intelligence, a lot of situational awareness to
ourselves and to the other services and to decisionmakers, so
the Air Force's role in this subject is, in fact, going to be
an increasing one, not a decreasing one, and then we will have
situations where the strike part of global reconnaissance and
strike may be called upon by the President and we will be
prepared to take that action, too.

B-2

Senator Feinstein. One last question and then I will
desist. I followed the B-2 with some interest, and followed its
work in Operation Allied Force. What is your assessment of the
performance of the B-2, and has this assessment in any way
changed the way the Air Force is thinking about the role that
the B-2 may play in the future?
General Ryan. Our assessment was, the aircraft performed
almost flawlessly. It was able to perform a mission 32 hours in
duration, flying a round robin from the United States to Kosovo
and back, and executing very, very well. It is a centerpiece,
quite honestly, of our capability to project power now, and it
will be in the future.
Senator Feinstein. The reason I asked is, you know, when I
came to the Senate, it was: ``the silver bullet,'' and then
that dropped way to the bottom shelf, and maybe cost was part
of that assessment, but it no longer was a priority for the Air
Force. Are you saying that it has become a priority for you?
General Ryan. It is a centerpiece of our current force. We
have 21 B-2s operating in the force today. They are in every
operation that we conceive in the future, where we have major
combat. It will be part of that force.
Dr. Roche. And, ma'am, there are extensive upgrades being
planned for the B-2 both in avionics, and also to put smart
munitions on board.
It is in the not-too-distant future where 10 of these
aircraft can drop an enormous amount of weaponry in one pass,
each weapon being very, very accurate, and then we have plans
going even beyond that to smaller, even more accurate weapons,
which will make each B-2 sort of like an aircraft carrier in
the sky in terms of what it can do.
Senator Feinstein. Thank you. Thanks very much, Mr.
Chairman. I appreciate it.
Senator Inouye. Thank you. Senator Craig.
Senator Craig. Mr. Chairman, thank you very much.
Let me ask unanimous consent that my full statement be a
part of the record.
Senator Inouye. Without objection.
[The statement follows:]

PREPARED STATEMENT OF SENATOR LARRY E. CRAIG

Mr. Chairman, thank you for allowing me to submit this
statement and question for the record to the Air Force during
this subcommittee hearing. I would like to congratulate Dr.
James Roche for being newly confirmed as Air Force Secretary,
and thank Air Force Chief of Staff, General Michael Ryan for
the support the Air Force has given not only Mountain Home Air
Force Base, but the research and development initiatives at
Idaho's various universities. I believe that Idaho's shares a
unique partnership with all military men and women, who are
committed to our nation's defense and make daily sacrifices in
the service of their country.
However, our status as a super power shouldn't make us
complacent. Our nation must consider future vulnerabilities. As
national centers of academic excellence in information
assurance, the University of Idaho and Idaho State University
look forward to working with the Air Force in preventing
cyberbased disruption and attacks.
But, let us not forget the accomplishments of our
``gunfighters'' of the 366th wing. We in Idaho our proud of the
Air Force's premier Air Expeditionary Wing, and want you to let
us know if there is anything that we can do to support the
base.
I believe that Mountain Home is key to the Air Force being
able to implement the expeditionary aerospace force structure.
As the home of the Aerospace Expeditionary Forces Battlelab and
the enhanced training range, they are critical to achieving
operational readiness, which is essential to air superiority.
Because of the battlelab, they able to identify and rapidly
proves the value of innovative ideas for the aerospace
expeditionary forces throughout the full spectrum of warfare.
The enhanced training range provides realistic, flexible, and
efficient training scenarios while minimizing environmental
impacts associated with readiness training. I feel that our
training range is a premier air combat range which is
efficient, cost effective, and most importantly, will allow the
men and women of this nation's military to prepare to fight the
next war, not the last, with fewer combat losses through
improved training.
I commend the Air Force for working diligently with the
Federal Aviation Administration; the Federal Department of
Transportation, the Bureau of Land Management, Idaho State
officials, and local land users to ensure that all concerns are
addressed and effectively handled. I encourage you to let me
know if there is anything that I can do to assist the Air Force
with any issues that might come up.
As I have mentioned to Gen. Ryan, in our meeting a few
weeks ago, I am pleased to see that Mountain Home Air Force
Base is being considered for the beddown of the F-22 raptor. I
hope that the Air Force would consider us for the next beddown
location. As the home of the expeditionary aerospace force,
which is the first to deploy anywhere in the world when a
conflict erupts, the battlelab, and the newest and best day-to-
day training range in the United States, Mountain Home Air
Force Base is the most logical choice for bedding down an F-22
unit.
As both of you gentlemen know, the global strategic
landscape is constantly changing. Not only are American forces
required to project themselves further and faster than ever
before, but the threats they encounter are changing as well.
Regional powers such as Libya, Iran, Iraq and North Korea
continue to update their arsenals with new technologies, which
could pose a threat to our forces and to our allies in the
future. U.S. military technology must meet the challenges that
these regional threats could pose.
This is particularly evident in the areas of surface-to-air
missile (SAM) technology and fighter aircraft technology, the
best of which is designed by the Russian Federation and then
sold to some of these regional threats.
That is why it is so important that we support the
production and deployment of the F-22. With its superior flight
characteristics and stealth technology, the F-22 will enable us
to maintain our air superiority, which will serve as an
additional deterrent to potential regional threats. And while
the new Joint Strike Fighter will be a valuable asset in the
years to come, it should not be viewed as a substitute for the
F-22. Therefore I urge my colleagues not to short-order vital
equipment like the F-22.

MOUNTAIN HOME AIR FORCE BASE

Senator Craig. General Ryan, it is good to see you again,
and congratulations, Mr. Secretary. I am pleased you are in
front of us today as our confirmed Air Force Secretary and I
want to invite you to come sit down with me and the Idaho
congressional delegation along with General Ryan in order to
put the final touches on what we think and what I know you know
is a premier training range that has just been expanded in
Idaho at Mountain Home Air Force Base.
We really have not finalized all of the details in working
with some of our Federal land agencies. I want to get those
complete, get the new Director of the Bureau of Land Management
(BLM) in to make sure that it is complete, and that there is no
attempt at further encroachment into that facility, because, as
I think we all know, it is really a grand opportunity both in
air space and good weather flying time, and now with their new
high tech facilities, the capability of the Air Force can
expand through that training. I want to do that, and do that as
soon as possible.
I was at the base last weekend to meet our new commander
and to look at the facilities, to look at the 366 Air
Expeditionary Wing, and all of its flexibility, and I think we
are all pleased with the performance of that facility and that
wing.

F-22 BEDDOWN

I must also tell you that we are preparing to make a very
good case for the next bed-down location for the F-22s. We will
keep putting that on the record as we work with all of our
colleagues, because we see that as a valuable mission and
resource for the Air Force, and I am pleased that you think we
can compete for that mission effectively.
Mr. Chairman, I do have to get to the floor, but I do want
to thank both of you. I look forward to working closely with
you, Mr. Secretary, and getting to know you better, and getting
to have you know the only major military installation in the
entire State of Idaho, Mountain Home Air Force Base, and how
much we appreciate its presence there.
But we thank you and, General, thank you for being here.
General Ryan. Thank you, Senator.
Dr. Roche. Thank you.
Senator Inouye. Thank you very much. Senator Domenici.
Senator Domenici. Thank you very much, Mr. Chairman. I
understand that I missed a marvelous pledge of bipartisanship
that you all have made on behalf of this committee towards the
defense of our country, and I thank you both for that spirit,
and hope that I can be one who is a team player on board.
Mr. Secretary, I do not know you very well, but welcome.
Dr. Roche. Thank you very much Senator.
Senator Domenici. General, it is good to see you again.

BUDGET INFORMATION

Mr. Chairman, have we asked the witnesses when we might
expect the budget information that would permit us to do our
work?
Senator Inouye. Not specifically.
Senator Domenici. Might I ask?
Dr. Roche. Senator, I came to this hearing from another
meeting at the Pentagon. We are trying to put together the
amended budget so as to show Secretary Rumsfeld when he returns
from Europe. I certainly cannot speak for the whole Department
as to when it will come over. I know that there is intensive
work on it right now, for the amended 2002 budget.
Senator Domenici. You understand that the way the budget is
now, that is, the budget plan, you are currently plugged in for
the President's number, but this committee can wait for you to
present the new approaches, at which time they have authority
to accept it all in toto, or sum, and it would be added to
their allowance. That is the way we are expected to do things.
So it seems to me that while it is very important to
rethink the entire military from top to bottom, or whatever is
going on, it is pretty important that we know what is expected
of the Congress this year at a reasonable time.
Dr. Roche. Yes, sir, I understand, and we have a couple of
things going in parallel. We have the supplemental, and the
philosophy the Secretary has asked us to follow is to use the
supplemental to just try and stop any bleeding that there might
be in maintenance, to try to restore the flying hours, deal
with our contractual operations for the most part.

FISCAL YEAR 2002 BUDGET

His philosophy that he has instructed us to work on so far
on the amended 2002 budget is to try to get to a position where
we will not be managing by supplementals year after year after
year, but to try and put things right so as to be on a solid
business foundation for the 2002 budget, and then as to whether
or not there will be decisions associated with the longer run
on programs in the 2002 amended budget, or wait until the 2003,
is something he has not yet decided, but we are striving to put
this on a businesslike basis so that when we come forward with
an amended 2002 budget, we will not have to worry about hitting
you with a supplemental, unless real reasons for a supplemental
come about, sir.
Senator Domenici. Mr. Chairman, I have a summary that I
would like to put in the record, and some questions I would
like to put in the record, and I would assume that with the new
Secretary this has been an opportunity for Senators to brag
about their States in reference to being partners with the Air
Force.
Dr. Roche. Properly so, Senator.
Senator Domenici. I just want to say that I do not want to
do that today, because I would have to take up too much time of
the committee.
I do want, however, to remind both of you that not only do
we have Air Force bases for America here, but we have Air Force
bases where we train Singapore pilots with airplanes.
Dr. Roche. I know.
Senator Domenici. We have a wonderful base where we also
train the Germans.
Dr. Roche. I know.
Senator Domenici. And I am just wanting to lay before you
that when you have got a good thing, do not change it.
When you have got a good thing, if there is more of it, go
ahead and put it where it already is.
Dr. Roche. Senator, I can see that from my days working for
Scoop Jackson, that your persuasiveness has remained as intense
as ever, sir.
Senator Domenici. Yes, and they say I have gotten older,
but that is probably right. I cannot avoid that, but I have
learned a little bit along the way, too.
General, it is nice to see you, and we welcome you when you
visit New Mexico, and look at our three air bases that are
there, plus our laboratories, all of whom work in behalf of the
defense of our Nation.
Thank you, Mr. Chairman.
Senator Inouye. Thank you very much. Ordinarily, as we all
know, these hearings would continue until about noon or
thereafter but, because of the circumstances of this day, we
have been requested to be present in the chamber for the
reorganization. With that in mind, Mr. Secretary,
congratulations on your first appearance, and we look forward
to working with you, sir, and General, it is always good to see
you here.
Senator Stevens. Mr. Chairman--General Ryan, unless we call
you up again, it is your last shot at us.
Senator Inouye. Oh, really?
General Ryan. Yes, sir. My 4-year tour will be over 1
October.
Senator Inouye. Do you want another hearing, because this
was abbreviated.
General Ryan. Sir, you have made up for it in the past.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. We will have another Ryan hearing. How is
that?
General Ryan. Okay, sir. I will be glad to meet with you.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to James G. Roche

Questions Submitted by Senator Dianne Feinstein

NEW SECURITY ENVIRONMENT

Question. The past few years have seen a troubling proliferation of
advanced aircraft defense systems as well as advanced combat aircraft
around the world, including to many ``states of concern.''
What is your assessment of the ability of states of concern to
deploy and use these systems to deny the Air Force access to certain
regions or areas?
Answer. Advanced air defense systems and combat aircraft are highly
sought after by many nations. High cost is the major reason why we have
not witnessed a massive export of these systems. The ability for
``states of concern'' to use or employ advanced air defense systems is
good. The automation and high reliability designed into these systems
allows for relative ease of use. In contrast, concerning combat
aircraft, ``states of concern'' are typically much slower in
integrating the capabilities provided by modern fighter aircraft into
their tactical operations. Technologically, there are or soon will be
combat aircraft and associated weapons that are comparable or better
than the F-16 and F-15, however, most of the ``states of concern'' do
not provide the quality or quantity of pilot training required to take
advantage of advanced capabilities in a freeflowing combat engagement.
Question. What is your assessment of what sort of anti-access
capabilities they may posses ten years from now? Twenty years from now?
Answer. Ten years from now, anti-access capabilities will increase.
Many nations place a high premium on improving their ground-based air
defenses. In the future, advanced surface-to-air missiles (SAMs) will
be more lethal due to increased mobility, better and redundant sensors,
and the capability to conduct multiple target engagements. Ground based
air defense radars will be more difficult to detect and jam and more
capable of engaging low-observable targets. We expect to face SAM
systems that will be capable of engaging conventional aircraft out to
200 nautical miles (NM). These factors will greatly enhance anti-access
capabilities for an adversary equipment with the next generation of
state-of-the-art SAMs.
Twenty years from now, anti-access capabilities will increase
worldwide. The systems that became operational in the previous 10 years
and follow-on SAMs will probably have found wide-spread export markets
in areas of concern. Further, advances in radar development may
challenge today's low-observable aircraft. In contrast, concerning
combat aircraft, ``states of concern'' are typically much slower in
integrating the capabilities provided by modern fighter aircraft into
their tactical operations. Technologically, in the next 10 and 20
years, new advanced aircraft that will be equal to or superior to the
F-16 and F-15 will become operational. These aircraft will be more
technologically capable and lethal with extended ranges, multi-role
mission capability, enhanced air-launched weapons, and multiple target
engagement capability. Advances in sensor technologies will enhance
detection capabilities and provide the enemy with a ``first-look''
advantage over U.S. pilots. Advances in fire control will provide the
enemy with a ``first-shot'' and launch and leave capability. Enemy
first-look and first-shot capabilities will put U.S. pilots at a deadly
disadvantage. Despite these technological advances, most of the
``states of concern'' do not provide the quality or quantity of pilot
training required to take advantage of advanced capabilities in a free-
flowing combat engagement.
Question. What sort of impact will this have on the Air Force's
ability to maintain strategic and/or tactical superiority?
Answer. The development and proliferation of advanced defense
systems and combat aircraft present challenges to the Air Force as well
as joint and coalition operations. Highly decentralized, internetted
defense systems coupled with advanced ``double-digit'' surface-to-air
missiles (SAMs) such as the SA-10, SA-12, and SA-20 create a formidable
wall to our current, non-stealthy aircraft. Penetration of such a
barrier requires large force packages, multiple axes of attack, and
continuous pressure to establish even localized air superiority. From
an airman's perspective, this is a force-on-force symmetrical battle
that costs lives, time, and money.
In addition, advanced combat aircraft around the world continue to
prove worthy against the Air Force's aging combat fighter force, some
exceeding 25 years of service. The Su-27, which became operational in
1986, is in some significant ways, a generation ahead of our F-15 air
superiority fighters. Even more capability is realized in the Su-37, a
modernized version of the Su-27. The French Rafale and Europe's
Eurofighter will arguably prove to be a generation ahead of the Su-27.
The F-22 will skip this generation of aircraft, maintaining a U.S.
technological edge.
To maintain strategic and/or tactical superiority in the face of
this proliferation, the Air Force must leverage the nation's
technological asymmetric advantages of stealth, precision, stand-off,
information and space. Constructs such as the Global Strike Task Force
(GSTF), enabled by a robust modernization effort, will provide a new
asymmetric capability to meet our toughest near-term challenges and
future emerging threats.
The F-22's unparalleled combination of stealth, advanced avionics,
supercruise and internal carriage of air-to-air and air-to-ground
weapons, will reduce both ground/air threats, plus protect other
assets, enabling air dominance. The F-22 will be able to gain entry to
battlespace protected by double-digit SAM systems and for the first
time, enable 24-hour stealth operations. With F-22s and B-2s, the GSTF
will enable the joint team's capability to overcome enemy attempts to
deny access. The GSTF will strike targets such as double-digit SAMs,
theater ballistic missiles, weapons of mass destruction (WMD) launch,
production and storage sites, as well as shore missile batteries. B-2s
in concert with standoff weapons, such as sea and air-launched cruise
missiles, will deliver the first strikes against these high-value
targets.

ASIA-PACIFIC REGION

Question. Secretary Rumsfeld has suggested the need for a new and
integrated military posture in Asia.
What is your assessment of the Asian-Pacific strategic environment,
threats, and current Air Force capabilities in the region?
Answer. [Classified].
Question. Looking ahead, what sort of Air Force force structure
needs to be developed and deployed to meet these challenges?
Answer. The Asian-Pacific region presents significant challenges
for the U.S. Air Force. The great distances in this region imply a
force structure capable of sustaining long-term, long-range engagement
from dispersed bases. Our desired future force structure must enable us
to overcome anti-access threats such as integrated air defense systems,
cruise missiles, theater ballistic missiles, and weapons of mass
destruction. The Air Force will be spearheaded by long-range stealthy
strike platforms escorted by stealthy multi-role fighter aircraft
supported by a robust air refueling capability, high altitude stealthy
unmanned aerial vehicles, robust mobility forces, and robust air and
space based surveillance, communications and navigation capabilities.
To increase lethality, reduce risk to our crews, and preserve combat
capability, our ``shooters'' must be equipped with standoff and direct
attack precision weapons.
To produce the National Command Authorities' desired effects we
will require robust Intelligence, Surveillance and Reconnaissance (ISR)
capabilities combined with a Command and Control infrastructure that
provides near real time ``decision quality'' information to commanders.
As technology allows, we expect ISR and strike capabilities will
migrate from manned aircraft to unmanned platforms and space vehicles.
The transition to space will provide a genuine ``deep look'' capability
that will enhance all facets of ISR as well as providing new options
for fighting at long distances. The Air Force will continue its
aggressive program of building directed energy weapons to enhance
aerospace control against missiles and other threats. As we develop the
capability to process and use tremendous amounts of data, we need to
protect our information infrastructure by engaging in aggressive and
effective Information Operations (IO). Finally, the nation requires
sufficient numbers of forces to establish a rotational base capable of
sustaining regional engagement in Asia as well as elsewhere around the
world over the long haul without ``burning out'' the force.
Question. Some analysts have suggested that operations in the Asia-
Pacific region, if for no other reason than geographic space, dictate
the need for longer range platforms for future force planning such as
heavy bombers and ``arsenal planes'' that could be loaded with a large
number of standoff smart weapons and high speed long range strike
aircraft.
What is your assessment of this force planning issue?
Answer. In general, we agree with this assessment and we continue
to pursue promising technologies for development of precision standoff
munitions and the platforms that could employ these munitions. Part of
this effort is determining the best mixtures of aerospace supremacy and
strike platforms, along with the refueling assets that provide longer
range to all refuellable aircraft as well as the combination of air and
space based Command and Control (C\2\), and the Intelligence,
Surveillance, and Reconnaissance (ISR) necessary to efficiently impact
the right targets with our precision munitions. It is important to
recognize that smaller aircraft have significant advantages in stealth
over larger platforms, yet combined with air refueling can be used over
ranges traditionally thought of as only achievable with bombers. In
addition we are using our various wargame activities to study the
effectiveness of various concepts of operations (CONOPs) that better
exploit both old and new capabilities. One example of this is the
Global Strike Task Force CONOPs--the Air Force component of the Joint
anti-access Global Reconnaissance-Strike CONOPs.
The key to providing Theater Commanders-in-Chief (CINCs) and/or
Joint Task Force (JTF) Commanders the greatest range of possible
options is to leverage longer range platforms and ``arsenal planes''
within new CONOPs tailored to exploit them along with our forward
presence/forward deploying forces and emerging stand-off capabilities.
Question. What current aircraft meet these requirements?
Answer. Our current fleet of heavy, long-range bombers (B-1s, B-2s,
and B-52s) meets these requirements. Our bombers provide the capability
to project combat airpower from the continental United States to
anywhere in the world, as aptly demonstrated by B-2s flying strike
missions from Whiteman AFB in Missouri during Operation ALLIED FORCE.
If necessary, bombers are readily deployable to forward operating
locations in theater. In the Asia-Pacific region, our bombers would
most likely deploy to secure locations as far forward as prudent to
eliminate long transit times.
As you know, our bombers are all capable of delivering a large and
varied munitions payload as well. All three currently drop the Joint
Direct Attack Munition (JDAM), used with great success by the B-2 in
Serbia. Other current or planned bomber standoff weapons include the
Conventional Air-Launched Cruise Missile (B-52 only), the Joint
Standoff Weapon (JSOW), and the Joint Air-to-Surface Standoff Missile
(JASSM). The Air Force is also developing the 500-lb JDAM and the Small
Diameter Bomb (SDB). The capability to upload each bomber with hundred
of SDBs and engage numerous targets per mission will go a long way
towards realizing the vision of an ``arsenal plane'' in the very near
future.
Question. What future aircraft is the Air Force planning on
developing and deploying that will meet these needs?
Answer. As for the near future, the Air Force will initiate the
concept of the Global Strike Task Force (GSTF). B-2s, escorted by F-22s
and supported by tanker aircraft, will launch on short notice and fly
anywhere to ``kick down the door'' of any potential adversary. After
the first strikes, the GSTF will land at forward operating locations
and commence sustained operations. Joint Strike Fighters and upgraded
legacy systems will join the fray until the conflict is successfully
resolved.
For the distant future, the Department of Defense (DOD) and Air
Force constantly review National Military Strategy and update aircraft
requirements accordingly. Air Combat Command is using the Future Strike
Aircraft Study to determine what the next generation attack
``aircraft'' will be--options are not limited to manned air-breathing
bombers. Solutions may include hypersonic trans-atmospheric vehicles,
unmanned combat aircraft or the ``arsenal plane'' you mentioned.
However, the current bomber fleet will fill our long-range strike needs
until 2037. This requires investment in research and development for a
suitable replacement to continue for the next 10 or 15 years before we
settle on a definitive design.
Question. What is your assessment?
Answer. Guam is an excellent support base and contributes
significantly to our operational capability in the Asia-Pacific region,
but we should not view it as a ``silver bullet,'' quick fix solution to
our basing challenges in the region. Creating a hub would locate
critical capabilities on a single island, could create a single point
of failure and also a large, hard-to-ignore target for missile-capable
adversaries. We would, therefore, have to make a considerable number of
force protection investments in order to defend this hub.
Additionally, a site's distance from the Asian landmass remains an
inescapable and fundamental criterion for determining its usefulness
for U.S. forces. Given this criterion, Japan and Korea remain much
better situated for our needs, and are therefore key to our military
posture in Asia. Only if our position is sharply reduced in these two
nations do we see the value of establishing Guam as a hub for our
operations in the region.
Finally, we need to strengthen the ``ties that bind'' in Asia, and
we need Congress' support to ensure that forward basing remains
politically viable in Asia.
Question. What are the Air Force's current forward deployment
basing requirements in the region?
Answer. The Air Force currently relies on numerous key air bases in
the region. We rely on these bases to provide a capability to carry out
peacetime engagement operations as well as respond to a crisis in the
region. Forward basing is and will remain the corner stone of the
regional Commanders-in-Chief (CINC's) ability to rapidly respond to any
threat to U.S. interests or those of our allies and friends. We are in
the process of supporting the Secretary of Defense in his review of
national military strategy and will incorporate those findings into our
Quadrennial Defense Review which will be sent to Congress later this
year.
Question. What are your projections for future needs?
Answer. To deal with potential contingencies in the Pacific Rim, we
need to augment our current facilities and complement them with
``satellite bases'' that could provide transient, base-of-the-day
capabilities for limited, quick-turn strike operations, or that hold
prepositioned war reserve materiel for future contingencies. To
accomplish these goals, the United States Air Force might have to tap
into up to 350 staging areas already available throughout the Asia-
Pacific basin. In many cases, these areas are inactive airbases that,
with congressional support, can be brought back to contingency/
operational-level status. Lastly, in addition to new investments in
added infrastructure, we expect our force protection requirements to go
up considerably, especially since we expect to confront asymmetric
anti-access strategies when we attempt to project military power in the
area.
Question. How does Guam fit with these needs?
Answer. As the western-most U.S. territory in the Asia-Pacific
region, Guam provides both the guaranteed access and infrastructure
facilities we need to stage military operations in the area. So,
although Guam may not warrant ``hub'' status except under appropriate
circumstances, as explained in Question #6, we could certainly augment
its capabilities.
The Apra Harbor, is frequently used by the Navy and can handle
ships as large as aircraft carriers. Andersen Air Force Base, in turn,
is a significant forward operating location. The base is ideal for
forward basing bombers, fighters and/or transport aircraft. Finally,
Air Force and Navy weapons storage facilities are present on the island
and offer significant holding capacity.
Impressive as these capabilities are, improvements are certainly
possible. Congressional support to upgrade underground infrastructure,
such as sewage, water, and power distribution capabilities, would
certainly augment Guam's ability to support contingency operations in
this part of the world.

TACTICAL AIRCRAFT

Question. What are the Air Force requirements for the new
generation of tactical aircraft given the new security environment?
Answer. Air Force requirements for next generation fighter aircraft
are primarily driven by the threat environment.
The future threat environment drives the design and capability of
the F-22 and Joint Strike Fighter (JSF). In addition to all the current
threats around the world, there will be an expansion of ``advanced
technology'' surface-to-air and air-to-air threats. The proliferation
of these advanced systems will make the future battlespace far more
dangerous.
Aerospace supremacy is the foundation of any joint, allied, or
coalition operation. To achieve this supremacy in the face of future
threat systems requires advanced technologies not available on today's
``legacy'' platforms. Characteristics such as low observability,
advanced sensors, and information superiority systems are essential in
the new security environment due to threat intensity, mobility, and the
tempo of warfare. The highly maneuverable and supercruise capable F-22
is optimized for the air-to-air fight, ensuring its dominance over any
projected threat aircraft while still retaining substantial air-to-
ground capabilities. With the JSF, joint and coalition forces will have
an affordable stealthy penetrator capable of attacking any heavily
defended enemy surface target. Employing next-generation multi-spectral
sensors and advanced situational awareness technologies, the JSF will
be cheap enough to procure in quantity. These two extremely lethal and
highly survivable aircraft will rapidly reduce the threat, enabling
joint forces freedom from attack and freedom to attack.
Question. The F-22, for example, was originally conceived during
the Cold War, and designed, at least in part, to counter advanced
aircraft to be deployed by the Soviet Union. What is the threat
baseline used to determine what capabilities are needed for the next
generation of tactical aircraft?
Answer. The worldwide proliferation of multiple surface-to-air
missiles (SAMs) and air-to-air aircraft constitutes a significant
challenge to air dominance. The F-22 must be able to survive in and
dominate a wide range of threat environments, from the solitary
shoulder-mounted man portable SAM to the sophisticated integrated air
defense system of an advanced adversary.
The surface threat includes the SA-10, SA-20, HQ-9, as well as
proliferated, legacy surface-to-air missiles such as the SA-2, SA-3,
SA-4, SA-5, SA-6, and SA-8, Roland, and Crotale as well as their naval
variants.
In the air-to-air environment, the F-22 will have to gain air
supremacy in encounters with Su-35s, Su-37s, Typhoons, and Rafales, as
well as other legacy Eastern and Western fighters.
A detailed and classified baseline of the threat environment may be
found in the F-22 System Threat Assessment Report (STAR).
Question. How do the capabilities of the F-22 fit in with current
and future threat assessments?
Answer. The capabilities of the F-22 will not only dominate current
threats, but more importantly, restore our aerial advantage for at
least the next 20 years. Surface threats we faced during the Gulf War
and Allied Force are being replaced by increasingly lethal systems like
the SA-10, SA-20 and HQ-9, have longer range, better resistance to
electronic jamming, multiple target tracking capability, and are more
mobile than their predecessors. Russia and China are exporting these
systems to Third World nations, and National intelligence organizations
predict that by 2005, the number of countries possessing advanced SAMs
will increase eight-fold.
Our current air superiority fighter, the F-15C, has lost most of
its advantages over current threat aircraft. At best it is at parity,
and in many cases at a disadvantage, to these threats. The F-15C will
be at a disadvantage to all follow-on fighters. American air
superiority can no longer be taken for granted.
The F-22 regains and will maintain our advantage over the next
generation of surface and air threats. It combines stealth technology,
supercruise, and advanced avionics in a highly maneuverable, lethal,
and survivable aircraft. The F-22 is an integral component of ensuring
American air dominance, the foundation of all our current and future
military endeavors.
Question. The F-22 is intended to become the Air Force new air
superiority fighter, with some air to surface capabilities as well.
How does it stack up against current tactical aircraft fielded by
other nations?
Answer. The F-22 is far superior to all currently fielded fighters.
First, there is no fielded, low observable adversarial aircraft. Other
fighters will be unable to detect or track the F-22 until it is within
visual range. Second, no other fighters can supercruise. The
combination of supercruise and high altitude allows the F-22 to cover
much more of the battlespace and significantly increases its missile
range over slower and lower aircraft. Additionally, the F-22's
advanced, integrated avionics give it greater situational awareness and
informational dominance over all other fighters. The adage, knowledge
is power, holds true in aerial warfare.
Finally, all of these advanced characteristics are woven into a
highly maneuverable airframe. These lend the elements of surprise,
survivability and lethality to the F-22. While any current fighter
would be greatly improved by having just one of these characteristics,
the F-22 combines them all into a truly dominant fighter aircraft.
Question. What sort of tactical aircraft capabilities do we expect
other nations to develop or deploy in the next decade (two decades)
which the F-22 will face?
Answer. The threat environment for the F-22 will vary considerably.
Many countries will produce or import new or upgraded aircraft,
missiles, and other weapon systems. This availability means that the
United States could face extremely capable weapon systems in a regional
conflict.
In the next two decades, many air forces will be smaller, cutting
inventories of combat aircraft by 20 to 30 percent. The savings will
enable air forces to buy small numbers of sophisticated combat
aircraft. By 2010, countries like Iraq and Iran will have fewer
aircraft, but with a higher percentage of fourth-generation (F-15 or F-
16 class) fighters. Advances in avionics will also increase older
aircraft's lethality and ability to penetrate defenses. For example,
Romania upgraded 1960s era MiG-21 fighters with multi-mode pulse
Doppler radars and improved cockpit situation displays, significantly
increasing the aircraft's effectiveness.
Foreign tactical aircraft will focus on improved electronically
scanned phased array radars capable of multi-targeting, reduction in
infrared and radar detection, and integration of onboard sensors.
Aircraft like the Su-27 FLANKER, which are in the inventory of
approximately 10 air forces have had design improvements integrating
new technology to improve lethality. The design improvements have
manifested themselves in the Chinese Su-30MKK or the Indian Su-30MKI.
These FLANKER derivatives have much better range and maneuverability
and have even more advanced air-to-air munitions. Russia is expected to
build FLANKER variants that integrate new technologies to suit customer
needs. While the Russian Air Force may not be modernizing at their own
desired pace, they continue to field significant fighter technologies,
some examples of which include: electronic warfare, within visual range
infra-red missiles, and thrust vectored engines.
France is producing upgraded variants of its older Mirage 2000
fighter and developing the Rafale. Upgrades to the Mirage 2000 include
an improved cockpit display, newer radar, and integration of more
advanced air-to-air missiles, laser-guided bombs, air-to-surface
missiles, and a long-range air-to-ground capability. The Rafale will
have a smaller radar cross section than current fighter aircraft along
with a very capable multimode, and a pulse-Doppler electronically
scanned radar. The Rafale is expected to reach initial operating
capability in 2002 for the naval version and 2005 for air force
version.
The Eurofighter's digital quadruplex flight control system allows
the aircraft to perform in either an air-to-air or air-to-ground role
through on-board programming and system reconfiguration. It carries an
all-aspect, multimode pulse-Doppler radar, an infrared search and track
set, data link system, and, depending on the member nation, an
extensive electronic warfare suite.
China's ``next generation'' F-10 fighter will be comparable to the
F-16C Block 30 aircraft and is expected to reach IOC after 2005. China
is also working on an ``advanced'' air superiority fighter that
incorporates signature reduction techniques.
Advanced air-to-air missiles integrated with emerging fighters and
the proliferation of precision munitions will increase the defensive
and strike capabilities of air forces globally. Finally, even inferior
aircraft armed with superior missiles may be able to defeat current
U.S. aircraft and missiles, posing an even deadlier threat to high
value assets such as Airborne Warning and Control System (AWACS) and
Joint Surveillance Target Attack Radar System (JSTARS).
Question. How does it stack up against these projected competitors?
Answer. The F-22 will be far superior to all projected fighters.
First, while several fighter aircraft are being designed to have
elements of low observability, none comes anywhere near matching the F-
22's ``stealth.'' Other fighters will be unable to detect or track the
F-22 until it is within visual range. Second, no other fighters will be
capable of maintaining supercruise. The combination of supercruise and
high altitude allows the F-22 to cover much more of the battlespace and
significantly increases its missile range over slower and lower
aircraft. Additionally, the F-22's advanced, integrated avionics give
it greater situational awareness and informational dominance over all
other fighters. The adage, knowledge is power, holds true in aerial
warfare. Finally, all of these advanced characteristics are woven into
a highly maneuverable airframe. These attributes yield the elements of
surprise, survivability and lethality to the F-22--``First Look, First
Shot, First Kill!'' While any fighter, current or projected, would be
greatly improved by having just one of these characteristics, the F-22
combines them all into a truly dominant fighter aircraft.
Question. According to a recent GAO report, the F-22 is slipping
further behind schedule, with deliveries of test aircraft delayed and
only 500 hours of flight testing completed. The report, entitled ``F-22
Aircraft: Development Cost Achievable if Major Problems are Avoided,''
is the most recent in a series of GAO studies of the program. It states
``that while the Air Force has experienced delays in the delivery of
test aircraft and the completion of flight and ground testing, it has
not extended the . . . completion date of the development program and
therefore may not be able to complete development flight tests before
the development program is scheduled to end.'' That end date remains
August, 2003. What is your assessment of the GAO report and the
criticisms it has raised about the F-22 program?
Answer. Flight test to date has exceeded 1,200 hours with
exceptional results matching or exceeding predictions. However, late
deliveries of test aircraft did delay our ability to generate flight
test sorties. In preparation for the Low Rate Initial Production (LRIP)
Defense Acquisition Board (DAB), we are reviewing the flight test
program and believe some additional test time will be required prior to
the start of Dedicated Initial Operational Test and Evaluation
(DIOT&E). We will complete all necessary testing prior to the start of
DIOT&E to ensure that we can safely and effectively enter operational
test.
Question. Some critics of the F-22 program argue that the Air Force
can maintain air superiority with upgrades to the F-15 and F-16, and
that at $62 billion for a 341 plane program the money for the F-22
would be better spent developing the ``generation after the next
generation'' weapons systems. How do you respond to this criticism?
What capabilities does the F-22 get you that upgraded F-15 and F-16s
can't provide?
Answer. The F-22 is the planned air superiority replacement for the
F-15C. The need for the F-22 is driven by the air superiority force
structure required to realize Joint Vision 2020 and the predicted total
threat picture. The F-22 is the force enabler for Joint Vision 2020.
The F-22's unique attributes of next generation stealth, supercruise,
maneuverability, and integrated avionics will guarantee rapid air
dominance, ensuring protection of strike aircraft, naval surface units,
and ground forces from air attack while continuing the advantage U.S.
forces have held since 1953. In addition, the F-22 will permit, for the
first time, 24-hour stealth operations and enable around-the-clock
employment of our F-117, B-2, and JSF fleets.
The development and proliferation of advanced SAMs, such as the SA-
10/12, will provide enemies sanctuary because existing fighters such as
the F-15 are unable to operate in this environment with acceptable risk
without protracted, asset intensive, defense suppression efforts.
Twenty-five countries are forecast to possess advanced SAM systems by
2005. In addition, the F-15 is at rough parity today with current
fighters such as the Su-27 and MiG-29. The F-15 will soon be at a
disadvantage with the fielding of the advanced fighters such as the Su-
35, Typhoon, and export versions of the Rafale and the proliferation of
advanced air-to-air missiles such as the AA-11, AA-X-12, and MICA. Even
with upgrades, the F-15 cannot deliver stealth, supercruise, affordable
integrated avionics or the air dominance U.S. forces will require to
survive against emerging threats.
Question. What is the current thinking in the Air Force about the
development and deployment of the Joint Strike Fighter?
Answer. The successful development and deployment of the Joint
Strike Fighter (JSF) remains critical to the Air Force's
recapitalization of its aging fighter force. Serious fighter inventory
shortfalls will exist after 2010--even if JSF is brought in on time--so
timely completion of JSF's development and deployment is vitally
important to the United States Air Force (USAF).
Our legacy fighters have served us well, but their military value
is in decline. The F-16s and A-10s that the JSF will replace were
designed and first fielded almost 30 years ago. Today, their
warfighting effectiveness is being threatened by the proliferation of
advanced air defense systems: fighters, air-to-air weapons, and
surface-to-air missiles. To counter this continuing improvement in the
worldwide threat, the Air Force must maintain an edge. In the air-to-
air arena, that edge is the F-22. In the air-to-ground arena, it's JSF.
The Joint Team has cooperated exceptionally well in achieving a JSF
design that meets or exceeds all of our requirements at an affordable
cost. For the Air Force, that means we'll get the JSF we need--a Day
One fighter that can attack every enemy target, including advanced
threat systems, at a price the nation can afford.
The Air Force position is that JSF is the only realistic option for
meeting our need for an effective, affordable replacement for the F-16
and A-10. We have stretched the lifetimes of most of our legacy
fighters to the maximum possible, making replacement necessary without
delay. Replacing legacy fighters with new legacy aircraft does not meet
our warfighting needs and saves no money. Restarting research and
development on a new fighter program wastes the investment the nation
has already made and the tremendous progress achieved. The coinciding
delay will result in large force structure gaps as current aircraft
reach the end of their service lives. If the Air Force mission remains
to fight and win the nation's wars, we must have JSF.

STRATEGIC BOMBERS

Question. All three U.S. strategic bombers--the B-52, B-1, and B-
2--were used in NATO's Operation Allied Force.
What are the lessons learned about the capabilities and
complementarity of the bombers from Allied Force?
Answer. The bomber force was an integral part of Operation ALLIED
FORCE. B-52s fired opening salvoes with long-range Conventional Air-
Launched Cruise Missiles--a key enabler in any conflict. B-2s used
stealth and GPS-aided precision weapons to strike high-value, heavily
defended targets--denying enemy sanctuary. B-1s used speed and the
largest payload of any United States aircraft to integrate with United
States and North Atlantic Treaty Organization (NATO) forces--daily
hammering of Serbian targets.
Each of our bombers has unique and, as you state, complementary
capabilities. While all of our bombers share the common characteristics
of large payload, long range, long endurance, and precision strike,
each also has some mutually exclusive capabilities. The Air Force
considers each of the bombers as part of an overall warfighting scheme.
A B-2 is not interchangeable with a B-1 or a B-52. The Air Force will
continue to upgrade our bomber fleet to highlight their complementary
capabilities and effectiveness over the next four decades.
Question. How are these lessons being applied to future mission
planning and force structure?
Answer. Bomber mission planning is designed to maximize weapons
effects and minimize threats to the aircraft. As the bomber fleet is
upgraded with more modern weapons--to include the Joint Standoff Weapon
(JSOW), the Joint Air-to-Surface Standoff Missile (JASSM), the Wind
Corrected Munition Dispenser (WCMD), and the EGBU-28 Deep Penetrator--
mission planning and bomber employment will continue to evolve. The Air
Force concept of bomber operations will always exploit the aircraft/
weapon combination that is most efficient and effective in achieving
our combat objectives.
Force structure is dependent on National Military Strategy and
individual weapon system capabilities. We are constantly assessing
force structure needs and replacement timelines for follow-on strike
aircraft.
Question. Did the Air Force's experience in Allied Force reveal any
shortcomings or gaps in the capabilities of our strategic bomber
forces?
Answer. The Air War Over Serbia (AWOS) did two things. First, it
validated our bomber concept of operations and, second, it reiterated
the need to continue aggressive modernization of the bomber fleet. The
superior performance of bombers in AWOS confirms the value of our
bomber force--each bomber filled its warfighting niche as advertised.
However, the Air Force is also very aware that current capabilities are
soon overcome by constantly emerging threats. All three bombers are
structurally sound and will not reach the end of their service lives
for another forty years. But, without modernization, the bomber force
will become more vulnerable and less effective. Upgrades are designed
to increase survivability, lethality, and situational awareness. The
number one lesson ``re-learned'' in AWOS was the need for bombers to
have long-range (beyond line-of-sight) secure communications and
datalink.
Question. Although the emphasis has shifted from nuclear to
conventional missions since the end of the Cold War, some long range
bombers maintain nuclear war-fighting capabilities. Although still on-
going, what is your expectation of how the Administration's review of
U.S. nuclear posture will impact on the nuclear and conventional
missions and the strategic bomber force structure?
Answer. As you know, Secretary Rumsfeld is conducting a broad
review of defense strategy and force structure with an eye toward
transformation. Simultaneously, the Department of Defense (DOD) is also
conducting the congressionally-mandated Quadrennial Defense Review
(QDR) and Nuclear Posture Review (NPR). Since these reviews are
ongoing, we cannot estimate the impact of their findings. However, the
Air Force believes there is a possibility of taking unilateral steps to
tailor U.S. nuclear forces to meet the current threat environment.
Nuclear strategy and guidance must preserve the essential elements that
have made deterrence work over the past several decades. All force
structure considerations should reflect the needs of the warfighter to
meet national military objectives. Any strategic reductions must not
result in a loss of conventional bomber capability. The current
inventory of nuclear-capable bombers consists of 94 B-52Hs and 21 B-2s.
Congress mandates 18 excess B-52H attrition-reserve aircraft each year
in the Defense Authorization Act. The Air Force's desired end-state to
meet operational requirements is 76 B-52Hs and 21 B-2s.
Question. With the closing of U.S. bases overseas--there were some
25 U.S. bases with 850 aircraft in Europe in 1990, for example, and
only 6 bases with 174 aircraft in 1999--some analysts have suggested
that the United States needs to place greater emphasis on long range
bombers, with their large payloads, long range, and quick response
time, for power projection. What is your assessment? Do our current
forces provide sufficient capabilities for power projection missions or
are additional long range bomber forces necessary?
Answer. Over the past 10 years, the Department of Defense and
independent research organizations have completed several long-range
airpower studies. These studies have reached a common conclusion--the
most cost-effective way to provide long-range combat capability is to
modernize the current bomber force, not procure a new, long-range
aircraft. Modernization includes: integrating precision and standoff
weapons, including the Small Diameter Bomb; improving situational
awareness and connectivity, and enhancing survivability. Modernizing
the existing bomber force also gives the Air Force the time needed to
push and acquire the technology needed for the next generation long-
range airpower capability.

INTELLIGENCE, SURVEILLANCE, AND RECONNAISSANCE (ISR)

Question. What is your assessment of the mix of existing and
planned manned and unmanned Intelligence, Surveillance, and
Reconnaissance (ISR) aircraft that can most efficiently satisfy
requirements for timely and accurate information?
Answer. In the low altitude regime, Predator Unmanned Aerial
Vehicle (UAV) is a highly desired commodity by theater Commanders-in-
Chief (CINCs) for low-altitude surveillance. Theater requirements for
this system are growing as CINCs become more familiar with its
capabilities so it is difficult to assess the proper mix.
For high altitude, the U-2 provides high-quality, multi-INT ISR and
Global Hawk UAV provides long duration, IMINT ISR with a follow on
SIGINT model planned. Global Hawk will complement overall ISR coverage
and help fill currently unmet CINC requirements.
The RC-135 fleet provides timely, robust, and highly capable
intelligence collection. Currently, there are insufficient aircraft to
meet collection requirements with no funding programmed to increase the
fleet and no UAV alternative to mitigate the collection shortfall.
Overall, current ISR capabilities are insufficient to fulfill
worldwide theater requirements. However, the programmed ISR mix has
been planned to optimize existing as well as new capabilities to
maximize worldwide ISR collection efforts.
Question. Do these requirements shift from peacetime to wartime?
Answer. The Predator Unmanned Aerial Vehicle (UAV) system is in its
infancy. Theater Commanders-in-Chief (CINCs) are employing this system
in new and unique roles that will continue to evolve as CINCs become
more familiar with its capabilities. It is likely that wartime
requirements could exceed the 10 combat systems programmed for
procurement.
During wartime, the U-2 pilot shortage issue would be resolved by
closing the Flying Training Unit (FTU) and utilizing instructor pilots
to fly operational missions (this was done during DESERT STORM).
Additionally, during wartime, primary U-2 limitations shift from pilots
to a number of sensors. Unlike other platforms, the U-2 has a modular
payload capability that allows sensors to be interchanged (usually
within 24 hours) to support unique mission requirements. However, the
U-2 lacks enough sensors to provide full coverage in a 2 Major Theater
War (MTW) scenario. Global Hawk is currently programmed to fill the
shortfall by the end of fiscal year 2005.
As with peacetime, Tasking, Processing, Exploitation, and
Dissemination (TPED) manning and infrastructure to properly exploit the
volume of intelligence in a 2 MTW scenario remains a problem
programmatically.
Similar to the U-2, during wartime, RC-135 FTU training ceases and
programmed depot maintenance inputs are managed to provide maximum
capability (also done during DESERT STORM). Currently, there are
insufficient RC-135s to meet wartime collection requirements under the
2 MTW scenario.
Question. How does the Air Force work to integrate aerial ISR with
information and analysis gained by other U.S. intelligence assets?
Answer. The Air Force Distributed Common Ground System (AF DCGS) is
the primary weapon system utilized to integrate aerial ISR with
information and analysis gained by other U.S. intelligence assets. It
provides multi-intelligence Tasking, Processing, Exploitation and
Dissemination (TPED) capabilities for the Joint Task Force and below.
National, theater and tactical collection sources are, or soon will be
supported by AF DCGS. In order to effectively manage ISR assets, the AF
will field ISR management tools at core AF DCGS sites and Air
Operations Centers (AOC). These ISR management tools will provide
automated capabilities to synchronize the operational employment of ISR
assets, fuse intelligence/sensor data and to perform Command and
Control (C\2\) of ISR.
Question. Some analysts have stressed the need to build additional
ISR capabilities given the importance of precise information if
precision guided munitions (PGMs) are to be effective.
What is your assessment of the role that PGMs have played in recent
Air Force activities and in future Air Force war-fighting plans?
Answer. Since their introduction in Vietnam, PGMs have increasingly
become the weapons of choice for the Air Force. In Vietnam, multiple
sorties and a great deal of munitions had to be expended to ensure the
destruction of high-value targets due to a severely limited PGM
capability. During Operation Desert Storm, and increasingly so in
Operation Allied Force, the Air Force was able to approach a one
target/one weapon goal through use of PGMs. Increased emphasis on
limiting civilian casualties and reducing collateral damage, as well as
reducing the risk for American aircrews, have made PGMs the preferred
weapons for the air campaign. In short, PGMs allow a conflict to be won
in less time, with fewer sorties, and with fewer casualties. All air-
to-ground weapons currently being developed are guided munitions. The
clear thrust of development is toward improving accuracy across the
board. While unguided munitions are and will continue to be in
inventory, it is clear that the importance of precision munitions will
continue to grow.
Question. What is your assessment of the nexus between ISR
capabilities and effective use of PGMs?
Answer. One of the most critical aspects of the ISR/PGM nexus is
the ratio between the inventory of available ISR systems and the number
of PGMs being employed. Since PGMs have stringent requirements for
accurate intelligence products, the link between the ISR and weapons
communities is a strong one. The more PGMs we employ, the greater the
demand for high fidelity, accurate ISR. Lessons from recent campaigns
have highlighted the need to compress those timelines wherever
possible. Once the campaign has moved to the operational phase, the
battlefield picture is constantly in a state of flux requiring dynamic
reassessment of certain ISR information in order to plan for proper
employment of PGMs. Current ISR systems are strained to provide
adequate planning information for even a small-scale contingency action
like the Air War Over Serbia. It is critical that more ISR systems be
procured, fielded, and manned with properly trained personnel in order
to meet a major regional conflict requirement. The increasing use of
PGMs and other guided weapons will place an even greater burden on our
ISR capabilities.
Question. What additional capabilities does the Air Force need to
develop to be able to fully leverage PGMs?
Answer. Effective employment of PGMs requires that accurate
information about potential targets be made available to the warfighter
in a timely manner. Ideally, the Air Force needs to develop
Intelligence, Surveillance, and Reconnaissance (ISR) capabilities for
real-time transmittal of pertinent information to the weapon platform
and/or weapon in flight. This will permit the immediate targeting/
retargeting of PGMs based upon the latest battlefield picture, and
result in the most efficient use of PGMs. To achieve this, current PGM
weapons need to be upgraded, and future PGMs need to be designed to
allow the weapon to receive and react to real-time information
transmittal. In addition, ISR systems must be upgraded/designed to
permit this interface with weapon platforms and PGMs.
One of the most critical aspects of an ISR/PGM upgrade is the ratio
between ISR systems and the number of PGMs being employed. An increased
number of ISR systems must be procured, fielded, and manned with
properly trained personnel in order to meet a major regional conflict
requirement. The Small Diameter Bomb, Joint Direct Attack Munitions,
and other guided weapons, which significantly increase the number of
targets that can be engaged with PGMs, will place an even greater
burden on our ISR capabilities. Without significant upgrades, our ISR
infrastructure will not be able to support the growing need for timely
and accurate targeting.
Question. Given recent events with manned U.S. military
surveillance aircraft, there is a growing interest in replacing manned
aircraft, where possible, with unmanned vehicles such as the Global
Hawk platform.
What is your current thinking on how to best introduce the Global
Hawk platform? At what pace?
Answer. The Global Hawk demonstrated military utility during the
Advanced Concept Technology Demonstration that finished last year, and
we intend to field an initial version, with minor improvements,
starting in 2003. These improvements incorporate operational
requirements not addressed in the previous demonstration phase, such as
provisions for emerging air traffic management standards. The initial
version will address unmet intelligence needs, augment existing
surveillance aircraft, and reduce the burden on low density, high
demand systems such as the U-2. Fielding the Global Hawk in the near
term will also help develop a greater understanding of the unique
challenges and broad operational potential of long-endurance unmanned
aerial vehicles.
While the initial version will satisfy some operational
requirements, there is a need for greater sensor performance. We have
begun development of this improved capability and will draw upon
sensors developed under other programs, such as the Multi-Platform
Radar Technology Insertion Program to meet the full requirement by
2009.
Our current plans include production of two Global Hawk aircraft
per year from 2002 to 2008 and four per year thereafter.
The fiscal year 2002 budget request initiates an accelerated
program approach that will provide full capability for most sensors by
2005 and increase production to four in 2003 and six per year
thereafter. The accelerated approach fields more capability sooner and
further accelerates the transforming influence of unmanned systems on
military aviation.
Question. What is your thinking on how to phase-in the Global Hawk
with current U-2 operations?
Answer. The U-2 is a highly capable system that is filling real-
world needs today. It has played a key role in every major U.S.
military operation in recent history. It is, however, a low-density,
high-demand asset that has been operating at a tempo that can reduce
the effectiveness of people and equipment. We have to manage collection
requirements carefully. Some requests go unmet, while the need for
information continues to grow rapidly. The Global Hawk will help meet
these needs and reduce the U-2 operations tempo to a more manageable
level. Global Hawk will build on the experience base of the U-2. In
fact, the Global Hawk will feed the same intelligence analysis systems
as the U-2 systems that will also evolve to address growing information
needs. We plan to base the Global Hawk alongside the U-2 at Beale Air
Force Base in California to capitalize on the benefits of shared
experience and infrastructure. Over the longer term, Global Hawk is
expected to replace the U-2 as we experience losses through attrition.
Question. What additional capabilities does Global Hawk bring to
the table?
Answer. The main advantage that Global Hawk brings is the ability
to operate for long periods of time. This allows a single Global Hawk
to provide a more sustained presence than other airborne systems, such
as the U-2. But more importantly, it offers much greater range that can
overcome the challenge of increasing limited access to forward basing
needed to effectively address U.S. interests around the world. Global
Hawk also brings additional collection capability. The initial
configuration employs low-cost sensors that provide good capability.
Over the longer term, we plan to install higher performance sensors
that meet or exceed the capability of current systems such as the U-2.
Question. What are the implications of the cost of full development
and deployment of Global Hawk on other Air Force operational
capabilities?
Answer. The Air Force follows a budgeting process that balances
program priorities to deliver and maintain required operational
capabilities at the lowest possible cost. Each program is addressed on
its own merit and funding changes in different programs are not linked
to one another. Global Hawk will augment other operational capabilities
such as the U-2. It will address operational needs that currently go
unmet and relieve the stress on low-density/high-demand systems. Over
the long term, Global Hawk will be capable of replacing the U-2.
However, the U-2 continues to provide important operational
capabilities and the Global Hawk will not assume U-2 missions until it
has proven capable of satisfying mission requirements.

LESSONS OF OPERATION ALLIED FORCE (KOSOVO)

Question. Although there was much to commend about air operations
in Operation Allied Force, a recent GAO Report concluded that ``the
kind of ad hoc basing of combat forces that occurred during Operation
Allied Force demonstrates that the lack of at least some planning has
the potential to result in unnecessary problems and inefficiencies.''
How would you characterize the basing, logistics, and coordination
problems identified by the GAO?
Answer. Per 22 June 2001 memorandum for JCS/J7, Air Force concurs,
with two substantive comments, with the GAO report ``Kosovo Air
Operations: Combat Aircraft Basing Plans are Needed In Advance of
Future Conflict.''
The two substantive USAF comments are repeated here:
``USAF-1 SUBSTANTIVE: GAO comment #5 (responding to JCS comment #3,
10 May 2001): `As noted in our draft report, because Operation Allied
Force did not fit into the definition of conflicts for which NATO had
prepared combat plans, NATO's structure did not apply to Operation
Allied Force, and the United States prepared plans for its own
participation in the operation after the conflict arose.' GAO comment
reflects incomplete research. GAO failed to fully consider that a NATO
operation was being evaluated, not a U.S. operation. GAO consultations
with NATO, in addition to EUCOM, would have been appropriate. GAO
wording implies that NATO and the United States started the operation
without a plan. In fact, significant NATO and U.S. planning occurred
prior to the start of Operation Allied Force (OAF). Initial planning
was modified to reflect political constraints imposed by member states
prior to the start of OAF. Once it became apparent that a 72-hour
campaign would not achieve the desired result, NATO and U.S. planners
made significant alterations to the operational plan.
``UDAF-2 SUBSTANTIVE: GAO comment #7 (responding to JCS comment #5,
10 May 2001): `We expect that, as part of its effort to create a
database of available airfields, EUCOM will make use of already
available resources to minimize or eliminate any duplication of
effort.' GAO comment reflects incomplete research. In addition to U.S.
logistics planning aids (e.g., Automated Air Facility Information
File), NATO has established the Reaction Forces (Air) Staff (RFAS) in
Kalkar GE, whose mission is `. . . to support the Strategic Commanders
and the Director Combined Joint Planning Staff with central air
expertise and . . . is responsible for deployment related (emphasis
added) aspects of strategic and operational air planning throughout the
full range of NATO operations . . .' Again, consultations with NATO
officials would have provided a more complete picture of changes made
in light of OAF.''
Question. What steps have been taken by the Air Force to address
these issues?
Answer. As the GAO report alludes to on page 12, the Air Force is
in the process of standardizing and partially automating its
contingency site survey processes and beddown feasibility analysis. To
this end, the Air Force fielded and is in the midst of refining the
Logistician's Contingency Assessment Tools (LOGCAT). LOGCAT provides an
automated employment-driven planning capability that accurately and
rapidly identifies resources at potential beddown locations, allows
rapid capability and limiting factor identification at beddown
locations, and allows units to rapidly tailor deployment packages based
on assets identified at the deployment location. The LOGCAT system
includes two subsystems, Survey Tool for Employment Planning (STEP) and
Beddown Capability Assessment Tool (BCAT). STEP provides a system
capability for collecting site survey information, and provides the
capability to transfer and store site survey data in a central database
known as the Employment Knowledge Base (EKB). BCAT is a robust decision
support tool that analyzes aircraft beddown feasibility from the
standpoint of aircraft sortie production, POL, munitions, billeting,
messing, and aerial port operations. These systems will aid the
deliberate planning for future conflicts, and provide the ability to
quickly respond to expeditionary taskings with informed combat aircraft
beddown decisions.

QUALITY OF LIFE ISSUES

Question. Concerns have been raised in recent years that, given the
tempo of operations, the Air Force has faced difficulties in retaining
sufficient skilled personnel, maintaining high morale, and so forth.
What is your assessment of the current personnel situation?
Answer. Our expeditionary mission and complex weapon systems
require a seasoned force--we depend on retaining skilled people to
maintain our readiness for rapid global deployment. Recently, TEMPO, a
robust economy and military/public sector pay inequities have affected
our ability to recruit and retain technologically adept, mid-career
airmen, officers, and civilians. This is true for the Total Force--
active duty, Air National Guard, Reserve, military and civilians. We've
made progress recruiting the numbers of people with the skills needed,
and we are actively pursuing initiatives that will eliminate barriers
to attracting the right candidates for our jobs. However, retention of
highly trained people remains challenging.
There is not one ``silver bullet'' that will turn the tide on
retention; if we take care of people and their families, many of them
will stay with us despite the ``push'' of increased TEMPO and ``pull''
from the private sector. To combat the ``push'' from within, we've
implemented structural and cultural changes via the Expeditionary
Aerospace Force concept to enhance responsive force packaging, as well
as providing more stability and predictability in deployment station
scheduling. We must continue to address the ``pull'' from the private
sector by focusing on our core quality of life programs: upgrade
neglected workplace environments, provide safe and affordable living
accommodations, adequately compensate our people, enhance community and
family programs, provide educational opportunities, provide affordable
health care, and reduce out-of-pocket expenses for housing, travel and
medical expenses. Quality of life initiatives are critical to our
future. They affect the welfare of our men and women and are crucial
factors to our overall readiness.
Question. What more needs to be done to assure that the Air Force
has highly skilled and qualified personnel?
Answer. We know that there is not one ``silver bullet'' that will
turn the tide on retention; our strategy is based on the premise that
if we take care of people and their families, many of them will stay
with us despite the ``push'' of increased TEMPO and ``pull'' from the
private sector. We must continue to focus on our core quality of life
programs to upgrade neglected workplace environments, provide safe and
affordable living accommodations, adequately compensate our people,
enhance community and family programs, provide educational
opportunities, affordable health care, and reduce out-of-pocket
expenses for housing, travel and medical expenses, as well as provide
adequate manpower to balance resources and requirements.
We have implemented structural and cultural changes via the
Expeditionary Aerospace Force (EAF) concept to enhance responsive force
packaging and to provide more stability/predictability in deployment
and home station scheduling.
For our civilian workforce, we are pursuing a multi-faceted
approach to help retain our critical skills and attract the best and
the brightest for the future. However, more needs to be done in the
areas of accession planning, force development, and retention/
separation management. For fiscal year 2002, we increased funding for
force-shaping by doubling our intern program, increasing civilian
leadership training, and funding selective use of the Voluntary
Separation Incentive Program (VSIP). For the future, near-term and
long-term, we must continue to address civilian workforce shaping,
particularly as it relates to attracting, developing, and retaining the
high-tech skills we need for our aerospace mission.
We also need to focus on quality of life related issues for our
civilian workforce, such as pursuing funding for civilian tuition
assistance for college, allowing civilians excused absence for exercise
activities during the normal duty day, and for programs such as the
Employment Assistance Program.
Question. What are your top priorities in addressing quality of
life issues?
Answer. The Air Force continually reviews quality of life to ensure
our eight core priorities address current requirements. First, we must
ensure adequate manpower as updated wartime planning factors and real-
world operations validate increased manpower requirements. Second, we
must improve our workplace environments, which have been neglected.
Third, fair and competitive compensation and benefits are important to
our people and are key to maintaining the all-volunteer force. Fourth,
we must continue to address force-wide balanced TEMPO issues with
manning, infrastructure and equipment, training, recruiting and
retention, and mission requirement assessments. Fifth, quality health
care is essential for our members and their families--full funding for
Defense Health Program is needed. Sixth, our people want safe,
affordable housing. Seventh, with more than 62 percent of our force
being married, enhanced family and community programs are very
important. Eighth, improved educational opportunities are a must for
individual and professional development. A significant challenge is
executing multiple improvements with our current resources--it is
imperative we balance resources to meet requirements. Every dollar we
invest in quality of life positively impacts our Total Force readiness.

TRANSFORMATION AND MODERNIZATION

Question. A joint Boeing and Air Force Research Lab study suggested
that fighter aircraft production costs could be cut in half by
aggressively incorporating commercially proven technologies and
processes throughout military aircraft development and production.
What is your assessment of this study?
Answer. The joint Boeing/Air Force Research Laboratory 21st Century
Affordable Aircraft Thrust study can be assessed in two parts. The
first part identifies manufacturing and process technologies and
Reduced Total Ownership Cost (R-TOC) advancements, which could accrue
to the benefit of future aircraft developments and procurements. The
second part of this study addresses procuring new F-15C-equivalent
aircraft to replace the Air National Guard's current F-15 aircraft.
The first part of the study came to the conclusion that new design
techniques and manufacturing procedures and processes could reduce the
R-TOC (life cycle cost) of future aerospace vehicles. New manufacturing
processes such as Virtual Manufacturing have the potential to reduce
cost by employing three-dimensional, computer-aided design and
manufacturing techniques to practically eliminate rework in structural
assemblies. Also, open system architectures for aerospace vehicle
avionics could reduce operations and support costs, as well as greatly
reduce integration time, facilitate avionics upgrades, and maintain a
competitive environment. If successful, we believe these efforts could
make a significant contribution in achieving lower total ownership
cost.
The second part of the study focused on developing cost estimates
for replacing Air National Guard F-15 aircraft with a new less
expensive model. As the Air Force Chief of Staff stated last year in a
letter to Congress, we do not have a requirement for additional F-15s.
Our current F-15 force structure is sufficient to sustain the fleet
through its projected service life. The F-22, along with the Joint
Strike Fighter, is the correct ``sight picture'' for our future.
Question. What actions, if any, have been taken or are planned to
incorporate its findings and recommendations in Air Force development
and production?
Answer. The Air Force is pursuing some of the recommendations
identified in the joint Boeing/Air Force Research Laboratory 21st
Century Affordable Aircraft Thrust study in the development and
production of future aerospace vehicles. The Air Force is relying on
Reduced Total Ownership Cost initiatives to achieve aerospace vehicle
affordability goals. For example, the joint Air Force/Defense Advanced
Research Projects Agency Unmanned Combat Air Vehicle advanced
technology demonstration is demonstrating affordable manufacturing and
assembly techniques and processes to an 80 percent cost confidence
level. The successful demonstration of affordable processes through
these and future programs could validate the cost estimating
relationships identified in the 21st Century Affordable Aircraft Thrust
study.
______

Questions Submitted by Senator Kay Bailey Hutchison

JOINT STRIKE FIGHTER

Question. I understand that both Joint Strike Fighter demonstrators
are meeting or exceeding performance and cost targets. Can you explain
the capability differences between the F-22 and JSF and is the 339 F-22
to 1,763 JSF mix the best cost versus capability trade-off possible?
Answer. Both the F-22 and JSF are exceptional aircraft and their
differences are significant. These differences stem from the objectives
used to design the aircraft at their inception. The F-22 was designed
to be the next generation air superiority fighter which contrasts with
the JSF objective to develop an affordable, multi-role strike aircraft
capable of meeting the needs of the Air Force, Navy, Marine Corps as
well as our allies. In short, they were designed for different
missions. These objectives influenced the design decisions yielding
different, yet complementary aircraft.
The F-22 and the JSF continue the ``High/Low'' combination
currently fulfilled by the F-15 and the F-16. The F-22/JSF ``High/Low''
combination is the Air Force solution to countering emerging threats.
The F-22, the ``Force Enabler,'' is optimized for our toughest air-to-
air missions. The F-22 will dominate future battlespace from day one,
while protecting and enabling the remainder of the Joint Force. The
JSF, the ``Bulk of the Force,'' is optimized for multi-role air-to-
ground precision attack of high value, heavily defended targets. The
JSF's stealth, large internal payloads, and integrated multi-spectral
avionics holds mobile and hard targets at risk. The JSF's low cost
allows deployment of large numbers against future threats. The JSF/F-22
Force balances affordability and capability and is the most cost
effective solution to meet emerging threats.
The F-22 is the planned air superiority replacement for the F-15C.
The need for the F-22 is driven by the air superiority force structure
required to realize Joint Vision 2020 and the predicted total threat
picture. The F-22 is the ``Force Enabler'' for Joint Vision 2020. The
F-22's unique attributes of next generation stealth, supercruise,
maneuverability, and integrated avionics will guarantee rapid air
dominance, ensuring protection of strike aircraft, naval surface units,
and ground forces from air attack while continuing the advantage U.S.
forces have held since 1953. In addition, the F-22 will permit, for the
first time, 24-hour stealth operations and enable around-the-clock
employment of our F-117, B-2, and JSF fleets.
The JSF will provide large numbers of capable aircraft necessary to
destroy a wide range of targets required to stop a well-armed
aggressor. The capabilities of the JSF were balanced by cost to bring
about a ``best value'' design. The resulting design is one that can
carry a staggering range of air-to-surface weapons and deliver them
precisely. Some of these will be carried internally to maintain the
aircraft's radar cross section. For example, the JSF will be able to
attack mobile targets as well as those in close proximity to friendly
forces in any weather condition. As the Air Force's replacement for the
F-16 and the A-10, the JSF was designed to excel at the wide range of
missions previously accomplished by those two aircraft.
Although the Air Force needs sufficient F-22's to support the
directed National Military Strategy (10 Air Expeditionary Forces), the
1997 Quadrennial Defense Review (QDR) reduced the F-22 buy to 339. The
initial JSF inventory requirement of 2,036 was based on replacing the
F-16 and A-10 force structure approximately 1:1. Today, however, the
JSF inventory objective is 1,763, a number which provides sufficient
airframes to replace the F-16 and A-10 fleets with required capability
(vs. numbers) for 2010 and beyond. The current relationship of 339 F-
22s and 1,763 JSFs is based on certain assumptions; platform baseline
cost estimates, projected warfighter capabilities, available funding,
and the 1997 Quadrennial Defense Review (QDR). The current QDR is
examining requirements for the new force structure (10 AEFs) and long
term plans for the F-15E and F-117. The Air Force will continue to
assess the complementary nature of the F-22 and JSF programs, as their
cost and capabilities are better understood.

B-1

Question. Since the B-1 has been taken out of the nuclear
deterrence mix, what are the Air Force's future plans with the bomber?
Do you plan to transfer more to the Reserves or Air National Guard? Are
there plans to consolidate B-1 basing?
Answer. The Air Force is in the middle of an aggressive
modernization program to keep the B-1 effective and viable for the next
forty years. Current upgrades are designed to increase lethality,
survivability, and situational awareness.
The B-1 consolidation plan will reduce the B-1 fleet from 93
aircraft to 60 and the five main operating bases will be consolidated
from five to two. The savings incurred from partial fleet retirement
will be used to modernize the remaining B-1s. The intent is to have a
leaner, more capable, more survivable B-1 force.
Two Air National Guard (ANG) bases (Robins Air Force Base, Georgia
and McConnell Air Force Base, Kansas) and one active base (Mountain
Home Air Force Base, Idaho) were selected as the best candidates for B-
1 drawdown. Each of the three B-1 squadrons is small and each of the
bases has other missions and other aircraft assigned. No bases will
close, ANG personnel will be provided with other missions, and active
personnel will be reassigned to fill other critical needs. The Air
Force is working to mitigate impacts on the personnel and bases
involved.

WEAPON SYSTEM

Question. During the CINC's testimony they voiced concern over the
lack of preferred munitions for training and operations. Which weapon
system purchases do you believe need to be increased? Would you assess
to what degree a lack of these weapons affects your force's readiness?
Answer. This is not an issue of purchasing more of one weapon, or
set of weapons. We have a significant shortfall in training and War
Reserve Materials (WRM) requirements. Major new weapons acquisition
programs are well funded, but budget constraints prevent the Air Force
from purchasing the quantity required by our defense strategy.
Additionally, funding shortfalls in legacy munitions/consumables such
as GBU-10/12's, flares, cartridges, rockets and practice bombs are
having an impact on readiness. Legacy munitions have been underfunded
over the last decade, resulting in a $2 billion Future Years Defense
Plan (FYDP) shortfall. Unfunded training requirements and the necessity
to continue training at the expense of the WRM stockpile have created a
$451 million bow wave as well as a $1.6 billion shortfall in testing/
training munitions over the FYDP to replenish the WRM stockpiles used
for training. The $186 million increase for training munitions
contained in the fiscal year 2002 President's Budget will stop the
undesirable use of War Reserve Munitions for warfighter training in
fiscal year 2002. However, we will need sustained increases in training
munitions in future years or we will once again have to use War Reserve
Munitions for training. We need to fully support our current legacy
weapons and consumables programs while continuing to fund future
weapons.
Air Force readiness is affected in two ways by shortfalls in legacy
munitions and consumables. First, current funding allows us to support
one Major Theater War (MTW), but we are accepting some risk supporting
a second. The second theater will be forced to rely primarily on
unguided munitions to achieve CINC objectives. Second, the lack of
preferred weapons in a theater will result in an increase in the
duration of the conflict, with a corresponding increase in attrition
and greater potential for collateral damage.

CLOSURE OF COMMISSARIES

Question. I received notice that the Commissary at Brooks AFB was
being closed. I am puzzled by this decision as usage of this
consistently profitable commissary has in fact increased recently,
since the commissary at Kelly was closed.
Why would the Air Force sign-off on the closure of commissaries
that are providing a service to active, reserve and military retirees
and are not losing money?
Answer. At the outset it must be understood that there is no profit
in the operation of commissaries. The challenge is to balance the
quality of life needs with the business case in order to make decisions
on commissary establishment and closures. In the case of the Brooks AFB
Commissary, it was a pretty clear decision. The presence of full
service commissaries at a reasonable distance from Brooks AFB provided
enormous capacity to deliver the commissary benefit in a first class
manner. The Brooks AFB store sales had reduced 44 percent since fiscal
year 1995 and reduced 11.3 percent between October 2000 and May of this
year. Additionally, the appropriated dollar costs to dollar of sales
ratio at Brooks AFB Commissary was about triple to that of the
surrounding San Antonio stores--and growing. It was estimated that we
could save about $1 million per year by having the Brooks AFB people
shop at other close by stores. The Brooks AFB store had become a
grocery convenience store--and a very expensive one to operate.
Question. Was any assessment conducted to see if the other San
Antonio commissaries could absorb the patrons, before the decision was
made to close Brooks'?
Answer. Yes, the capacity of other San Antonio area commissaries
was evaluated and considered in the business case developed by the
Defense Commissary Agency (DeCA). As you know there are several large
commissaries available in the Brooks AFB commuting area. They include
Fort Sam Houston (10 miles), Lackland AFB (11 miles), and Randolph AFB
(23 miles). Fort Sam Houston Commissary is a fairly new facility
completed in 1994, Lackland AFB Commissary recently received a major
upgrade which increased the sales floor by approximately 10,000 square
feet, and Randolph AFB Commissary's sales area was expanded. These
commissaries can more than adequately handle the patron base that the
closing of Brooks AFB Commissary will generate. In addition, these
larger stores offer many more features, more variety, and a larger
product selection, all of which provide a greater opportunity to save.
Question. Could you discuss the effects of deferred Real Property
Maintenance funding on Air Force readiness and quality of life?
Answer. The immediate impacts of deferred facility Operation and
Maintenance (O&M) funding are reduced productivity on the flight line,
in the maintenance shops and in the office administrative areas as a
result of unreliable and degraded facilities and infrastructure.
Quality of life not only implies dormitories and family housing, but
also includes community support and the workplace. Lack of adequate
funding leads to Band-Aid fixes and less than required day-to-day
sustainment.

BRAC

Question. I am not sure that we have actually realized any cost
savings from the last few rounds of BRAC due to environment clean-up
and other turn over costs. It also worries me to see the Air Force
close a training base only to discover that you cannot meet your
training requirements. Does the Air Force require another round of
BRAC? If so, will you maintain enough facility growth capacity for
surges or if overseas units had to redeploy to the United States?
Answer. The Air Force needs additional rounds of Base Realignment
and Closure (BRAC) to realign its force structure to meet current and
projected requirements and properly size its infrastructure consistent
with the force structure plan. The Air Force will work to evaluate and
ensure that it has the right amount of infrastructure to accommodate
potential contingency and redeployment situations.

GUARD AND RESERVE

Question. The Reserves and National Guard have greatly increased
their active duty support and deployment schedules. Is the Air Force
providing adequate support and funding to the Reserves and National
Guard to maintain this pace?
Answer. You are correct; the rate at which the Air Force Reserve
supports the active duty is at an all-time high. In fiscal year 2000,
the average unit reservist performed 89.75 paid days, far beyond the
one-weekend-a-month, two-weeks-a-year of the past. Our Reservists are
currently performing mandays at a rate not seen since the peak of
Operation Desert Storm in 1991.
Although we face certain challenges in the realm of funding, we
feel that the Air Force provides adequate funding to support our
increased contribution to the Total Force. The Air Force pays for
manday support through Military Personnel Account (MPA) funding and
also fully funds our flying hour program.
The Air National Guard (ANG) completed a review of full-time and
traditional ANG manpower requirements to support the Air Expeditionary
Force (AEF). The results of this effort validated a requirement of
2,048 additional full time manpower resources. Historically the ANG has
had limited full time manpower to operate and maintain facilities,
repair aircraft/equipment, and train the drilling force. Now with a
formalized AEF construct and increasing support requirements, the ANG
must be resourced properly for both training and increased Operations
tempo. We have funded 1,151 of this requirement through internal
offsets and funding received from the Air Force, leaving an unfunded
requirement of 897 full-time positions in logistics, communications,
air traffic control, combat communications, and airlift/air refueling
aircrews.

V-22 PROGRAM

Question. I am concerned that a significant portion of the
Department's rescissions were financed at the expense of your service's
participation in the V-22 program ($240 Million of $505 Million). Does
this signal a weakening of the Air Force's commitment to this leap-
ahead technology or only the reprogramming recommended by the Blue
ribbon panel?
Answer. The requested rescission of $240 million reflects a change
in acquisition strategy and not a change in the Air Force's commitment
to the V-22 program. The CV-22 is still the best weapon system to
modernize our Special Operations vertical lift forces and we still
intend to field the aircraft. However, the V-22 Program needs to
address known deficiencies, especially those highlighted by the Blue
Ribbon Panel, before the Air Force begins full-scale production of the
CV-22. In the interim, we are committed to continue the CV-22 flight
test program, and will assist the Navy in correcting deficiencies in
the common V-22 baseline and to prepare for CV-22 operational testing.
The Air Force remains fully committed to fielding the CV-22. The
Air Force is working with our partners to reduce the program's risk and
to get the warfighter the best aircraft possible.
Question. As you may know, on March 15th the Commerce Committee, of
which I am a member, reported out S. 361, which prohibits an air
carrier from using the services of a person as a pilot who is 65 years
or older. Currently, a pilot cannot be 60 years or older.
What is the Air Force's opinion of this legislation?
Answer. We do not believe it would be appropriate to voice an
opinion on this issue, and have no data on pilots flying at that age.
In our view, the issue focuses on civil aviation medical and safety
issues for which the Air Force is not in a position to expertly
comment.
Question. How would raising the mandatory retirement age for pilots
impact the Air Force's pilot shortage?
Answer. There is genuine uncertainty over the level of benefit to
the Air Force. While raising the mandatory retirement age could be
viewed as an incentive for pilots to remain in the military until
retirement eligibility and would also increase the national inventory
of civilian pilots (and thus reduce near-term airline hiring demand by
some amount), these positive effects could be offset to some degree by
the negative retention effect (on mid-career military pilots) created
by higher potential ``paper'' career earnings generated by the
additional five years spent as a senior airline pilot in the highest
wage brackets.

BRAC ISSUE

Question. As you may know, the 1996 BRAC resulted in the closure of
Kelly Air Force Base. At the end of that painful process, it became
clear that many of the best facilities from Kelly Air Force Base had,
in fact, been realigned to Lackland Air Force Base. This unusual
division of property has made it more difficult for the community of
San Antonio to adjust to the new circumstances. Would you please
examine this situation and report back if any of the previously
realigned facilities could now be declared surplus and conveyed to the
community?
Answer. As recommended by the Base Relignment and Closure (BRAC)
Commission, the airfield and all associated support activities and
facilities at Kelly Air Force Base (AFB) were realigned by law to
Lackland AFB. The Air Force has authority to dispose of the remaining
1,879 acres. However, many of the facilities located on the remaining
acres are currently still needed by the Air Force. Congress recognized
these types of situations could be harmful to long-range planning and
development opportunities to the local communities affected by BRAC and
granted Military Departments a property conveyance authority called a
leaseback (Public Law 104-106). A leaseback allows the Department of
Defense to transfer nonsurplus BRAC property by deed or through a lease
in furtherance of conveyance to the Local Redevelopment Authority
(LRA). The transfer requires the LRA lease the property back to the
Federal Department or Agency for no rent. When the Federal Department
or Agency no longer requires use of the facilities, the lease can be
terminated. The Air Force and the LRA for Kelly AFB have agreed to
enter into leasebacks for all the facilities currently used by the Air
Force.
______

Questions Submitted to General Michael E. Ryan

Questions Submitted by Senator Daniel K. Inouye

F-22

Question. Has a decision on the future of the F-22 been made, what
options are you looking at, and when will a production decision be
made?
Answer. The F-22 is ready for a Low Rate Initial Production (LRIP)
decision pending completion of the Defense Strategic Review.
Question. Operational testing of the F-22 may be delayed up to nine
months, and that the congressional cost cap on full scale development
will likely be exceeded. Is this true?
Answer. Flight test to date has exceeded 1,200 hours with
exceptional results matching or exceeding predictions. However, late
deliveries of test aircraft did delay our ability to generate flight
test sorties. In preparation for the Low Rate Initial Production (LRIP)
Defense Acquisition Board (DAB), we are reviewing the flight test
program and believe some additional test time will be required prior to
the start of Dedicated Initial Operational Test and Evaluation
(DIOT&E). The additional test time will require EMD cost cap relief. We
will complete all necessary testing prior to the start of DIOT&E to
ensure that we can safely and effectively enter operational test.
Question. Do you see a ground attack mission similar to the F-15E
in the F-22's future? Would this new mission require additional buys of
the F-22?
Answer. An advantage of the F-22 is its inherent air-to-ground
capability. The baseline aircraft at initial operational capability
will be able to employ two 1,000 lb global positioning system guided
weapons. This gives the F-22 an all-weather, near-precision ground
attack capability. Unlike all current fighters, the F-22 doesn't
sacrifice its characteristics of low observability or supercruise when
loaded for ground attack, because all ordnance is carried internally.
This makes the F-22 survivable and lethal against both the surface and
air threat, while employing air-to-ground weaponry. The Air Force is
also pursuing the acquisition of small diameter bombs, which will
increase the F-22 payload to at least eight near-precision weapons.
The number of aircraft needed is a force structure decision, and is
based on a strategy choice of how we will employ the aircraft.

AIRBORNE LASER

Question. The fiscal year 2001 Supplemental Appropriations request
includes $153 million for the Airborne Laser program. Would you explain
to us why you need an additional $153 million for this program? Is this
program cost growth or program acceleration? And is there sufficient
funding in your outyear budgets for the program?
Answer. The $153 million request, for the Airborne Laser (ABL) was
driven by a number of factors. A contractor Estimate at Completion
(EAC), performed in January, determined that fiscal year 2001 funding
is short $98 million if the ABL is to remain on track for a calendar
year 2003 missile shootdown demonstration. A continuing EAC performed
by the contractor identified an additional $55 million required for
cost growth and risk reduction activities. Of the $153 million total,
$64 million is needed to pull forward to fiscal year 2001 work
originally planned for fiscal year 2002. This out-of-phase work will
have the added effect of reducing overall costs to the program by
reducing the need to redesign systems again during the Engineering and
Manufacturing Development phase of the program. An additional $64
million is attributable to cost growth created by industrial base
issues, technical complexity, and system component test failures. The
remaining $25 million is required to reduce overall risk to the program
by purchasing additional spares and installing a secure information
network across all ABL test facilities.
Current contract funding was completely expended on 23 March 2001.
The ABL contractors are committed to the program and say they will
continue operating at risk while awaiting resolution of the fiscal year
2001 funding shortfall.
As to whether or not there is sufficient outyear funding for ABL,
beginning in fiscal year 2002, all ABL funding will transfer to the
Ballistic Missile Defense Organization (BMDO). It is expected that BMDO
will address ABL outyear funding as part of their overall missile
defense strategy to be submitted with their fiscal year 2003 budget
request.
Question. Is the Airborne Laser affordable with all the other
funding priorities in the Air Force?
Answer. Beginning in fiscal year 2002, all Airborne Laser funding
will transfer from the Air Force to the Ballistic Missile Defense
Organization (BMDO).

B-2 SPIRIT STEALTH BOMBER

Question. On the matter of the B-2, if it were affordable would you
support restarting B-2 production or would you place priority on
improving the capabilities of the existing B-2 bombers?
Answer. The Department of Defense and the Air Force are currently
examining the National Military Strategy. Force structure and
modernization priorities, including alternatives to restart B-2
procurement or improve B-2 capability, are being considered as part of
that analysis. Recommendations resulting from this review will be made
available to Congress upon completion.
Question. The B-2 contractor has made an unsolicited proposal to
restart B-2 production. Are you familiar with the details of this
proposal and how do you assess its affordability?
Answer. The Air Force is familiar with Northrop Grumman's Letter of
Offer for additional B-2C procurement and characterizes it as
unaffordable in the current budget environment.
______

Questions Submitted by Senator Patrick J. Leahy

KC-135

Question. Can you please confirm reports that well over one-third
of the KC-135 fleet is currently not operational, either resting in
depots or off-line due to spare part shortages?
Answer. Yes. There are 546 aircraft in the KC-135 tanker fleet. At
the beginning of June there were 151 depot possessed tankers undergoing
programmed depot maintenance, major upgrades and modifications or
unscheduled depot level maintenance. In addition, 99 aircraft were not
mission capable for a variety of reasons. About half of these 99 not
mission capable aircraft were undergoing isochronal inspections,
preventive maintenance, or unscheduled repairs. The other half were not
mission capable awaiting parts. Therefore, a total of 250 aircraft of
the total fleet size of 546 are either depot possessed or not mission
capable at field units. That is about 46 percent of the fleet not
readily available to perform the mission.
Steps are being taken to reduce the total number of aircraft that
are depot possessed. We expect to have that number down to 122 by the
end of this fiscal year and improve upon that next year.
These numbers reflect our peacetime maintenance and modification
programs. When we actually need to go to war, we can stop modifications
and delay heavy maintenance to rapidly return aircraft to service. We
conservatively estimate that we can reduce depot possessions by
approximately 47 percent within 90 days if needed for contingency
operations. Use of contingency inspections and waiver of peacetime
isochronal inspections would also increase the availability of mission
capable aircraft at the units.
Question. What percentage of the O&M costs are comprised by the KC-
135E fleet versus the fleet of KC-135R's?
Answer. There are 547 KC-135 tankers in our inventory.
KC-135Es account for 25 percent of this fleet, and drive 28 percent
of the O&M costs.
KC-135Rs account for 75 percent of this fleet, and drive 72 percent
of the O&M costs.
Question. Can you please describe KC-135 maintenance in detail,
including percentages of work completed in depot and base support.
Answer. Maintenance technicians at our active duty and air reserve
component units perform daily inspections, repairing aircraft systems,
servicing aircraft, preventive maintenance, isochronal inspections,
aircraft washes, fuel cell maintenance, and some component repair.
The KC-135 is programmed for depot maintenance every five years.
While it is in depot, it undergoes intense inspections and heavy
maintenance. In fiscal year 2000, this process took an average of 389
days to complete, excluding outliers which were either set-aside while
awaiting hangar space or that required more extensive repairs than
usually encountered. So far in fiscal year 2001, we have driven average
flowdays down to 364 days. Over the five-year programmed depot
maintenance cycle, depot work accounts for approximately 60 percent of
scheduled maintenance requirements.
Aircraft are also depot possessed when they undergo major upgrades
and modifications like Pacer CRAG. Pacer CRAG upgrades or replaces the
compass, radar and global positioning system (GPS) among other
components. The modification is performed by depot or contract field
teams at a number of locations. On any given day there are about 35
aircraft being modified with Pacer CRAG and it takes approximately 60
days to complete the modification. An additional 3 aircraft are usually
in depot status for other modifications such as the reengining program.
______

Questions Submitted by Senator Thad Cochran

JACKSON C-17 CONVERSION

Question. Last month the Guard and Reserve Component Chiefs
appeared before this Subcommittee. During testimony, Major General
Weaver indicated there are funding concerns associated with the Jackson
C-17 conversion. I understand the shortfalls are in excess of $170
million in Air Force funding and another $130 million in Air National
Guard funding. With conversion and construction already underway, how
do you plan to address these funding shortfalls?
Answer. The Air Force has recognized a shortfall at Jackson and has
incorporated it into the overall C-17 program requirement. While most
of the shortfall has been identified and is being worked in the fiscal
year 2003 Amended Program Objective Memorandum (APOM), the exact amount
of the shortfall is pending a final decision on exactly how the
aircraft will be operated. We will continue addressing the Jackson
shortfall in the fiscal year 2004 Program Objective Memorandum (POM) as
operational details firm up.

C-17 AIRCRAFT

Question. It is my understanding that General Robertson, Commander
of Air Mobility Command, and former Secretary of the Air Force Peters
made visits last year to the Jackson Air National Guard Base. At that
time, they both indicated that the 6 aircraft programmed for Jackson
were not ideal to fully meet the mission requirements and that 8 C-17
aircraft would be preferable; I should note that Major General Weaver's
testimony not only supported 8 aircraft but also suggested additional
aircraft would be beneficial. Do you support these assessments?
Answer. The United States Air Force C-17 basing plan is predicated
on the Defense Acquisition Board decision to procure 120 aircraft. Of
those 120 aircraft, 6 will be based at Jackson Air National Guard Base
with the first aircraft scheduled to arrive in July 2004. At this time
we are analyzing the results of many studies to determine future
airlift requirements to include an option for additional C-17s. In
fact, we are presently programming for 17 additional aircraft above the
120 buy to support our training and special operations requirements,
bringing our total to 137 C-17s. To accommodate these current and
emerging requirements, the Air Force is examining contractual,
programmatic, and budgeting issues associated with additional aircraft.
We will continue to readdress our basing options, to include the Air
Reserve Components, based on future procurement of additional C-17s.
Please be assured we will consider our Total Force options in this
process.

AIR FORCE WAY (AFWAY)

Question. I understand that the Air Force is in the process of
reorganizing its computer purchasing method into a single, more
efficient vehicle entitled ``Air Force Way'' or ``AFWAY.'' I have been
briefed that the vendor selection will be made shortly and that the
expected mix of vendors will consist of large companies and a small
number of disadvantaged businesses. While I applaud you for your
efforts in streamlining information technology purchases, I am
concerned that mid-sized companies, such as Howard Computers in Laurel,
Mississippi, may be overlooked as possible vendors. What are you doing
to ensure mid-sized companies are considered and included in this
effort?
Answer. The Commercial Information Technology Information Product
Area Directorate (CIT-PAD) is presently in the process of merging its
operations with Air Combat Command's ACC Way program. The combined
entity, which will take advantage of the best elements of both
programs, will be entitled ``AF Way.'' The Air Force will comply with
all governing procurement laws, and is committed to adopting a vendor
selection process that will ensure all businesses are given the fair
opportunity to compete for a position on the AF Way roster.
To that end, an acquisition review panel chaired by the Principal
Deputy Assistant Secretary (CIO-Business Information Management) met on
9 July to discuss all of the key issues surrounding the merger. Issues
included the selection of vendors that will be available for use by AF
Way customers, etc.
______

Questions Submitted by Senator Pete V. Domenici

FORCE STRUCTURE

Question. Thus far, the Rumsfeld review has been consumed by
speculation. Now I understand that his strategic review will be rolled
into the ongoing Quadrennial Defense Review (QDR).
Answer. We believe that will be the case for some of the studies.
Question. What, if anything, can you tell me at this stage in the
game regarding force structure changes within the Air Force.
Answer. The increasing importance of aerospace power to the nation,
which escalated in the post Cold War world, should provide the basis
for Quadrennial Defense Review (QDR) force structure decisions. Yet, we
are concerned that while the aerospace demand grows, corresponding
budget share remains stagnant. Fielding a force structure that
capitalizes on our asymmetrical advantages in space, stealth, long
range, unmanned vehicles, and precision will require vision and
statesmanship on the part of both the Department of Defense (DOD) and
Congress.
Significant force structure changes will be conducted internally by
the Air Force. Transformation is a process that the United States Air
Force (USAF) has continued from its inception. Yet our ability to
address the heightened national requirement for aerospace capabilities
is largely dependent legislative and executive support. Space control
is critically important, and as the national stewards of the vast
majority of space assets we would like to see support for space based
radar concept development. Our future force structure also must enable
us to overcome the anti access threats of advanced surface to air
missile systems (SAMS), advanced fighters, Theater Ballistic Missiles
(TBM), cruise missiles, and Weapons of Mass Destruction (WMD). The Air
Force will address this by continuing the revolutions of stealth and
precision with stealthy combat platforms like F-22 and Unmanned Combat
Aerospace Vehicles (UCAV) that punctuate our strong belief that only
stealthy aircraft will be survivable and lethal in the future air
combat environment.
Additionally, we expect technology to allow migration of
Intelligence Surveillance and Reconaissance (ISR) and strike
capabilities from manned to unmanned platforms and then to space
vehicles. Transition to space will provide a genuine ``deep look''
capability and offer new options for fighting at long distances.
Aggressive programs to field directed energy weapons (the Airborne
Laser and Space-Based Laser) and developing the capability to process
and use tremendous amounts of data while developing information
operations will remain at the forefront of our research efforts.
Finally, the critical shortages in our mobility capabilities will be
addressed in the near term. In short, the nation requires sufficient
forces to modernize our ten Aerospace Expeditionary Forces (AEFs) into
fully capable, balanced AEFs, optimized for the future security
environment and a new U.S. military strategy.
Question. Do you assume that the Aerospace Expeditionary Force
concept as implemented will remain in place?
Answer. Yes. The Expeditionary Aerospace Force (EAF) is an integral
part of our transformation. It is designed to help manage the rotation
schedule for steady-state operations while preserving crisis response
capability. The EAF construct helps us manage our limited resources by
maximizing predictability and stability for our airmen while meeting
the needs of theatre Commanders-in-Chief. Predictability increases
quality of life and, therefore, retention. The Air Force will use the
EAF construct during future crises to assess the build-up of forces,
the most effective redeployment flow, and follow-on capabilities the
Air Force can provide during force reconstitution. In addition, future
concepts and programs will be framed by the EAF to ensure our ability
to conduct expeditionary operations and meet challenges in the future.
Question. While I realize that many hard decisions remain to be
made, I would like to request that you provide me with any information
regarding proposed changes as soon as they are available.
Answer. As the Defense Review progresses, the Air Force will
continue to provide you updates to force structure constructs based on
emerging strategy and guidance. Our final force structure construct is
dependent on the results of the Secretary of Defense's (SECDEF's)
Strategic Defense Review.

SCIENCE AND TECHNOLOGY BUDGETS

Question. As I'm sure you know, I'm a big fan of Directed Energy
technologies. I have heard, and last week's Pentagon briefing
confirmed, that Secretary Rumsfeld will seek to substantially increase
the research budgets of the Pentagon.
Over the past several years, the Air Force has underfunded its
science and technology endeavors. There are several reasons for this,
which I'm sure you know, but I've been extremely concerned that the Air
Force was sacrificing its future technological edge in order to meet
immediate needs.
What can we expect for the Air Force science and technology budgets
in 2002 and 2003?
Answer. The Air Force recognizes the historical value of Science
and Technology (S&T) contributions to superior warfighting capabilities
and shares Congress' concerns regarding the level of funding for S&T.
In recognition of these concerns, the fiscal year 2002 President's
Budget (PB) shows a marked improvement in the S&T funding compared to
the fiscal year 2001 PB with a total increase of over $150 million for
core S&T efforts. This increase includes gain of almost $120 million in
the 6.1, Basic Research, and 6.2, Applied Research, technology base.
Our 6.3, Advanced Technology Development budget activity on the whole
is slightly lower due to the transfer of the Space-Based Laser program
from the Air Force to the Ballistic Missile Defense Organization. The
Air Force is continuing to work the fiscal year 2003 and outyear
budgets for S&T.
Question. Given the recent increased attention on directed energy,
especially high energy lasers, do you anticipate increased investment
in this technology area in the near future?
Answer. I am also a big fan of directed energy technologies. I
stated in the Forward to the recent Air Force Directed Energy Master
Plan that broad directed energy science and technology (S&T)
investments will provide opportunities for revolutionary changes in
future military capabilities. Thus, the department has requested an
increase of $15 million over last year's request in the Air Force's
core directed energy S&T programs. Also, the Air Force received over
$13 million this year from the Joint Technology Office for high energy
laser research and we are developing proposals for additional efforts
for fiscal year 2002.
Question. In light of Secretary Rumsfeld's emphasis on space, do
you anticipate substantially increased budgets in the research
endeavors related to protecting and fielding space assets?
Answer. In fiscal year 2002, there is increased funding within the
S&T Program for protecting and fielding space assets. Specifically, we
have increased research efforts in nanosatellites, super energetic
propellants, plasma dynamics, materials engineering, and quantum
computing.
In Applied Research and Advanced Technology Development, new
initiatives include nanostructural materials for space and spacelift
technologies for hypersonic flight. There also is increased emphasis on
programs such as radiation-hardening of satellite components,
ionospheric forecasting, space threat warning technologies, and rocket
propulsion.
In addition, increases to Defense-wide S&T accounts could also
apply to space. The University Research Initiative and High Energy
Laser Research programs could support several relevant space-based
technology efforts. Both the Defense Advanced Research Projects Agency
and the Defense Threat Reduction Agency, have also received increases
that could support space technology efforts.
The fiscal year 2002 President's Budget request reflects Secretary
Rumsfeld's high-emphasis on space and will enable the Air Force to
affordably launch and maintain our nation's military space assets.

SUBCOMMITTEE RECESS

Senator Inouye. Our next hearing will be on June 13, at
9:30 in the morning. At that time we will hear from the
Secretary of the Army and the Chief of Staff of the Army.
Ladies and gentlemen, thank you very much. The subcommittee
will stand in recess.
[Whereupon, at 11:05 a.m., Wednesday, June 6, the
subcommittee was recessed, to reconvene at 9:30 a.m.,
Wednesday, June 13.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, JUNE 13, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:39 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Daniel K. Inouye (chairman)
presiding.
Present: Senators Inouye, Dorgan, Stevens, Cochran,
Specter, Bond, and Shelby.

DEPARTMENT OF DEFENSE

Department of the Army

STATEMENTS OF:
THOMAS E. WHITE, SECRETARY OF THE ARMY
GENERAL ERIC K. SHINSEKI, CHIEF OF STAFF, UNITED STATES ARMY

OPENING STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. The committee is pleased to welcome the
Secretary of the Army, the Honorable Mr. White, and the Army
Chief of Staff, General Shinseki. Gentlemen, I thank you very
much for being here with us today.
As you can imagine, today is one of those crazy days. We
have 15 meetings going on at the same time, and there will be
another vote coming in about 10 minutes.
Secretary White, I believe this is your first appearance
before the Congress as Army Secretary, and we look forward to
working with you over the coming months. I trust that this will
be one of the many productive meetings you will be having with
our committee.
This morning's hearing is the second of our committee's
review of military services. We, of course, have not received
the Pentagon's final budget request for fiscal year 2002, and
unfortunately, this limits our ability to fully engage the
Army's needs for the coming year. However, Senator Stevens and
I felt it necessary to begin to lay the foundation for our
upcoming review. So, we are hoping for a full discussion of the
status of Army programs this morning.

TRANSFORMATION CHALLENGES

This committee is fully mindful of the bold and challenging
course the Army has chosen. This course known as
``Transformation'' is the Army's solution to meeting today's
national security threats and planning for tomorrow. The Army's
transformation plan is bold because it envisions a force to
meet future threats and takes concrete steps now to build that
force. This plan is challenging because it must balance the
need to maintain a strong and ready force today with the need
to build that future force. And it is risky because it could be
crippled by a lack of sufficient resources or a lack of
commitment by the Department of Defense.
The road ahead is long and formidable, but I can assure you
that you have the full support of this committee. Moreover, it
is my hope, and I am sure that of my colleagues, that the
Department's fiscal year 2002 budget request and the
Secretary's strategic review will meet these challenges head on
because we believe that the Nation cannot afford to pass up
this opportunity. And that is why I strongly urge you, Mr.
Secretary, as I have urged your counterparts in other services
not to let it slip by.
Finally, the administration recently submitted a fiscal
year 2001 supplemental appropriations request. We may have some
questions today regarding this submission, but let me also
assure you that the committee is fully aware of the urgent need
for these funds.
As I indicated, Senator Stevens at this moment is at
another hearing, but upon his arrival, I will call upon him to
make any remarks that he may wish to provide this committee.
So, it is my great pleasure and high privilege to call upon
the Hon. Thomas E. White, the new Secretary of the Army. Mr.
Secretary.

SECRETARY WHITE'S OPENING REMARKS

Secretary White. Thank you, Mr. Chairman. I am deeply
honored to appear before you today. This is my first appearance
before the U.S. Senate as the 18th Secretary of the Army since
my nomination hearing last month. Mr. Chairman, I sincerely
appreciate your very kind introduction and I look forward to
working with you and the committee. With your permission, I
will submit a statement for the record and keep my opening
remarks short.
Tomorrow the Army celebrates its 226th birthday. Throughout
all of those years, American soldiers have faithfully answered
our Nation's call to duty and have selflessly performed every
mission that the American people have asked of them. I am proud
to say that the soldiers still stand ready to answer our
Nation's call.
The Army has a non-negotiable contract with the American
people to fight and win our Nation's wars and to be ready for
any contingency. I intend, with your help, to honor that
contract.
Almost 2 years ago, General Shinseki announced his bold
plan to transform the Army. I fully support that plan. I can
report to you today that we have made great progress in
Transformation. Thanks to the aggressive support of the
Congress last year, we were able to fund two Interim Brigade
Combat Teams at Fort Lewis and step up our efforts in research
and development.
In the short time that I have been Secretary, I have met
with the leaders who are graduating from many of our fine
institutions, our top non-commissioned officers academy, the
Sergeants Major Academy at Fort Bliss, our Command and General
Staff College graduating class, our company grade officers
school at Leavenworth and this year's West Point class. As I
told them, everyone in the Army must embrace Transformation in
order to make our vision a reality. Now, at a time of relative
peace, is the time to embrace sweeping change.
Mr. Chairman, for almost 226 years, the Army has served our
Nation faithfully. We are making use of every opportunity to
maintain our commitment to our people to be ready for any
mission. Transformation is the most important link between the
great capabilities we have today and our ability to meet future
demands.
I thank you for the opportunity to testify today. I look
forward to working with the committee and I stand ready for
your questions. Thank you.
Senator Inouye. Thank you very much, Mr. Secretary.
Senator Stevens. My apologies, Mr. Chairman.
Senator Inouye. Good timing.
Senator Stevens. Good morning, gentlemen.
Senator Inouye. I now call upon the vice chairman of the
committee.

STATEMENT OF Senator TED STEVENS

Senator Stevens. I do join you in welcoming the Secretary
and General Shinseki. I will not take the time to read my
statement because I know I am late.
But I think this transformation process we have underway,
that was your vision, General Shinseki, should have our
complete support and we particularly are interested in seeing
what it is going to do as far as our forces in the Pacific,
which the chairman and I are both very interested in, as you
know. I think the strategy towards Asia and the Pacific, the
whole presence of our forces in the Pacific, is going to be
dominated by what happens to the Army. It is my hope that you
will continue to take a lead role with regard to that national
strategy. I look forward to working with you and the chairman
and with our staffs cooperating with you in every way possible.
I was pleased to visit with you yesterday, Mr. Secretary. I
appreciate your courtesy in coming by. We look forward to
giving you an opportunity to do a little marine research in
Alaska with me one of these days.
Secretary White. Yes, sir.
Senator Stevens. That is a very essential capability that
must be developed in all Secretaries. So, we will get at that
quickly.
I do want to note that one of our new appointees is
appearing before the Government Affairs Committee this morning,
Mr. Chairman. I will have to leave here in about an hour.
Thank you very much, and I appreciate your courtesy.
Senator Inouye. I thank you very much.
General Shinseki, as you can imagine, the matter foremost
in our minds is Transformation. In the last go-around this
committee, in order to demonstrate our support, appropriated an
additional $600 million. Can you give us an overview of what
has happened in Transformation to date?

GENERAL SHINSEKI'S OPENING REMARKS

General Shinseki. Sir, I will.
Mr. Chairman and Senator Stevens, let me begin by
congratulating you, Mr. Chairman, on your new role. Our many
dealings with this subcommittee have shown the great
partnership between you and Senator Stevens is, in fact, a co-
chairmanship. It does not matter where you sit. As Senator
Stevens has reminded me on more than one occasion, if you have
talked to one, you have talked to both. So, we look forward to
working with both of you and members of this subcommittee as we
continue our efforts to assure the readiness of the force and
also to take better care of our people.
It is also an honor for me to appear today with our new
Secretary. Secretary White is no stranger to the Army, as you
both know, having had a long and distinguished career in
uniform. He and I both patrolled the interzonal German border
together during the Cold War, at times even together. It is
great, once again, to be serving side by side with him.
Let me respond to your question, Mr. Chairman, by reporting
that that magnificent Army that we talked to you about, those
soldiers on point today, about 122,000 stationed overseas,
every day about 30,000 soldiers are on deployment away from
their home stations. We are mighty proud of all of them, and it
is their selfless service that guarantees the freedoms we all
enjoy.
The Army's fundamental purpose, to reiterate a statement
here by the Secretary, is to conduct prompt and sustained land
combat operations, in other words, to be ready to fight and win
our Nation's wars decisively. Now, this kind of readiness is
what provides our National Command Authorities and the
warfighting Commander in Chiefs (CINCs) with the flexibility to
respond to and resolve crises as they occur.
In order to better meet our warfighting commitments, the
Army is, as you have noted, Mr. Chairman, transforming itself
into a force that will be more strategically responsive and
just as dominant across the full spectrum of military
operations as our force is today. Over the past 2 years, thanks
to this subcommittee and the generous bipartisan support of the
entire Congress, we have built sustainable momentum for that
transformation.
Transformation, as we have discussed in the past, includes
three broad initiatives: the readiness of the current force,
the Legacy Force we talk about; the science and technology
effort to achieve the Objective Force before the end of this
decade, that future capability; and then finally, the creation
of an Interim Force to bridge the operational gap that exists
today in our capabilities.
As you know, we have started standing up two Interim
Brigade Combat Teams at Fort Lewis, Washington, and in
conjunction with this initiative, we have also conducted other
experimental exercises, one called the Advanced Warfighting
Experiment with the 10th Mountain Division at Fort Polk,
Louisiana, another with the 4th Infantry Division in a Division
Capstone Exercise at the National Training Center, in a force
on force, contested exercise to see what kind of capabilities
we derive. We will conduct phase two of that Division Capstone
Exercise with the 4th Infantry in October at Fort Hood, Texas.
These exercises have demonstrated that we have, in fact,
increased our combat effectiveness through advanced
technologies and improved leader development and warfighting
concepts.
We are also moving forward with the Objective Force. Thanks
to the members of this committee, the fiscal year 2001
appropriations bill generously funded our science and
technology effort. We have focused well over $500 million of
that investment on developing Future Combat Systems
technologies that will allow us to make decisions and begin
research and development on those discoveries in the 2003-2004
time frame.
The third vector in our Transformation campaign is focused
on combat readiness of our current Legacy Force, today's Army
that you see when you go and visit our operations. Today our
major combat systems are aging. Seventy-five percent of them
exceed their expected half-life. Aging equipment means
increased operations and maintenance costs. Those costs have
grown 30 percent in the last 4 years alone. Aviation safety of
flight messages have gone up over 200 percent since 1995.
To combat these spiraling costs, we have identified 21
systems that must be recapitalized in order to extend their
useful readiness. So, as we pursue future technologies for the
Objective Force we seek, we look for your continued support in
helping us to also maintain current readiness by recapitalizing
our aging fleets.
We are grateful for this committee's commitment to
improving also the well-being of our soldiers and their
families. Your efforts to tackle health care improvements,
increased pay, improved educational benefits, and invest in our
facilities is making a difference in the lives of our soldiers,
civilians, retirees, and their families. Still, our
infrastructure is decaying. We hope that the budget will
address this challenge, but I want you to know that we are
aware of the problem and we are committed to fixing it.
The President has submitted a supplemental appropriations
request that covers our most critical needs for the remainder
of this fiscal year. It provides the majority of our executable
operations and maintenance requirements in fiscal year 2001.
We are working closely with the Department of Defense to
identify alternatives for any remaining shortfalls. Among the
options under consideration is an increase in obligational
authority for the Army and an omnibus reprogramming. I am
confident that these efforts will be successful.
We understand that you are working quickly to mark that
supplemental and we thank you for that help. We have taken your
counsel and we are not curtailing operations. We trust that you
will pass the supplemental quickly, as you did last year, so
that we can maintain the readiness of the force.
Mr. Chairman, this Army vision is about an investment in
future Army leadership and security at home and abroad.

PREPARED STATEMENT

Thank you for your invitation to appear before this
subcommittee today, and I look forward to your questions.
[The statement follows:]

JOINT PREPARED STATEMENT OF THOMAS E. WHITE AND GENERAL ERIC K.
SHINSEKI

Mr. Chairman and distinguished members of the Committee, we thank
you for this opportunity to report to you today on the United States
Army's readiness to provide for our Nation's security today and in the
future.
The Army exists for one purpose--to serve the Nation. For over 225
years, American Soldiers have answered the Nation's call to duty,
faithfully and selflessly performing any mission that the American
people have asked of them.
Throughout that time, The Army--active component, Army National
Guard, U.S. Army Reserve, and Army civilians--has maintained its non-
negotiable contract with the American people to fight and win the
Nation's wars decisively. Indeed, The Army stands ready to go into
harm's way whenever and wherever we are asked. Today, The United States
Army is the most formidable land force in the world, a fact that
reassures allies and deters adversaries.
Today, The Army must also be capable of executing the broader
requirements of the National Security Strategy and National Military
Strategy across the full spectrum of operations. The commitment and
dedication of Army soldiers and civilians, coupled with the support of
the Administration and Congress, are allowing The Army to meet its
requirements as the decisive landpower component of the U.S. military.
The bipartisan support of Congress during the past two years has
helped The Army build much needed momentum for its Transformation. We
want to talk to you today about where we are in achieving The Army
Vision. In our testimony, we will describe the magnificent work the
Army has done in recent months and identify the challenges we still
face. There is much work to be done, but The Army has moved out. It is
transforming in comprehensive and profound ways to be the most
strategically responsive and dominant land force of the 21st Century--
decisive across the entire spectrum of military operations.
Today, The Army's active component ``go-to-war'' force is forward
stationed, deployed, or in the field--advancing our national interests,
supporting theater engagement plans, and training for tomorrow's
warfight. But, our Army is one-third smaller, deploys more frequently,
and is more likely to conduct stability and support operations than its
Cold War predecessor. Accelerating operational and deployment tempos
have strained Army capabilities, and over-stretched resources have
leveraged our warfighting readiness on the backs of our Soldiers and
their families. Indeed, our tempo creates a demand for forces that
increasingly can only be sustained by committing the reserve
components. When we speak of The Army--active and reserve components,
soldiers, civilians, family members, retirees, and veterans--we are
acknowledging a single force with common missions, common standards,
and common responsibilities.
The Army has competing requirements that are in constant, daily
tension. First is The Army's requirement to have a trained and ready
force to fulfill its non-negotiable contract with the American people
to fight and win our Nation's wars decisively. That mission is
significantly enhanced by being fully engaged around the globe with our
allies, partners, and sometimes our potential adversaries to promote
stability, to gain influence, and to ensure access in times of crisis.
Further, as contingency operations become long-term commitments, our
mission tempo--both training and operational--increasingly strains our
force structure. Second, but most important, The Army must transform
itself into a force for the 21st Century, strategically responsive and
dominant at every point on the spectrum of military operations and
prepared to meet a growing spectrum of requirements including threats
to our homeland. The mismatch between strategic requirements and
operational resources forces us daily to prioritize among support for
our people, the readiness demanded by the Nation, and the
transformation necessary to continue our global preeminence.
More than ten years ago, during the buildup of Operation Desert
Shield, The Army identified an operational shortfall--a gap between the
capabilities of our heavy and light forces. Our heavy forces are the
most formidable in the world. There are none better suited for high-
intensity operations, but they are severely challenged to deploy to all
the places where they might be needed. Conversely, our magnificent
light forces are agile and deployable. They are particularly well
suited for low-intensity operations, but lack sufficient lethality and
survivability. There is, at present, no rapidly deployable force with
the staying power to provide our national leadership a complete range
of strategic options. The requirements dictated by the rapidly evolving
world situation increasingly underscore that capability gap; therefore,
The Army is changing.

The Army Vision
To meet the national security requirements of the 21st Century and
ensure full spectrum dominance, The Army articulated its Vision to
chart a balanced course and shed its Cold War designs. The Vision is
about three interdependent components--People, Readiness, and
Transformation. The Army is people--Soldiers, civilians, veterans, and
families--and Soldiers remain the centerpiece of our formations.
Warfighting readiness is The Army's top priority. The Transformation
will produce a future force, the Objective Force, founded on innovative
doctrine, training, leader development, materiel, organizations, and
Soldiers. The Vision weaves together these threads--People, Readiness,
and Transformation--binding them into what will be The Army of the
future.

Achieving the Army Vision
Last year, The Army took the initial steps to achieve the Vision.
One step was the continued realignment of our budget priorities,
generating investment capital by canceling or restructuring eight major
Army procurement programs. Unfortunately, The Army has had to eliminate
or restructure 182 programs over the past decade and a half. It is not
that these systems and capabilities were unnecessary; rather, our
resource prioritization made the programs unaffordable. Joining with
the Defense Advanced Research Projects Agency in a cooperative research
and development effort, we began to streamline our acquisition process
to focus and accelerate the development and procurement of enabling
technologies for our Objective Force. To reduce the risk from the
capability gap between our heavy and light forces, The Army developed a
concept and began to organize an interim capability until the 21st
Century Objective Force is fielded. The Army also completed a
comprehensive study of how it trains Soldiers and grows them into
leaders, knowing that the capabilities of a transformed Army will
reside in competent, confident, adaptive, and creative people.

People
The Army is people, the core of our institutional strength. The
well-being--physical, material, mental, and spiritual state of
soldiers, families, and civilians is inextricably linked to The Army's
capabilities, readiness, and its preparedness to perform any mission.
To improve well-being, we are offering technology-based distance
learning opportunities; working to improve pay and retirement
compensation; working with the Department of Defense to guarantee that
TRICARE meets the needs of our soldiers, retirees, and their families;
improving facilities maintenance; and modernizing single soldier and
family housing. The health care provisions in the Fiscal Year 2001
National Defense Authorization Act for our soldiers, retirees, and
family members represent the types of significant improvements The Army
will seek for the force's well-being. Sustained Congressional support
for important well-being initiatives helps us recruit and retain a
quality force. Indeed, the pay raise, pay table reform, and retirement
reform, as well as diligent efforts by leaders at all levels of The
Army helped us exceed our recruiting and retention goals in fiscal year
2000. Attention to the well-being of our people will keep trained and
qualified Soldiers and civilians in The Army in the years to come.

Manning
In fiscal year 2000, we started a four-year effort to increase
personnel readiness levels. The Manning Initiative redistributed
soldiers to fill all personnel authorizations in every active component
combat division and cavalry regiment, but in doing so, we accepted some
risk in the institutional base. This effort exposed the serious gap
that has existed in the aggregate between manning requirements and
authorizations. It is possible that we will need to increase personnel
authorizations to meet all requirements, dependent upon ongoing reviews
of overall Army missions. Meeting the requirements with the active
component, however, is not enough. As mission demands necessitate
increased use of our reserve components, we must bolster their full-
time support requirements to better keep them ready and available.
Manning the entire force will reduce operational and personnel tempo
and improve both readiness and well-being.

Global Engagement
Readiness is a top priority. It means we must be prepared to
execute strategic missions across the full spectrum of operational
requirements around the globe. Our military formations must be able to
conduct a range of activities from engagement to stability and support
operations to warfighting. On any given day, The Army has nearly
125,000 soldiers and 15,000 U.S. civilians forward stationed in over
100 countries around the world. In fiscal year 2000, on a daily
average, we deployed more than 26,000 additional soldiers for
operations and military exercises in 68 countries--from East Timor to
Nigeria to the Balkans. In Bosnia, the Texas Army National Guard's 49th
Armored Division assumed the mission for the Multinational Division
(North), the first time since World War II that a reserve component
division headquarters has led active component forces in an operational
mission. In both Europe and Korea, Army Soldiers continue a successful
security commitment made 50 years ago. In Southwest Asia, The Army
continues its support of United Nations sanctions against Iraq,
stability operations in the Persian Gulf, and peacekeeping efforts in
the Sinai. No other military service works as frequently, as
continuously, or on as many levels to deter aggression, operate with
allies and coalition partners, and to respond at home and abroad with
support to civil authorities.

Civil Support
The Army provides military support to civil authorities, both
domestically and around the globe, for crisis response and consequence
management. Army support after natural disasters ranged from personnel
and equipment to suppress wildfires to logistical and medical support
following the disasters in the South African, Central American, and
Asian Pacific regions. Last year, within the United States, the U.S.
Soldier and Biological Chemical command trained over 28,000 people and
conducted crisis response and consequence management exercises in 105
cities with federal agencies, state and local governments, and non-
government organizations in support of the Domestic Preparedness
Program. The Army Corps of Engineers prevented an average of $21.1
billion in damages through flood control management projects including
383 major flood control reservoirs and 8,500 miles of flood control
levees as part of its flood fighting authority and the Federal Response
Plan. The Army supported civil law enforcement agencies in more than
380 counter-drug operations in 41 states. Finally, as part of a joint
program, The Army led the development and testing of a fixed, land-
based National Missile Defense system that offers the most mature
technology for a near-term deployment decision. The Army stands ready
to respond to the full breadth of security requirements in the homeland
and abroad now and in the future.

Readiness
Measuring the readiness of The Army to respond to the Nation's call
requires accuracy, objectivity, and uniformity. Our current standards
are a Cold War legacy and reflect neither the complexity of today's
strategic and operational environments nor other important factors.
Near-term factors encompass the overall capability of units to deploy
and include training enablers such as training ranges, institutional
support, and depot maintenance; full time support for our reserve
components; and installation support. Long-term readiness factors
affect The Army's ability to fight in the future and to retain quality
personnel. We are re-examining how to measure Army readiness in the
near-term, the long-term, and across the range of missions we may be
expected to undertake. This new reporting system will provide timely
and accurate information on the status of The Army's readiness, with
measurements that are relevant and quantifiable, to enhance the ability
of commanders to make the best possible employment decisions. It will
also give the American people a more accurate assessment of how ready
their Army is to do what it is asked to do.

Installation Readiness
Installations are an essential, but often overlooked, part of our
warfighting readiness. They support Soldiers and their families,
enhance the rapid deployment of The Army, and provide efficient and
timely support to deployed formations. Funding facility Sustainment,
Restoration and Modernization (SRM, formerly termed Real Property
Maintenance, or RPM) accounts is one of The Army's greatest concerns
this year. We must maintain, modernize, and transform the training
platforms and ranges that prepare the force; the depots and arsenals
that maintain and equip the force; and the power projection platforms
and information infrastructures that support the force when deployed.
Only by taking care of installation infrastructure now can The Army
secure readiness for the future also.
In the past, we paid other bills at the expense of facilities
upkeep or masked these costs by migrating funds from operating tempo
accounts--a practice we have stopped. The Army would prefer to divest
itself of excess infrastructure and receive full funding to maintain
installations and repair critical facilities. The Army's current goal
is to sustain facilities to a level that prevents further deterioration
and to improve both the quality and the quantity of facilities to meet
validated deficits in strategic mobility by fiscal year 2003, barracks
by fiscal year 2008, and family housing in fiscal year 2010. However,
even with this significant investment, our overall infrastructure
condition continues to decline. Previously, we have funded SRM at only
60 percent, and we still cannot afford to fund at 100 percent, so
conditions are getting continually worse. We currently have an unfunded
SRM backlog of $17.8 billion and an unfunded facilities deficit of $25
billion. The solution requires a 30-year commitment to fully fund and
focus SRM funding on selected facility types, in ten-year increments.
Army installations will take on a greater role as we attempt to reduce
the deployed logistical footprint and rely on reach-back links for
enhanced command and control capabilities. Transformation of our
operational force without a concurrent renovation of the installation
infrastructure will create an imbalance that will impinge on advantages
gained by a transformed force.

Transformation
The third thread of the Vision requires a comprehensive
transformation of the entire Army. This complex, multi-year effort will
balance the challenge of transforming the operational force and
institutional base while maintaining a trained and ready force to
respond to crises, deter war and, if deterrence fails, fight and win
decisively. Transformation is far more extensive than merely
modernizing our equipment and formations. It is the transformation of
the entire Army from leader development programs to installations to
combat formations. All aspects--doctrine, training, leaders,
organization, material, and Soldiers--will be affected.
Transformation of The Army's operational force proceeds on three
vectors--the Objective Force, the Interim Force, and the Legacy Force.
All are equally necessary to our Nation's continued world leadership.
The Objective Force is the force of the future and the focus of The
Army's long-term development efforts. It will maximize advances in
technology and organizational adaptations to revolutionize land-power
capabilities. The Interim Force will fill the current capability gap
that exists between today's heavy and light forces. Today's force, the
Legacy Force, enables The Army to meet near-term National Military
Strategy commitments. Until the Objective Force is fielded, the Legacy
Force--augmented or reinforced with an interim capability--will
continue to engage and respond to crises to deter aggression, bring
peace and stability to troubled regions, and enhance security by
developing bonds of mutual respect and understanding with allies,
partners, and potential adversaries. It must remain ready to fight and
win if necessary, giving us the strategic hedge to allow
transformation.
As The Army works to develop and acquire the technologies for the
Objective Force, the Legacy and Interim Forces will guarantee Army
readiness. Our most pressing concerns this year include the
modernization and recapitalization of selected Legacy Force systems.
Legacy Force Modernization & Recapitalization
We must judiciously modernize key armored and aviation systems in
the Legacy Force to enhance force capabilities. We will further
digitize the Abrams tank to increase situational awareness and
remanufacture early model Bradley infantry fighting vehicles to improve
lethality, situational awareness, and sustainability. We will procure
new systems like the Crusader howitzer to increase force effectiveness,
reduce friendly casualties, ease logistics support requirements, and
improve deployability. Crusader will maximize the total capabilities of
the Legacy Force. Fielding the Patriot Advanced Capability-3 missile
defense upgrade and the Theater High Altitude Area Defense system will
significantly increase our in-theater force protection. Current legacy
forces will benefit from upgrades and enhancements to proven systems.
Interim forces will demonstrate the power of developmental and off-the-
shelf communications and intelligence capabilities. The Army has made
the hard decisions for selective modernization to sustain combat
overmatch. What is needed is continued support for our prudent
investment strategy to keep our force strong and credible.
Concurrently, The Army will selectively recapitalize Legacy Force
equipment to combat the rapid aging of our weapons systems. The Army
has determined that we preserve readiness best and most cost
effectively when we retire or replace warfighting systems on a 20-year
Department of Defense modernization cycle. Today, 12 of 16 critical
weapons systems exceed this targeted fleet average age. As systems age,
they become more costly and difficult to maintain in peak warfighting
condition. They lose combat overmatch with respect to an adversary's
modernized systems. The Army has established a selective
recapitalization program that will restore aging systems to like-new
condition and allow upgraded warfighting capabilities for a fraction of
the replacement cost. We must maintain the readiness of the Legacy
Force until the Objective Force is operational. As the Legacy Force
maintains our strategic hedge and the Interim Force bridges the
capability gap, The Army will build the Objective Force and complete
the Vision for a trained and ready 21st Century Army.

The Interim Force
The fielding of the Interim Force fills the strategic gap between
our heavy and light forces and is an essential step toward the
Objective Force. The key component of the Interim Force is the Interim
Brigade Combat Team (IBCT), the first of which is being organized at
Fort Lewis, Washington. Its primary combat platform, the Interim
Armored Vehicle (IAV), will fulfill an immediate requirement for a
vehicle that is deployable any place in the world arriving ready for
combat. The IAV will consist of two variants, a mobile gun system and
an infantry carrier with nine configurations. The IAV will achieve
interoperability and internetted capability with other IBCT systems by
integrating command, control, communications, computer and
intelligence, surveillance, and reconnaissance systems. Congress
supported the IBCT concept with an additional $600 million in the
Fiscal Year 2001 Defense Appropriations Act for IAV procurement and
organizing the second IBCT. The Army will program resources to field
six to eight IBCTs.
The Army will train and test Soldiers and leaders in the doctrine
and organization of these new units to ensure that they can respond to
operational requirements. An IAV-equipped battalion-sized element will
undergo training and initial operational testing and evaluation to
guarantee system suitability and effectiveness. Innovative applications
and technology insertion in supporting forces will complete the IBCT
package and enable full operational capabilities for the first IBCT in
2005.

The Objective Force
The Army's ultimate goal for Transformation is the Objective Force.
Operating as part of a joint, combined, and/or interagency team, it
will be capable of conducting rapid and decisive offensive, defensive,
stability and support operations, and be able to transition among any
of these missions without a loss of momentum. It will be lethal and
survivable for warfighting and force protection; responsive and
deployable for rapid mission tailoring and the projection required for
crisis response; versatile and agile for success across the full
spectrum of operations; and sustainable for extended regional
engagement and sustained land combat. It will leverage joint and
interagency reach-back capabilities for intelligence, logistical
support, and information operations while protecting itself against
information attacks. It will leverage space assets for communications;
position, navigation, and timing; weather, terrain, and environmental
monitoring; missile warning; and intelligence, surveillance, and
reconnaissance. The Objective Force will provide for conventional
overmatch and a greater degree of strategic responsiveness, mission
versatility, and operational and tactical agility. With the Objective
Force, The Army intends to deploy a combat-capable brigade anywhere in
the world in 96 hours, a division in 120 hours, and five divisions in
30 days. Our ability to quickly put a brigade-size force on the ground,
with the balance of a division following a day later, fills a current
gap for credible, rapid deterrence. The Objective Force will offer real
strategic options in a crisis and changes the strategic calculations of
our potential adversaries. The Army with Objective Force capability
will provide the National Command Authorities with a full range of
strategic options for regional engagement, crisis response, and land
force operations in support of the nation.

Science and Technology
Advances in science and technology will lead to significantly
improved capabilities for the Objective Force. The Army is programming
over $8 billion for science and technology efforts to begin fielding
the Objective Force by the end of the current decade. This effort seeks
to resolve a number of challenges: how to balance sustained lethality
and survivability against ease of deployability; how to reduce
strategic lift requirements and logistical footprint required in-
theater; how to mitigate risk to our support forces and to forces in-
theater; and how to ensure digitized, secure communications to provide
battlefield awareness at all levels of command. The Army will find the
best possible answers while maintaining the ready, disciplined, and
robust forces our Nation demands, our allies expect, and our
adversaries fear.
Future Combat Systems (FCS), a system of systems, is one of the
essential components for The Army's Objective Force. To accelerate
development of key technologies, The Army partnered with the Defense
Advanced Research Projects Agency in a collaborative effort for the
design, development, and testing of FCS while simultaneously
redesigning the force. Forces equipped with FCS will network fires and
maneuver in direct combat, deliver direct and indirect fires, perform
intelligence, surveillance, and reconnaissance functions, and transport
Soldiers and materiel. Over the next six years, The Army will
demonstrate and validate FCS functions and exploit high-payoff core
technologies, including composite armor, active protection systems,
multi-role (direct and indirect fire) cannons, compact kinetic energy
missiles, hybrid electric propulsion, human engineering, and advanced
electro-optic and infrared sensors.
Equally essential to the Objective Force is the fielding of the
Comanche helicopter beginning in 2006. Comanche is the central program
of the Army aviation modernization plan and a prime example of existing
modernization programs with significant value for Objective Force
capability. Although Comanche will be fielded as part of the Objective
Force, its digitization will be compatible with Legacy and Interim
Force systems. Comanche will provide a lethal combination of
reconnaissance and firepower.

Institutional Transformation
As the combat formations are being transformed, The Army's
institutional base--schools, services, facilities, and installations--
must also change to support both the Objective Force and current
mission requirements. The U.S. Army Training and Doctrine Command
produces tactically and technically proficient Soldiers and leaders and
the doctrine and concepts for operational success. The Army must train
Soldiers--in simulations, on ranges, and in exercises--and grow them
into leaders who are capable of executing rapid and seamless
transitions between missions throughout the spectrum of operations.
Training must continuously improve and respond to emerging
technologies. We must recapitalize and modernize ranges, distance
learning centers, Army schools, and combat training centers to keep
pace with changes in force structure, technology, and the global
environment. We must address the increasing challenge to readiness
posed by encroachment to our ranges and training areas while
maintaining our environmental stewardship of these same lands.
Army doctrine and concepts must also transform to keep pace with
our changing operational force and growing technological advantages. As
foundations for the Transformation, the two conceptual baselines for
Army doctrine, Field Manuals, FM-1, The Army, and FM-3, Operations,
will be published June 14, 2001. The Training and Doctrine Command is
revising and developing doctrine for organization and operation of the
Interim Force and validating concepts for the Objective Force. We are
also developing the concepts to integrate the capabilities of space and
information operations to provide support across the entire spectrum of
military operations. At every level, The Army is integrating emerging
joint and multinational doctrine to develop the concepts that will
field a force, grounded in doctrine, that is capable of providing the
National Command Authorities a range of options for regional
engagement, crisis response, and sustained land force operations.

Army Training and Leader Development
Key to transformation is the training and leader development
necessary for producing adaptive Soldiers and leaders who can lead and
succeed in both joint and combined environments while capitalizing on
the latest battlefield technologies. The Army Training and Leader
Development Panel (ATLDP) has concluded its in-depth study of issues
affecting The Army's culture and its training and leader development
doctrine. The ATLDP surveyed and interviewed over 13,500 officers and
spouses. Follow-on studies of the noncommissioned officer and warrant
officer corps will be conducted over the next six months. The primary
objectives of the panel were to identify skill sets required of
Objective Force leaders and to assess the ability of current training
and leader development systems to cultivate those skills. Study
participants addressed issues that included well-being, job
satisfaction, training standards, and the officer education system.
This study represents a candid self-assessment by The Army; it seeks to
restore faith with Soldiers and set a course for improving all aspects
of The Army's culture by bringing institutional beliefs and practices
in line. To that end, some steps have already been taken, including
adapting the Officer Education System to meet the needs of the
transforming Army; eliminating non-mission compliance tasks that
interfere with war fighting training; allocating full resources to our
Combat Training Centers; and protecting weekends for the well-being of
soldiers and their families. It is a testament to the strength of any
organization when it is willing to take such a candid look at itself,
and this kind of healthy introspection characterizes a true profession.

Logistical Transformation
We will transform logistical services and facilities to enhance
readiness and strategic responsiveness. Today, logistics comprises
approximately 80 percent of The Army's strategic lift requirement,
creating a daunting challenge to deployability. Prepositioning stocks
and forward presence solves only part of the problem. Currently, The
Army has seven brigade sets of equipment forward deployed on land and
at sea with an eighth brigade set being deployed in fiscal year 2002.
As we fundamentally reshape the way The Army is deployed and sustained,
we will ensure logistics transformation is synchronized with the needs
of the operational forces and supports Department of Defense and Joint
logistics transformation goals. The Army is examining how to reduce the
logistical footprint in the theater of operations and to reduce
logistical costs without hindering warfighting capability and
readiness. Approaches already being explored are recapitalization,
common vehicle chassis design, a national maintenance program, and an
intermediate basing strategy for force protection. We are synchronizing
the critical systems of the institutional Army with our operating
forces to ensure the Transformation of The Army is holistic and
complete.

Conclusion
The Army has embarked on a historic enterprise. Recognizing that
the forces we can provide to the combatant commands are becoming
obsolescent in a changing strategic environment, The Army is
transforming. With the support of the Administration and Congress, The
Army has charted a course that will better align its capabilities with
the international security environment, enhancing responsiveness and
deterrence while sustaining dominance at every point on the spectrum of
operations. The Army Transformation is the most comprehensive program
of change in a century and is already underway. It comes at a
propitious moment. We live in a time of relative peace. Our Nation's
economic strength has given us a period of prosperity. A decade of
post-Cold War experience has provided us strategic perspective and
American technological power gives us tremendous potential. We have
seized this opportunity to guarantee our strategic capability and our
non-negotiable contract with the American people well into this
century.
Mr. Chairman and distinguished members of the Committee, we thank
you once again for this opportunity to report to you today on the state
of your Army. The statements made in this testimony are contingent upon
the results of Secretary Rumsfeld's strategic review. We ask you to
consider them in that light. We look forward to discussing these issues
with you.

Senator Inouye. Thank you very much, General.
Before proceeding, Senator Specter.

ARMY MUSEUM AND GRIZZLY SYSTEM

Senator Specter. Thank you very much, Mr. Chairman. I
wanted to join you in welcoming the Secretary and the Chief of
Staff and to state my cooperation in working on the
supplemental.
I am going to be submitting two questions for the record,
but I will briefly reference the issues. I have already talked
to Secretary White about the museum in Carlisle where we have
had a commitment from the Department and the last Secretary. As
is the case in Washington, nothing ever seems to be settled,
and this is part of an effort to have something outside of the
Washington, D.C. area. We have talked about it. We would like
to move ahead on this project because it is a matter of great
concern.
One other parochial matter, on the Grizzly program where we
put in $15 million last year, I will be submitting a more
extensive question for the record.
I join my colleagues in thanking you for your service, and
we will be helping.
Thank you very much, Mr. Chairman.
Senator Inouye. Thank you very much.
I notice there is a vote going on. So, let us get down to
business right away.
When will the Interim Brigade be ready for combat and what
will be the primary mission?

INTERIM BRIGADE COMBAT TEAM FIELDING

General Shinseki. Well, an exact date on that Interim
Brigade Combat Team is subject to the fielding plan that we are
in the process of developing. As you know, there was a hold on
production until a protest was resolved. Right now, it appears
that at the earliest a full fielding of that Interim Brigade
Combat Team occurs in the spring of fiscal year 2003.
Correction: in the spring of calendar year 2003, shortly before
I depart, in the May timeframe, where it would go for a full
initial operations capability shake-out. At that point, all
things working, as I trust they will, it would be ready for an
operational deployment.
That operational deployment could be for a scenario that
had a light force going in early with this brigade coming in to
reinforce it and follow it by a heavy tank brigade behind it.
So, it would be part of a larger deployment if it involved a
warfight scenario. If it were for a contingency, that brigade
should be able to go on its own and handle a wide range of
missions.
Right now, the spring of calendar year 2003 is when the
fielding plan comes together. We are working very hard with the
production folks to try to move that as far to the left as we
can. I will have a better date here sometime this summer.
Senator Inouye. Mr. Secretary, transformation obviously
calls for a change in just about every aspect of Army life,
everything from infrastructure on to training. With your vast
corporate management experience, do you have any ideas on how
this management transformation can be carried out?
Secretary White. Mr. Chairman, I think that, first, we have
to decide what the core and the non-core activities of the
Department are, just like any business. And for those
activities that we decide are non-core, we have to make
decisions as to whether we continue to do those in-house or
whether we seek partners in the private sector who can bring a
better value proposition, better service at a lower price. I
think the initial indications are that we are being very
successful in family housing privatization, for example. I
think utilities privatization is another area. I think there's
a whole range of what I would deem to be non-core activities
that we should seek help and support with from the private
sector, and that is what I intend to pursue.
Senator Inouye. General Shinseki, do you have anything to
add?
General Shinseki. I would only add that in terms of the
transformation efforts at fielding equipment, we have very
aggressively challenged the processes that we have in place
today, both for acquisition and testing and evaluation and
fielding. There seems to be a time factor applied to the
process that I need to understand a little better because it
also involves an extended fielding period. It also involves
increased costs. I think along with the Secretary's interest
about deciding what are core Government operations and what can
be privatized, I think we also want to look at efficiencies in
how we acquire, produce, and field equipment. I think there is
good reason to take a review of those processes.
Senator Inouye. I have many other questions, but Senator
Stevens.
Senator Stevens. We do not have much time on this first
vote.
As you stated, General, we provided I think $300 million
for weapons and combat vehicles and $200 million for the other
procurement account for your transition. Is that enough money
to proceed and keep the schedule you just outlined?
General Shinseki. That will take care of the brigades that
are identified for production, the first two. As you know, we
have a requirement to fulfill a comparison evaluation before we
can have a decision to go to the third brigade. We are now
trying to cost that test, but that money does not fully meet
our requirements for fielding those brigades. We will be
looking for additional help.

OBJECTIVE FORCE FIELDING

Senator Stevens. Is 2008 still your target for the total
Objective Force for the mark for completion of that transition?
General Shinseki. Yes, sir. Again, this is a mark on the
wall. It is the near side of that time frame, 2008-2010, where
we are intending to look at fielding that future Objective
Force before the end of the decade. Our intent is to begin that
process in 2008. Right now, a 2008 date is, I would say, front
soft because we are at this point investing in finding the
technologies that would give us the capabilities to produce the
hardware. So, that is a mark on the wall for us.
Senator Stevens. Secretary White, I was a little facetious
with you, but I was pleased to learn yesterday Mark Hamilton,
our distinguished President of our University of Alaska now and
former general, was your classmate.
Secretary White. Yes, sir.
Senator Stevens. Have you had occasion yet to find out if
we are going to get support from Office of Management and
Budget (OMB) for the Apache AH-64 for a multiyear acquisition
program that we initiated?
Secretary White. Senator Stevens, I am not sure. I know if
it is a 2002 budget issue, those discussions are still going on
today, as a matter of fact, with OMB, and hopefully they will
be concluded shortly.

ACTIVE COMPONENT/RESERVE COMPONENT INTEGRATION

Senator Stevens. We are quite interested here in this
committee also in the AH-64 transition for the Army Guard. I
have been very pleased with the way the Army, under General
Shinseki, has welcomed the new total force partnership with the
National Guard. Do you concur in those opinions?
Secretary White. I most certainly do, Senator. We have one
Army. I must say as the new guy, being gone 11 years, when I
look at the relationship between the Guard and the Reserve--
and, of course, General Shultz and General Plewes are with us
today. They will be promoted this afternoon to a 3-star rank,
reflecting the importance of those components of the total
Army. I am very encouraged by the way the Guard and the Reserve
and the active are integrated today, and it is my intention to
promote that.

DEFERRED FUNDING

Senator Stevens. I guess we ought to go, but one of the
last questions I would ask is when we went after the balanced
budget concept in the late 1990's, many people made statements
that once we stopped paying so much interest on the national
debt, that we would have available money to catch up with the
things we deferred at that time. We have deferred for several
years the proper funding of the real property and equipment
operation and maintenance funds for the Army. I think more than
any other service it has been underfunded in terms of the costs
of maintenance of particular facilities and their vehicles.
Have you had an opportunity to look into that problem, the
level of it and the gigantic size of this unfunded liability
that we have? Have you?
Secretary White. Yes, I have, Senator, in a preliminary
sense. And I agree with you. If you look at real property
maintenance, if you look at spares, we have not adequately
funded those, and I am hopeful that the 2002 budget revision
will reflect a strong commitment by the Secretary and the
President to fixing this readiness issue.
Senator Stevens. Well, I hope so because some people around
here where we live cannot seem to remember what they said when
we balanced the budget by deferring accounts. And it is true we
did. The difficulty is that we have not been able to go back
and catch up now using the money that otherwise would have been
used to pay interest and not fulfill any mission as far as the
military is concerned. I hope that you will be a voice in that
series of meetings with the Secretary to ensure that we have
sufficient funds for catching up with that major issue of
operations and maintenance.
Secretary White. I will, Senator, and I must say in all the
discussions we have had to date, that Secretary Rumsfeld is
intensely interested in this subject.
Senator Inouye. If I may, Mr. Secretary and General, call a
short recess. We will have to go to vote. We will be right
back.

LEGACY FORCE MODERNIZATION

General Shinseki, you have indicated in your testimony that
one of the most pressing concerns is modernizing the Legacy
Force. As you know, your Army is the most capable ground force
in the world. One of our concerns is that in your effort to
modernize the Legacy Force, would it mean that you would take
away resources from the transformation program?
General Shinseki. No, Mr. Chairman. Of course, you never
have enough to do both. So, for the Secretary and me, we have
to balance the requirements. But our priority is on
transformation, and that is where we intend to put our energy
both in science and technology investments, driven at a faster
acquisition pace. I look to the Secretary to help, with his
business background, how we do that better, faster, and more
efficiently.
Getting to that future Objective Force that we are trying
to transform is a matter of time and dollars. We have said we
are going to do that before the end of this decade, and we have
invested very heavily in science and technology so that in
about 2003-2004 we have the answers to the questions we have
asked that will lead to research and development to get to that
Objective Force capability. The luxury of having the time to do
that right, to come out with the right answers, the luxury of
that time rides on the readiness of the legacy force today. So,
there is an amount of funding, resourcing that needs to be
invested in that Legacy Force to make sure that it can meet
that non-negotiable contract with the American people every day
for the next 10, 12 years, however long it takes us to begin to
pick up momentum in Transformation, that today's Army can fight
and win wars and allow us the opportunity to get this right.
We have focused our recapitalization efforts. We have
focused our modest modernization investments into a single
core, one of four that we call the counter-attack force, and
that is where we are going to put, for the next 10 years or so,
our primary focus in terms of keeping us ready to do the
Nation's business and at the same time invest in that future
Objective Force so we get as much energy going there.

FORCE STRUCTURE

Senator Inouye. In balancing the needs of the military,
does that also include reduction of the force structure?
General Shinseki. It is not a consideration on my plate. I
have testified, I believe both before this committee and
others, that today for the profile of missions the Army is
asked to perform, we are not big enough to handle that mission
profile without a significant operational tempo (OPTEMPO)
impact on our people. And you see the impacts of that, great
youngsters who go out there and do not mind doing the heavy
lifting, but then show the effects of that significant OPTEMPO.
Some of our ways of mitigating it are we have passed some
of those operational missions to our Reserve component who do
some of those missions very, very well. In Bosnia today, over
2,000 of the soldiers on the ground handling the Bosnia mission
are out of our Reserve component. In Kosovo, over 700 of our
soldiers on the ground there are out of the Reserve component.
So, we mitigate some of that tempo that is caused by an active
component force that is smaller than the mission profiles we
are asked to perform, and then the resourcing of that force has
been less than we would like.
There is a finite amount of going to the Reserve component
to mitigate that OPTEMPO that we can account for. Beyond a
certain point, these great citizen soldiers do have other
careers that are full-time for them, and so going to them too
often creates a burden on them as well. It is a very delicate
act of balancing that the Secretary and I do in this regard.
Senator Inouye. I have many other questions, but Senator
Stevens has another engagement.
Senator Stevens. Well, thank you very much, Mr. Chairman. I
just have a couple of questions.

FAMILY HOUSING

Secretary White, when the Secretary of Defense was here
earlier, he indicated that he believed that we should set a
goal to eliminate all inadequate family housing and inadequate
barracks for single people by 2010. When Admiral Blair, the
Commander in Chief of the Pacific, was here, he outlined for us
the substantial backlog and really inadequacy in housing and
military facilities in Alaska. That is very worrisome to me
because unless there is substantial military construction
monies allocated to Alaska in this period of time between now--
it is only 8 years in the bill we are looking at now--the basic
facilities for the military in Alaska will be left behind
again.
As a matter of fact, the Senator and I share part of our
``pork'' titles because we constantly have to add to the
budgets prepared by the Department of Defense and the
administrations, whether they are Republican or Democrat,
monies to ensure the quality of life for the military people
that are assigned to our State.
Is this part of the program that you are working on with
the Secretary? I am not asking you to comment on it, but is it?
Are we going to get, as part of this plan, some indication of
how the Department of Defense can catch up in this critical
area? Operations and maintenance is critical in and of itself.
But I believe the impact on families has a lot to do with the
drop-off in reenlistment rates. Unless we get these facilities
really modernized and do it in the near term, we are going to
start losing more and more people who have families and are
going to be assigned either to Hawaii or Alaska.
What can we do about this backlog?
Secretary White. Senator, number one, I absolutely agree
with you on the importance of this. My wife and I raised a
family in military housing and on military installations, so I
have a personal appreciation for this.
It has been a central topic of discussion in our budget
deliberations with the Secretary and his staff, as we have
looked at fiscal year 2002 and going forward. We are committed.
I think without prejudging the outcome of where the fiscal year
2002 budget comes out to rectifying this, I think it is a
perfect example of a public/private partnership where we can
accelerate this process by bringing in private developers, as
we have at Fort Carson, so that we stick to the commitment of
getting this fixed by 2010. I know that the Secretary shares
our concern, as do all the services. So, we are putting an
emphasis on this.
Senator Stevens. We have supported privatization of the
offshore States, but privatization will not do it all in areas
where it is not economically feasible to achieve housing of the
types needed for our military families in the short term. I
would hope that we can find some way to deal with this.
There are Fortress America type people in the military who
believe that the two offshore States are overseas. As a matter
of fact, some of your people still refer to assignments in
Alaska and Hawaii as being overseas. That reflects into their
judgments as to how they allocate money for even things like
housing. If they continue in that, then our bases will be those
readily available for base closures because they are
inadequate. I think the Century of the Pacific calls for an
increased emphasis on forward deployed forces in Alaska and
Hawaii.
There are two critical elements as far as I am concerned.
One is the backlog in maintenance per se in the bases, but the
other one is in the backlog in modernization of the facilities
for the families. That includes not just housing but also the
basic facilities for family life on bases.
I would urge you to take a look at it because I have got to
tell you, on my watch I am not going to see bases closed in
Alaska because we failed to get the proper housing for people
or proper facilities so their families can enjoy life in our
two States. I am serving notice. I am going to try to amend the
budget to make sure that housing has the priority it must have
in this critical time of maintaining the forces on a volunteer
basis.
Secretary White. Senator, I agree entirely with that
priority. I think it is critical to us, as you touched upon. We
may recruit soldiers, but we retain families. This is a central
issue to support them, and it is receiving, from the Chief of
Staff and me and from the Secretary of Defense, top
consideration, and we will continue to do so.
Senator Stevens. Thank you very much, Senator.
Senator Inouye. For the record, I will be supporting the
Stevens amendment.
Senator Stevens. I will be supporting the Inouye amendment.
It will go further now.
Senator Inouye. Senator Bond.
Senator Bond. Mr. Chairman, thank you very much. Let me
note for the record that I am totally on board with it because
I think that Alaska and Hawaii deserve the utmost
consideration.
Just count me as a very strong supporter of that.
Senator Inouye. You got your project.
Senator Bond. I have to go join Chairman Mikulski in
opening another hearing. I wanted to extend a welcome to
Secretary White. We had a good visit yesterday. We talked about
our interest in readiness, and I asked some questions about the
Army aviation modernization plan and some problems we had
there. I just wanted to ask one question, if I could.

ARMY NATIONAL GUARD ROLE IN TRANSFORMATION

In light of the Transformation and making the Army a more
strategically responsive, full-spectrum force, I would be
interested in the role you envision for the Army National Guard
in the Transformation. Do you think their role will take on new
dimensions, be reduced, or remain relatively unchanged?
Secretary White. Senator, first of all, I appreciated very
much our visit yesterday.
I view, as does the Chief of Staff, both the Guard and
Reserve as critical components to one Army. As the Chief stated
a few minutes ago, they are actively involved in missions today
that 10 or 15 years ago they probably would not have been
undertaking, the 49th Armored Division in Bosnia, the 29th
Infantry Division about to depart.
General Shultz is behind us. We will promote him to 3-star
this afternoon, as General Plewes on the Reserve side will also
be promoted.
I think, as we transform the Army, the Guard and Reserve
will continue to represent critical components to our
capability and they will receive the priority that is
consistent with that importance.
Senator Bond. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Senator Inouye. Thank you.

DEPLOYMENT DURATION

General Shinseki, in response to my last question, you
mentioned the Balkans and the use of Reserve forces. If my
mailbag is any indication of concern, I believe most of my mail
referring to the Army would touch upon the Balkans. My question
is from your background and experience, can you give us any
appraisal as to how much longer our troops will have to be
deployed in Kosovo and Bosnia? I know it is not a fair
question, but I need some response.
General Shinseki. Well, Mr. Chairman, this is really a
policy question. Recall we went there in 1995 at the signature
of the Dayton Peace Accords initially for a year, which was
extended to 18 months and then subsequently extended to now
with an open time frame based on setting conditions for our
resolving our mission there and coming home. I do not have a
good time line.
But I will tell you that Bosnia and Kosovo are better
places today because of our presence primarily. Our soldiers
who go there encounter some turbulence because when you are in
a location for 5 years, there is constant turnover of having
troops there. We mitigate that turbulence by using Reserve
component formations who have been marvelous in performing that
mission. But we also mitigate some of that impact by limiting
the length of the rotation to about 179 days. But the mission
performed there by our soldiers is magnificent.
When I am there to speak to them, they feel they are doing
a meaningful job. They are doing it well. They do make a
difference. They do provide a living model of what a democratic
Army inside a civilian controlled enterprise, government, ought
to look like, sound like, act like. I think there are some
additional benefits that come from our presence. So, there is
good work being done there and our soldiers feel job
satisfaction from performing those missions.
But as to the timeline to meet the conditions for resolving
that crisis, I do not have a good answer for you.
Senator Inouye. I have been told that the morale among the
troops in the Balkans is a bit higher than the morale in
Continental United States (CONUS). Is that correct?
General Shinseki. Well, I would not make any comparisons
because today the Army is reenlisting at above our targets. We
are reenlisting right now at about 105 percent. In past years
we have been as high as 109 percent, but the highest of our
reenlistment rates comes out of soldiers who are either on
operation of deployment in the Balkans or have recently
returned. That sense of job satisfaction has a pretty
significant impact on their decisions about whether they want
to stay with the force or find something else to do.
Senator Inouye. I have many other questions, but I would
like to recognize Senator Cochran.
Senator Cochran. Mr. Chairman, thank you very much. I am
pleased to be here today to welcome the Secretary and
congratulate you on your new position as Secretary of the Army.
Secretary White. Thank you, sir.
Senator Cochran. General Shinseki, it is a pleasure to see
you again.
General Shinseki. Good to see you again, sir.

RESERVE COMPONENT PERFORMANCE

Senator Cochran. I was fortunate to be able to go down to
Camp Shelby, Mississippi recently, and I thank the National
Guard troops who were assembling there for training in
preparation for their assignment in Bosnia. About 500
Mississippians are undergoing this training in preparation for
a 6-month deployment as peacekeepers in that theater. I can
assure you they seemed to be excited about the opportunity to
go on this mission, and I am curious to know your reaction to
whether or not you think it is still a good idea to have
National Guard forces, Reserve forces deployed in this theater
and what their performance has been to date, and if we have the
funds in the training programs that will help ensure that they
are trained and can capably handle the mission and come back
safe and sound.
Secretary White. Senator, as General Shinseki just said, we
have had several deployments of National Guard forces into
Bosnia, the 49th Armored Division and the 29th Infantry
Division is about to go with the Mississippi contingent. I view
the deployment of Guard forces side by side with active forces
in Bosnia and other places as to be the true test of one Army,
that in fact we have one Army. If we are smart about how we
organize the missions for the Guard in terms of the lead time
and the training and all the other pieces that go along with
it, that they can be extremely effective and that they're
excited about that mission and that we should continue to do
it.
I think it shows how far we have come in integrating the
active component with the Reserve component that we are able to
do this. I think your sensing of it from visiting the soldiers
who will deploy is what I have gotten from talking with the
49th Armored Division soldiers and others, which is, this is a
great mission so long as we structure it properly, and we are
going to continue to do it.
Senator Cochran. General, do you have any other comments?
General Shinseki. I would love to add to that, Senator
Cochran. In our profession, in this ground force profession, so
much of our effectiveness in any of our missions, but if you
were to take the most intense of our missions, warfighting, a
key factor here is cohesion of units and the small unit
leadership where non-commissioned officers and junior leaders
are comfortable in their responsibilities.
In a mission like Bosnia, a 6-month tour there does wonders
in developing that small unit leadership, that if you were to
put the same unit in a peacetime training scenario back here in
the Continental United States, an active unit or even more
explicitly a Reserve component unit, just the time to be
together to learn how to go through their processes and their
procedures and to learn the art of leadership, 6 months in
Bosnia is an excellent leader development opportunity for non-
commissioned officers and junior officers. Our components are
going to be well served in future years as they grow up in the
profession for whatever crisis comes along.
Secretary White. Let me just say one other thing, Senator,
if you do not mind. The 29th Infantry Division is the division
that is about to deploy. Last week we celebrated the dedication
of the D-Day Memorial in Bedford, Virginia, the home territory
of the 29th. They, of course, were a lead division at Omaha
Beach in 1944. A lot of their veterans that were present at
that ceremony came up to me and said it was great that the 29th
had a mission side by side with the actives like they had on D-
Day. So, it is a big deal for us.

NATIONAL TRAINING CENTER

Senator Cochran. I recall the last mobilization of
Mississippi National Guard units in numbers like this occurred
in Desert Storm. I recall going out to the National Training
Center in California at Fort Irwin to thank the troops who were
out there doing what they needed to do to be prepared for
deployment to that theater.
I was very impressed with the National Training Center, and
I am curious to know whether or not you still think that is a
valuable resource for training. Is it being used? Are the funds
in the budget request that will be submitted sufficient to keep
it operating in a way that you think it is helpful to the Army?
General Shinseki. I would just comment that the National
Training Centers (NTC) are, for the Army, what makes our Army
different from all the others and put us at the head of the
line. It is where we go into full contact, force on force, both
sides trying to have the better day with a professional
opposing force that may be the best trained regiment in the
world out at the NTC or down in Fort Polk. It is a centerpiece
of our training programs. We do need to put money in there to
modernize them, as we modernize the rest of the force, because
when we go out there to train, our ability to get accurate data
on resolution of how those mock battles play out are very much
dependent on our ability to collect information.
You remarked the last time that the 155th Armored Brigade
stood up was in Desert Storm. The 155th stood up one other
time, Senator. In 1999, shortly after I became the Chief, we
mobilized them for an exercise and sent them to the National
Training Center. In July 1999, I had the opportunity to be out
there with General Shultz, and we watched the 155th Mississippi
go through its paces, much as you did. I will tell you that the
difference in their capabilities is significant. I am mighty
proud of that National Guard Brigade. It used to be my
counterpart Brigade when I commanded the 1st Cavalry Division.
Secretary White. Senator, let me make one other comment,
and that is I view the National Training Centers as critical to
support Transformation because as opposed to the transformation
of the Army after Vietnam, what the NTC and our other training
centers give us is the opportunity for high fidelity
experimentation and testing. As we bring the Interim Brigades
in, as we start to get new ideas coming out of the tech base,
it gives us a high fidelity test platform in those training
centers to try out new ideas as we shape the Objective Force.
So, not only for current readiness and training, as the Chief
talked about, but supporting Transformation will be a vital
activity to go on at the NTC.

155 MM LIGHT-WEIGHT HOWITZER

Senator Cochran. There is a new howitzer that I am advised
about, a 155 millimeter howitzer, lightweight, and the plans
are to develop, produce, and then test this at Camp Shelby,
Mississippi. I am curious to know whatever information you can
give me about that program. Can you tell us how it compares to
your existing legacy system in terms of survivability and
mobility, and does it support your Transformation requirements
as well?
General Shinseki. I would like to provide a more complete
answer for the record, Senator, about the programmatics that go
along with the lightweight 155 system. But it is one that we
focused on to provide for our interim capability that we are
standing up with brigades out at Fort Lewis, Washington, an
artillery capability that we currently lack. It went through a
competition and it was the system chosen. I am comfortable then
that it is the right answer.
In terms of how it is performing, I would probably have to
give you a better answer. But I think it meets our requirements
for the Interim Force, and I think the Marines are also
interested in it.
[The information follows:]

155 MILLIMETER LIGHTWEIGHT HOWITZER

The Joint Lightweight 155 millimeter Towed Howitzer will
replace all howitzers in the Marine Corps and most of the M198
howitzers in the Army. The Lightweight 155 is an integral part
of the Army's Transformation, as it will be fielded to our
Interim Brigade Combat Teams and light forces.
The Lightweight 155 program is a joint development with the
Marine Corps. The program management office is jointly manned
and supervised by both Services. The Marine Corps funds
development of the basic, optical fire control howitzer and
leads in production. The Army funds the development and
integration of digital fire control for the howitzer and
follows in procurement. The Marine Corps plans to procure and
field 413 Lightweight 155 howitzers between fiscal year 2003
and fiscal year 2007. The Army plans to procure and field 273
Lightweight 155 howitzers between fiscal year 2004 and fiscal
year 2009. Additionally, the Lightweight 155 is an
international cooperative program with the governments of Italy
and the United Kingdom. Each of these countries indicates they
will procure from 60 to 70 Lightweight 155 howitzers.
The prime contractor for development of the howitzer is BAE
Systems of the United Kingdom. The BAE Systems formed a team to
produce about 80 percent of the Lightweight 155 in the United
States. The current plan is for a member of the team, United
Defense, Limited Partnership, to perform the final assembly and
testing of the howitzer in Mississippi.
The Lightweight 155 is a substantial improvement in
mobility, survivability, and combat effectiveness over the
current M198 howitzer. At 9,000 pounds, the Lightweight 155 is
42 percent lighter than the M198. The reduced weight and
innovative design increase cross-country mobility by 23 percent
and reduce the time to occupy and displace by 74 percent. The
digital fire control improves accuracy and allows the howitzer
to adopt shoot-and-scoot tactics similar to those of the
Paladin self-propelled howitzer. The net result is that
survivability improves by 70 percent which, when combined with
the increase in mobility, significantly improves the combat
effectiveness of the fire support for our Interim Brigade
Combat Teams and light forces.

Senator Cochran. Thank you.
Mr. Chairman, I have some other specific questions about
other systems that we have an interest in in our State, and I
will be glad to submit those for the record.
Senator Inouye. Without objection, they will be submitted.
Senator Dorgan.
Senator Dorgan. Mr. Chairman, thank you very much.
Mr. Secretary, congratulations.
Secretary White. Thank you, sir.
Senator Dorgan. You and I have not had the opportunity to
spend time to visit, but I hope we can do that at some point.
General, thank you for appearing again.

DEPLOYED TROOP MORALE, TRAINING, AND READINESS

Let me ask a question that follows on something that
Senator Cochran or Senator Inouye may have asked about, and
that is troop morale and training and readiness and so on.
Senator Daschle and myself and some others were in Skopje,
Macedonia, and we were going to go up into Kosovo and the
weather would not allow that. But we met a number of the troops
and General Ralston was there. One of the points he made to us
was interesting. It was interesting to me because there is this
discussion going on that these kinds of operations really are
not good for morale, number one, and number two, take away from
training and readiness.
General Ralston made the point that he felt that it was
excellent training. He said nowhere in the Army are officers
and soldiers on the ground having real-time activities and
decision making opportunities like that. He said, frankly, it
does not injure readiness or training. In fact, he said it is a
contributor to good training.
Can you respond to that?
General Shinseki. Sure. Senator, I would echo General
Ralston's observation. As I remarked earlier, so much of our
profession is really tied to training and leadership, leader
development. We have few opportunities to take a good unit and
put them in an operational scenario where they have to learn
how to work together and, not in a totally benign environment,
have to deal with some pressures out there where they have to
go out on a patrol and young leaders take over. They do not
have the opportunity to have a colonel or a senior officer
standing over and helping give advice.
Every day in Bosnia, when I commanded there, something on
the order of 180 U.S. patrols would go out, executed for the
most part by non-commissioned officers, in some cases by junior
officers. They would mission brief. They would go out, execute
the control. Whatever happened out there they handled and then
came back and mission debriefed. I would suggest to you that
the fact that you did not see a lot of coverage of those 180
patrols going out tells you that they did those missions quite
well.
In the process, they grew in their leadership skills. They
created cohesive units that knew each other better, trusted one
another, and this is a lot of what our profession is about.
Yes, the tools are important. The tools will always be
important, but they do not substitute for good, cohesive units
that have strong leaders, and that is the training piece that
comes out of General Ralston's explanation.
There are some down sides. You miss the opportunity to fire
your big weapons systems and maneuver them, but we compensate
for that by getting all that work done before they deploy. They
are gone for 6 months. As soon as they come back, we get back
on that training schedule so that within about 6 to 9 months,
they are back in top notch readiness and we accommodate that.
Senator Dorgan. General, thank you very much.

BASE CLOSURE

Secretary White, I want to say on the issue of a base
closing commission you have been on record publicly saying you
would support one round or an additional round. I wondered do
you understand--you perhaps do--why there is some push-back on
base closing commissions?
Secretary White. Certainly.
Senator Dorgan. When we go into a commission, if we do not
have some notion of targeting where the excess capacity is
before you go in, every single military installation in America
essentially has a bull's-eye on the gate that says this might
be closed. In those communities, those smaller communities
especially, 30,000, 50,000, 80,000 people, there is nobody
going to invest in those communities until that is resolved.
They are not going to go build a 12-plex apartment unit or move
a new business in because base closing commissions may close
this base, and therefore you'll have double digit unemployment
in that region. It puts at risk a whole series of installations
that are probably never going to be closed and never even on
the cusp, but you dry up the economies.
It seems to me if there is a base closing commission--I am
not certain there will be another one at this point. I am not
certain that the Senate would support it, but if there is a
base closing commission, would it not be better to have some
basic targeting of where the over-capacity is and have a
commission that focuses only on that?
Secretary White. Absolutely, Senator. I think the cart is a
little bit before the horse.
The first thing we have to nail down is what the national
military strategy is, and of course, in the Quadrennial Defense
Review (QDR) process we are about and the Secretary of Defense
is about figuring out what that is. That is step one.
Step two is sizing the force against the strategy and that
will also flow out of the exercise that is currently ongoing.
And then the third step will be what is the most efficient
basing for that force, and only at that stage of the game, when
we try to figure out the most efficient way to base the force
and to support it from a business perspective, will we get into
the business of which infrastructure is excess or not.
This has got to be a strategy-driven exercise, and that is
the way the Secretary of Defense has set it up.
Senator Dorgan. Let me mention one other issue, and that is
dealing with trailers that the Army purchases.
I think the Army is a great organization. I have deep
admiration for it. I have spent a little more time working with
the Air Force because we have two large Air Force installations
in my State. But we have an Army National Guard, which I am
very proud of, and I will not ask questions about that except
based on your previous answers, I understand you know the
contribution they make and the significance of it.

ELIMINATION OF WASTE

I ran into an issue of some trailers here a while back, and
it reminded me again how terribly bureaucratic things can be at
the Pentagon, but probably all through Government. Someone
produced for you about 5,500 trailers and the brake actuator
hitch did not work, and so they have been warehoused now for I
think 3-4 years sitting in warehouses. As I looked at that, I
thought what a waste of money. How does this happen? As I
tracked it through, I realized we have entrenched bureaucracies
that protect what they do and make it very difficult for new
ideas to seep in.
Mr. Secretary, I was intrigued by the comments you made
about ``stupid'' waste. I suppose by definition most waste is
stupid, but perhaps some more stupid than others.
Secretary White. Yes, sir.
Senator Dorgan. But I like the attitude that much of what
we do is very important, but bureaucracies can also produce a
kind of a byzantine result from time to time. To the extent
that you can look into that and tackle that, I think you will
have the support of members of this subcommittee. We want the
investment in defense to be an investment in muscle and
strength and security, not in waste. So, I appreciate that
attitude that you bring to this job.
I just want to tell you the only recent example I have seen
is a little example about trailers, and I will talk to you
about that some other time.
Secretary White. But it is a great example, and I think it
would qualify as stupid.
Senator Dorgan. That is what I said.
Secretary White. Right. Yes, sir.
Senator Dorgan. But anyway, thank you all for being here. I
look forward to working with you. Let me just say, as I
conclude, I think the National Guard which you have referenced,
while it is not a substitute for active forces, we need active
duty forces and we need them well equipped and well armed with
modern weapons and supported well. We also need the National
Guard, and we get a terrific bang for the buck, as they say
with this National Guard. The men and women who are citizen
soldiers in our State and, as Senator Cochran said, Mississippi
and every other State in the country are a terrific complement
to what you do. I appreciate your support for them as well.
Mr. Chairman, thank you very much.
Senator Inouye. Senator Shelby.
Senator Shelby. Thank you, Mr. Chairman. I apologize for
missing part of this, but I was in another appropriations
subcommittee meeting.

ARMY AVIATION

General, I have talked with you at some length about the
Army's Transformation. And this may have been asked and I
apologize if it has because I was not here. I am pleased to see
in your testimony that you and Secretary White mentioned the
important role that the Army aviation, specifically the
Comanche, will play in the Transformation effort. You talk
about its role with the Transformation effort and its
operational capabilities, but could you for a minute also talk
about the current status of the program and discuss the
facilities and training components being developed with the
Comanche?
General Shinseki. For the Comanche?
Senator Shelby. Yes.
General Shinseki. Well, we are still a few years out from
fielding the Comanche, as you know, Senator, 2008. So, some of
the specifics of those decisions are----
Senator Shelby. But we have to start planning and building
whatever we need.
General Shinseki. Absolutely.
Senator Shelby. I have talked to Secretary White about
this.
General Shinseki. And the fielding plan will dictate where
we go first. But in the case of the Comanche, not only is it a
far more capable aviation platform and, therefore, its reach is
significant, it is also a very capable weapons platform. In
terms of training ranges that we need to develop that will
allow it to train safely, considerable work is underway to
figure out whether or not our current ranges can accommodate
them. Where can we shoot the Comanche with all of its
capabilities so you can train to its maximum potential? A
pretty significant question, and that is part of why we are in
the process of trying to decide whether our home stations are
adequate for training these new systems with greater
capabilities or whether we have to go some other special place
to do something like this, maybe out to the National Training
Center where today we primarily put ground forces and not a lot
of aviation units or some other place. But these are the kinds
of issues for long-term decisions that we are wrestling with in
order to make sure that when the Comanche arrives, those
questions----
Senator Shelby. That we will be ready.
General Shinseki. Yes, we are ready.

COMANCHE SOFTWARE SUPPORT

Senator Shelby. General, the Comanche platform contains
several million lines of software code in its operating system.
As the premier software development and support facility and
the only Government center to achieve a level 4 rating by the
Software Engineering Institute, the United States Army Aviation
and Missile Command (AMCOM) Software Engineering Directorate
(SED) could achieve significant software life cycle support
cost savings for the Comanche, as well as other systems with
similarly complex software operating systems. In other words,
the future.
Has the Army considered--and if you have not, will you--
assigning the Comanche software life cycle support to a
Government facility like the SED facility at AMCOM in order to
determine cost savings which might be derived from their
support capabilities, as well as the potential to leverage
aviation research and development? If you have not, will you?
General Shinseki. We are certainly going to look at it. I
did not have all those qualifiers for AMCOM, but if they are
the most capable center, certainly. We would go where the
capability is. Frankly, I do not know the answer to your
question, but I will get you one for the record.
Senator Shelby. Talk with me about it.
General Shinseki. Yes, sir.
[The information follows:]

COMANCHE SOFTWARE SUPPORT

U.S. Army Aviation and Missile Command (AMCOM) Software
Engineering Directorate (SED) personnel are currently working
within the Comanche office. The Comanche Program Manager's
office (PMO) is very familiar with the excellent capabilities
and expertise of the AMCOM SED. The Comanche program currently
plans for the Boeing Sikorsky team to maintain software for
three years after initial fielding, under management control of
the PMO and SED. This will be followed by a gradual transition
to the SED. At the end state, we anticipate that the AMCOM SED
will maintain the majority of all Comanche software.

Senator Shelby. General, would you discuss briefly the
importance--if you have, I will get it from the record--of the
compact kinetic energy missile technology as it relates to the
future combat systems and the importance of increasing science
and technology funding for basic scientific research at the
Army Aviation Missile Command?
General Shinseki. Yes, we are interested.
Senator Shelby. I know I am asking you some complex
questions. You might want to expand on it for the record.
General Shinseki. I will expand on it for the record. But,
Senator, I would say, yes, we are interested in it. A larger
version of that vehicle has proved out to have significant
capabilities. We are interested in a smaller package and this
is what we are interested in. We do have a program identified
to pursue the future technology here.

UNEXPLODED ORDNANCE

Senator Shelby. Lastly I want to get into unexploded
ordnance. Has it been talked about today?
General Shinseki. It has not.
Senator Shelby. Secretary White, more than 700 formerly
used defense sites and 1,000 of current military training
ranges contain conventional unexploded ordnance--we all know
the history of it--that pose a potential hazard. Contained
detonation chambers, such as the Donovan chamber, have been
built by the Army to safely destroy this unexploded ordnance.
What is your position, Mr. Secretary, on open burn, open
detonation methods to destroy conventional unexploded ordnance?
Secretary White. Senator, I am not familiar with the
specifics of the issue. I will have to get back to you.
Senator Shelby. Will you get back with me?
Secretary White. I will do that.
Senator Shelby. For the record.
Secretary White. Certainly.
[The information follows:]

UNEXPLODED ORDNANCE

The Army position is that open detonation is a safe and
environmentally sound method for destroying conventional
unexploded ordnance (UXO). Unexploded ordnance are used
military munitions that have been through all or a portion of
their firing sequence and are, therefore, assumed to be armed.
For this reason, the Department of Defense (DOD) has adopted an
open detonation policy for UXO, particularly when located in
areas like operational ranges or formerly used defense sites,
in which they do not present an immediate and certain risk to
the public, to include DOD personnel, or critical assets. In
such situations, open detonation exposes personnel, normally
DOD personnel who are trained and experienced in explosive
ordnance detonation, to the least risk of an unintended
detonation. Open detonation also allows the immediate
elimination of an explosives hazard.
The Army, through initiatives underway at the Center of
Excellence and Demilitarization, Huntsville Engineering Support
Center, and other organizations is searching for alternate,
safe technologies for the elimination of UXO. These efforts
include the development of improved detection technology, use
of robotics, and investigation of alternatives to open
detonation. The Donovan chamber is but one example of a
technology that might be used as an alternative to open
detonation of some munitions. Use of alternative destruction
technologies is usually premised on the assumption that
unexploded ordnance are safe to move. This often is not the
case because of the inherent explosive hazards of moving
unexploded ordnance.
Alternative technologies also have limitations. For
example, the Donovan chamber has specific limitations on
munitions configuration, size, and net explosive weight. Large
munitions or those with net explosive weight above 6.5 pounds
cannot be detonated in the transportable Donovan chamber.
Open burning and open detonation are essential methods of
destroying conventional UXO. Contained detonation technology is
being developed as a piece of the overall UXO elimination
toolbox. However, personnel safety and technology limitations
prevent it from being the solution to all UXO elimination.
In the case of DOD's industrial demilitarization program
for excess and obsolete munitions, the Army has made a
concerted effort to reduce its reliance on open burning/open
detonation (OB/OD). Over the past decade, the Army has
significantly reduced its reliance (from almost complete
reliance to less than 40 percent reliance) on OB/OD in its
industrial munitions demilitarization operations and has
focused on reuse, resource recovery, and recycling. However,
the Army must continue to rely on OB/OD for unstable, excess,
and obsolete munitions for which no safe alternative
technologies currently exist, while ensuring minimal
environmental and public health impact. The Army performs OB/OD
in compliance with environmental regulations and permits.
Some of the actions that the Army takes to optimize and
monitor the use of OB/OD as a means of industrial-scale
munitions demilitarization include adherence to stringent
standing operating procedures that outline the weather and
other conditions under which OB/OD is prohibited; installing
air quality and noise monitors to record the impact of OB/OD on
the surrounding communities; environmental sampling as a part
of the health risk or public health assessments performed by
the Army and/or the Agency for Toxic Substances Disease
Registry; close cooperation with the local, state, and federal
regulatory agencies; and out-reach programs.
With regard to industrial demilitarization, the Army
currently is conducting a study of a number of alternative
demilitarization technologies as directed by the Congress.
These include contained detonation, supercritical water
oxidation, biodegradation, incineration, and others. The House
Report 106-754 requires DOD to report back to the Congress by
September 30, 2001, on the possibility of phasing out OB/OD in
favor of alternative technologies. We will provide a report to
Congress on our findings.

Senator Shelby. And what technology you all will support
here. I know this is a problem not just in some of my State,
but I guess everywhere we have had training.
Mr. Chairman, I have some other questions, but I will
submit them for the record. And I thank you.
Senator Inouye. Without objection.

CRUSADER

General and Secretary, I would like to ask my final
question. The Crusader field artillery system has come under
significant scrutiny, and some of the critics have even
suggested its elimination. I would like to hear your appraisal
and your reasons for continuing the program.
General Shinseki. Let me just say for the Crusader program,
the requirement is valid. The challenge of the Crusader is it
was designed heavier than it should have been. But the Crusader
in all of its other aspects satisfies the requirement that we
have had since the Cold War ended.
As we set ourselves up to fight successfully during the
Cold War in Europe, we anticipated fighting essentially a
defensive battle in which the other side would attack, and as
they continued to come after us, would fall under our arc of
fires. So, we designed artillery systems to take advantage of
that. They did not have to be very fleet. They did not
necessarily have to have long reach because defending against
an attacking force, they generally come into your arc of fires.
The Cold War ended in November of 1989, and literally a
year later we were off to Desert Storm. Not much time to gather
ourselves from 40 years of looking at our warfighting
responsibilities one way and, in less than a year, presented
with a new mission requirement. Desert Storm required us to go
on the offense, and when you go on the offense, your artillery
guns have to keep up with your tanks. If they do not, your
tanks stop until they can catch up so that you can get that arc
of protective fire.
Then you find out that the artillery range on your guns are
outmatched by the other side. In fact, the other side has more
guns and they can fire more accurately.
We understood that in 1991 we had to do something about
this, and so the Army took 25 percent of its artillery out of
the force, took the risk of doing without 25 percent of its
needed artillery, not very good, but needed artillery, and went
after some technology that would correct those shortcomings,
technologies like longer range, technology like higher volume
of fire, 10 rounds in a minute, where our standard artillery
pieces probably shoot 1 round a minute. So, what that means is
with a single artillery platform, you can now mass fire in a
way that you needed 8 or 9 or 10 guns to get the same kind of
volume, an artillery piece that is more accurate. So range,
rate of fire, and mass, more accurate, and a vehicle that could
now keep up with your tanks and your infantry fighting
vehicles. So, you did not have this break in warfighting
momentum.
We even went so far as to take 25 percent of our tanks and
our infantry fighting systems out of our warfighting battalion
formations. So, we went from tank battalions with 58 tanks to
tank battalions with 44 tanks; infantry battalions with 58
Bradleys to 44. Twenty-five percent degradation, accepting risk
because there was not a war on the horizon, betting on the
outcome that our systems would provide us an artillery piece
that would compensate for taking that risk.
Well, that artillery system ended up being Crusader. I
think the problem with Crusader is it ended up being bigger
than it probably should have been. We have taken significant
steps to reduce it from the 55-ton artillery piece to about 40
tons, and we constantly look for ways to make it even lighter.
We have taken the risk, and if we decide that we do not
need the Crusader, we will go for the next 10 to 15 years until
we find in the objective force a fix or a back-fill for that
capability that will extend our risk window far more
significantly in the future. That is why I say the requirement
for the Crusader is a valid requirement, and I have testified
to that.
Secretary White. Let me add to that, Mr. Chairman, in that
we in the United States Army have had a long and time honored
tradition of being outgunned by our potential adversaries,
particularly in regard to anyone equipped with Soviet
equipment. As a former maneuver commander in Europe, that was
always, as General Shinseki talked about, our principal
concern.
We never fixed it during the big five transformation of the
1980's. We retained the 109A-2, which was the companion
artillery piece of the M60 tank. We have now product improved
it up through Paladin, and that is about as far as you can
stretch that rubber band.
The Crusader comes in to fill the gap that we have already
paid the bill for and is a carrier for technologies that we
will very much want in the Objective Force, i.e., robotics and
digitization. So, from both a Transformation perspective and a
current readiness challenge, capabilities challenge with the
existing force, Crusader appears to be the answer, if it does
what it is billed to do.
Now, having said that, we have a Quadrennial Defense
Review. A National Military Strategy will flow from that
review. Against that strategy, all of the major programs of the
Department, not just Crusader but the fighter programs and so
forth, will have to be balanced against that. So, we will argue
that case as a part of whatever role land power plays in this
new strategy. It is just that we have to make that case, but
from where I sit right now, Crusader is an answer to a
longstanding problem with the Army that we have not fixed in
previous years.
Senator Inouye. If I may ask a further question. You spoke
of the range of the Soviets. What is the comparable range
between the anticipated Crusader range versus the Soviet range?
Secretary White. I think Crusader, Mr. Chairman, against
comparable sized artillery will outgun what we expect to see on
the Russian side. We can, with extended projectiles, get out to
40 kilometers roughly, which is more than double the range of
the 109A-2 and should give us a range advantage so that we can
take full advantage of the family of precision guided munitions
that we expect to field that would significantly improve this
footprint of indirect fire coverage to support the maneuver
force. That footprint will be very consistent with the enhanced
maneuver capability we expect to build in the Objective Force.
Senator Inouye. What is the range of the Soviet gun?
General Shinseki. They have a range of artillery pieces, so
there are different ranges that are provided by different
categories of artillery. But the Crusader would range the best
of what they have now.
There are rockets that would exceed the range of artillery
pieces. Let me qualify that, Senator. There are some artillery
pieces that would challenge the range of the Crusader. There
are some that exceed it.
But, again, what the Crusader gives you is a volume of fire
that is 9 or 10 times the rate of fire of our current systems
so that you make up a considerable difference here with the
rate of fire that the Crusader provides.
Plus, I would echo a good point that the Secretary
provides. It is a technology carrier for future systems and
what that might open up in terms of increasing, improving range
and advantaging ourselves of this technology.
Senator Inouye. Senator Cochran.
Senator Cochran. Mr. Chairman, thank you.

THEATER HIGH ALTITUDE AREA DEFENSE (THAAD) PROGRAM ACCELERATION

Mr. Secretary, in the joint statement which you supplied
the committee with General Shinseki, under the title Legacy
Force Modernization and Recapitalization, there is a statement
as follows: ``Fielding the Patriot Advanced Capability-3
missile defense upgrade and the Theater High Altitude Area
Defense system will significantly increase our in-theater force
protection.''
I know that when we saw the original schedule for the THAAD
program, it was to be in the field in 2002, but because of
program delays and an exhaustive testing program, which has
proved to be very encouraging, that target date for putting
THAAD in the field is now 2007. We understand from some of the
program officials that if we had more funding in the program,
we could move that date up, perhaps as much as a year or 2.
Do you support adding funds to the budget to reduce the
delay in bringing the Theater High Altitude Area Defense system
to the field?
Secretary White. Senator, I will have to defer either to
the Chief of Staff or get back to you for the record for that.
I have not examined that issue in great detail at this point.
General Shinseki. I would like to provide an answer for the
record as well, Senator. I am always surprised when we say we
want to accelerate, and when I get into it, you cannot do it
and it is not a question of money. Sometimes it is a question
of other technology that has to be achieved. But I will get
into THAAD.
I am a bit frustrated with all the promise that is there,
both between PAC-3 and THAAD. We have taken the harder route on
missile defense. As you know, there are two schools. One says
you can fire a missile that, when it explodes, provides a blast
fragmentation effect and it blows the other missile out of its
trajectory so that you keep it from hitting its target. As a
result of our Desert Storm experience with one of those
episodes in which a Scud missile warhead was not neutralized,
tumbled out of control, hit a warehouse, and killed a number of
youngsters I believe from Pennsylvania, one of our fine Reserve
component units, we decided that blast frag was not good enough
for a ground force that would always be living under the
effects of fallout.
So, we took the harder route and went the point kill
approach, and that said we are going to hit a speeding bullet
with a speeding bullet and destroy it positively in order to
assure ourselves that we would not suffer the same kind of
consequence.
That approach has contributed to a tougher testing scenario
and, in part, is maybe contributing to the timeline. But we
have achieved through testing, demonstrating to ourselves and
to others who were a bit skeptical about whether or not this
was too hard to do, harder than hitting a major league fast
ball, first of all, seeing that incoming missile traveling at
thousands of kilometers per minute, and then hitting it at the
exact point of intercept within millimeters of where we said we
needed to hit the warhead in order to neutralize it up there in
altitude. We have done that and done that several times now. We
are comfortable that we can do this and demonstrated it.
Whether or not we can accelerate that capability back from
2007 or 2008 this way, I will have to get into it and provide
you a better answer.
[The information follows:]

THEATER HIGH ALTITUDE AREA DEFENSE (THAAD) PROGRAM ACCELERATION

We have had several opportunities for program acceleration
over the last two years because we were in the design phase of
engineering and manufacturing development (EMD) when resources
could be effectively applied to this program. Unfortunately,
additional funding was not available during this period and
program acceleration opportunities have diminished. We are now
beginning the component fabrication phase of THAAD EMD hardware
where disciplined, high-quality hardware assembly, software
coding, and testing take a fairly standard time to accomplish.
Today, we have one viable low-risk acceleration option.
THAAD first unit equipped (FUE) and early operational
capability (EOC) could be accelerated one year. This would
accelerate not only FUE and EOC, but also all testing and
production so that all THAAD units are fielded a year earlier.
We adopted this acceleration strategy because if FUE is
accelerated, we assumed that the rest of the program would be
accelerated following FUE.
THAAD schedule acceleration can be achieved by concurrently
conducting missile design trades and tests and by compressing
the test schedule by five months. Lead times for tests,
analysis, and modifications will be somewhat reduced and lead
time for test hardware will occur earlier. System critical
design review (CDR) would be accelerated by six months.
To complete this acceleration option, the program requires
an additional $191 million beginning in early in the first
quarter of fiscal year 2002, and a total of $736 million
through fiscal year 2007. Additional funding in fiscal year
2002 to fiscal year 2004 will provide additional test hardware
for incremental design tests, pulling software builds forward,
and additional up-front manpower. Additional funding in fiscal
year 2005 to fiscal year 2007 will allow earlier procurement of
production hardware, ultimately cutting a year off production.
These schedules allow earlier design decisions, long-lead
time, and low cost, schedule, and technical risk while saving
$379 million in acquisition cost through fiscal year 2012. The
scope of work and technical content of the program will remain
unchanged. The Army supports additional funding to the budget
to accelerate fielding of THAAD as an effective upper-tier
theater missile defense land-based system.

FUNDING CHALLENGES

Senator Cochran. One of the funding challenges is that in
the Ballistic Missile Defense Office, they take the funds that
we appropriate and actually develop the systems, but then when
they are ready to be put in the field and managed, the funding
goes through the individual services, like the THAAD program
would.
Does this present a problem because it is competing with
other priorities and other interests that the service has, and
would it be more effective and would we get the systems
developed and in the field earlier if the funding went through
the Ballistic Missile Defense Organization (BMDO) rather than
the service?
Secretary White. Senator, that is probably a question
better answered by the Secretary of Defense. I am sure with his
publicly stated interest in ballistic missile defense, that
that issue will get a thorough review.
Senator Cochran. Where generally are these missile programs
in your order of priorities? Can you tell us anything about
what your views are?
Secretary White. It is a little early for me to form an
opinion on that, Senator, but I will defer to the Chief on that
question, if it is okay.
General Shinseki. Missile defense for tactical ballistic
missile issues has always been a high priority for a force that
is on the receiving end of these things. So, yes, in balance
with lots of other things we are asked to do, Senator, theater
missile defense is of high priority with us.
In fact, regarding your question about THAAD and PAC-3,
much of that work is done inside of the Ballistic Missile
Defense Office with an Army lead. So, we have been part of the
real success story here in providing that kind of scientific
insight, intellectual energy to go get it. We are mighty proud
of the successes in those two programs, and the return will be
protection of soldiers on the ground. So, it is a high priority
with us, but there are other things we also pay attention to.
Senator Cochran. Well, I think you have every right to be
very proud of your success in this area. It is commendable, and
I congratulate you for it.
Senator Inouye. Senator Shelby.
Senator Shelby. I have no more questions.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. Then, once again, Mr. Secretary, General
Shinseki, thank you very much.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted to Thomas E. White

Questions Submitted by Senator Tom Harkin

IOWA ARMY AMMUNITION PLANT

Question. The Iowa Army Ammunition Plant (IAAAP) presents some
unusual issues because for many years an Atomic Energy Commission (AEC)
nuclear weapons plant and an Army ammunition plant coexisted at the
same facility. Recently the Department of Energy, as at other nuclear
weapons facilities, has taken important steps to address the health
concerns of former workers, including testing for chronic beryllium
disease and a health study conducted by the University of Iowa that has
highlighted a number of other exposures of concern. Yet those measures
have only included the AEC side of the plant.
Workers on the Army side worked at the same plant, for the same
contractor, and sometimes in the same buildings or areas. They were
exposed to many of the same dangers, including beryllium, depleted
uranium, and toxic explosives. And they were equally committed to our
national security. In fact, the health study started with a card
catalog of workers throughout the plant and has had a hard time
separating out those who happened to work on the AEC side. I can't
explain to my constituents why only some workers are included.
Secretary White, would you support similar health studies and
testing for those who have worked on the Army side of the plant, so
they can know whether their health has been harmed by their work at the
plant?
Answer. The Army has been and remains committed to protecting the
health of its workers. I would support epidemiological health studies
and appropriate testing to determine if there is an association between
the workplace and illnesses at IAAAP during the period in question. We
will recommend that the Office of the Secretary of Defense consider a
collaborative effort with the Department of Energy, where appropriate.
Question. Because of the joint facility, the Pentagon's secrecy
policies have also discouraged workers from talking to officials about
incidents and possible exposures at the plant, or even from talking
with their own medical providers about their health concerns. Last year
I was able to include in the Defense Authorization bill a provision
requiring the Secretary of Defense to review the secrecy policies, to
notify affected workers of how they can talk about these issues, and to
report back to Congress by May 1st. Not only has the report not been
delivered, but there seems to be an internal squabble over who is
responsible for it.
Would you intervene at least to make sure that someone in the Army
talks to the workers to help them talk about these issues without
revealing any current national secrets? Do you see any danger to
national security in saying where nuclear weapons were in the United
States 30 years ago?
Answer. Nothing prevents the Army from discussing health issues as
long as the presence of nuclear weapons is neither confirmed nor
denied. There should be no impediment to any federal employee, service
member, or contractor from discussing exposure to any materials with
their health care professionals or other officials as long as they do
not affirm or deny the presence of nuclear weapons at a specific
location or specific time.
The locations of former nuclear weapon storage sites within the
continental United States are unclassified, but the location and
confirmation of nuclear weapons at current sites is classified. The
neither confirm nor deny (NCND) policy is a national policy stating
that the U.S. Government will not confirm or deny the presence of
nuclear weapons at any specific site or location, independent of the
classification. As long as the specific locations of nuclear weapons
remain classified, we must continue to protect these locations through
consistent and unyielding NCND responses. The NCND policy only protects
current and future locations by being consistently applied 100 percent
of the time to all locations, including former sites.

ROCK ISLAND ARSENAL

Question. I would like to turn now to the Army's arsenal organic
base. The Army's arsenals, like some contractors, have suffered due to
the reduction in forces over the past decade. Yet preserving the
arsenals' unique capabilities is critical for current needs, for
occasional emergencies, and for possible wartime requirements. I am
very pleased that recent efforts by the Army Materiel Command to use
the arsenals' capabilities have resulted in the first significant hire
of workers at the Rock Island Arsenal in over a decade. These efforts
preserve needed skills and capabilities at the arsenals and reduce
excessive overhead costs for other work there.
Secretary White, will you encourage efforts to allow the arsenal to
compete fairly for workload?
Answer. Yes. I agree that fair competition will play a critical
role in the arsenal's future. Further, we will continue to use Rock
Island Arsenal's experience and unique expertise during heavy gun
development, especially producibility and manufacturing planning. Rock
Island Arsenal has personnel with advanced metalworking skills who are
on an equal footing with American industry when considering experience
in working with titanium, lightweight, high-strength alloys, and
composite materials.

HIGH MOBILITY TRAILERS AND WASTE

Question. Secretary White, you have been quoted as being eager to
get rid of ``stupid'' waste. I have been fighting waste and abuse at
the Pentagon for years, so I applaud your determination. Can you give
any examples of steps you will take to eliminate waste or of waste you
want to eliminate?
Answer. The Auditor General as a member of the Secretary's staff is
responsible for identifying ways to improve Army mission capabilities
and management practices and eliminate fraud, waste, and abuse. The
Army Audit Agency, under the direction of The Auditor General, conducts
over 500 audits and reviews annually that focus on improving the Army's
operational effectiveness and management practices and eliminating
waste. The Agency, on average, identifies over $1 billion in potential
savings for the Army annually.
Some recent examples of these audits include: use of rail cars for
transporting equipment to combat training centers; energy savings
performance contracts; the Army lodging success program; the Army
Morale, Welfare, and Recreation program, Europe; and equipping Interim
Brigade Combat Teams.
In the installations area, we are looking at things like
privatizing family housing and utilities when it makes sense to do so.
These are areas which are non-core to the Army mission. We want to turn
these functions over to private entities that can provide the services
more efficiently than the Army. Another area is our leasing program,
where I believe we can get out of high-cost leases and onto government
installations with some up-front construction funding. We also need to
take a look at the contracting of firefighters and security guards.
Current law denies us the opportunity to contract these functions.
However, we believe that we could provide the services in a more
economical while ensuring the safety of our soldiers, their families,
and civilians.
Other areas of consideration include, but are not limited to,
improving the efficiency and effectiveness of transportation, financial
management systems, working capital revolving funds, video
teleconferencing and telecommuting, system action review council data.
The continued evolution of The Army Plan and the concomitant
Transformation Campaign Plan will ensure we eliminate waste by
achieving unity of effort among force, resource, and modernization
requirements and not squander scarce resources. The reengineering
process continues to shift emphasis in Army planning from threat-based
planning to capabilities-based planning and the establishment of
performance standards that focus on the future and how much of that
capability is needed. Capabilities-based planning is required to
mitigate risks associated with the long-term challenges of
Transformation and to hedge against mid-term strategic surprise. The
end result is an Army document that selects, develops, and resources a
portfolio of key military capabilities to prevail over current
challenges, while transforming the effectiveness of the Army to meet
the evolving, less certain security challenges of the future.
Question. One of the programs I have followed with great interest
is the purchase of high mobility trailers for the high-mobility,
multipurpose wheeled vehicles (HMMWV) humvees. The program office
believes they have finally figured out how to fix these trailers, which
sat unusable in warehouses for years. How many of these trailers are
now in use in the field? How many humvees have been modified to pull
them? Have there been any problems with the trailers that are in use?
What are your plans for purchase of additional trailers that I
understand are still needed?
Answer. Approximately 695 high-mobility trailers have received the
fixes and are in the process of being fielded. For every high-mobility
trailer that a unit receives, two HMMWVs are retrofitted with the
cross-member upgrade kits. There are no reports of any problems with
the modified system. The Army has an acquisition objective of 25,112
trailers. We will pursue a competitive procurement to meet this
objective as we develop our program and prioritize our requirements.
Future procurements will benefit from the improvements developed in the
current fixes and be included in the technical data package for future
buys.
______

Questions Submitted by Senator Arlen Specter

GRIZZLY

Question. Secretary White, in fiscal year 2001 the President's
budget terminated United Defense's Grizzly obstacle breaching system.
However, the Appropriations Committee restored $15 million for the
Grizzly program in the fiscal year 2001 defense appropriations bill
through an amendment offered during the subcommittee markup.
Although the Army still has a requirement for a mine-clearing
vehicle, the Army has not requested that this funding be released by
the Office of the Secretary of Defense. Do you plan to request this
funding?
Answer. No. The decision not to fund the Grizzly program was based
on Army Transformation priorities and an assessment of affordability.

ARMY MUSEUM

Question. Secretary White, last year former Secretary of the Army
Louis Caldera stated that the Army plans to build two new museums: one
in Carlisle, Pennsylvania, and another in Washington, DC. He agreed
that the Army would support a ``first class'' museum in Carlisle even
though that site would not be ``the official National Army Museum.''
To that end, what active steps has the Army taken to provide
assistance in planning and coordinating the project with the Military
Heritage Foundation and others in Carlisle? Further, what are your
plans with regard to the creation of a National Army Museum?
Answer. To facilitate rapid collection acquisition, the U.S. Army
Center of Military History (CMH) granted the Army Heritage Museum (AHM)
in Carlisle provisional museum status on September 29, 2000. CMH is
continually reviewing the storyline and collection requirements of the
AHM. To help with property accountability and planning, CMH conducted a
staff visit and review of operations at the AHM with special emphasis
on future needs. This provided a road map for future planning. To help
with the automation of records management, CMH provided the universal
site artifact management system (USAMS) for computerized inventory of
historical artifacts in the collection. In addition, one member of the
staff was invited to participate and successfully completed the
combined USAMS/Basic Curatorial Course in February 2001. The CMH
conservator has conducted an assessment of the existing collection to
identify requirements and ensure the long-term protection of the
collection. The CMH is currently preparing a statement of work to
provide contract support for data entry into the USAMS.
The Chief of Military History briefed me regarding site selection
for a National Army Museum in the National Capital Region (NCR). I have
decided to have a museum of national scope in the NCR and am reviewing
the alternatives. I plan to make a decision well in advance of the
Congressionally directed report date of October 30, 2001.
______

Questions Submitted by Senator Kay Bailey Hutchison

CONUS HOUSING PRIVATIZATION

Question. I was very happy to announce on June 1st that the Army
was finally moving forward with the privatization of housing at Fort
Hood. I commend the Army's lead in ensuring that our soldiers and their
families have safe and adequate housing. At what other facilities are
you planning similar, total privatization efforts?
Answer. The Army has awarded community development management plans
at four pilot sites--Fort Carson, Fort Hood, Fort Lewis, and Fort
Meade. Pending OSD and Congressional concurrence, the Army plans to
solicit 25 additional privatization projects between fiscal year 2001
and fiscal year 2003. The candidates are for fiscal year 2001, Fort
Bragg, Fort Campbell, Fort Stewart/Hunter Army Air Field, and Fort
Polk; for fiscal year 2002, Presidio of Monterey, Fort Irwin/Moffett
Federal Airfield/Camp Parks/Fort Hunter-Liggett, Picatinny Arsenal,
Fort Detrick, Walter Reed Army Medical Center, Fort Hamilton, Fort
Belvoir, Fort Eustis/Fort Story, Fort Shafter/Schofield Barracks, Fort
Riley, Fort Leonard Wood, and Fort Leavenworth; for fiscal year 2003,
Fort Sam Houston, Fort Bliss, Fort McPherson, Fort Gordon, Fort
Benning, Fort Rucker, Redstone Arsenal, Fort Drum, and Fort McCoy.

OVERSEAS HOUSING PRIVATIZATION

Question. Is the Army pursuing any similarly innovative housing
initiatives overseas? For example, has the Army discussed with the
Germans, Japanese, or Korean governments the possibility of those
foreign governments could construct housing for use by American service
members, which could revert back to control of the host nation in, say,
50 years?
Answer. Yes, the Army looks for host nation funding whenever
possible. In Korea, Republic of Korea funded construction (ROKFC) funds
can be used for construction of Army family housing. The ROKFC program
provides the funds to the U.S. Government for Corps of Engineer design
and construction. The Eighth U.S. Army's family housing master plan
calls for the construction of 96 ROKFC funded units per year between
fiscal year 2001 and fiscal year 2010. In Germany, limited residual
value funds are available. Current projections estimate that
approximately $15 million will be available by fiscal year 2003 to fund
family housing renovations. In addition, U.S. Army, Europe is looking
at finding private investors to build family housing where feasible and
rent back to the Army. In Japan, the Japan facilities improvement
program (JFIP) provides limited funds for operating Army family housing
utilities and replacement construction. However, the schedule of JFIP
is at the discretion of the government of Japan.

WELL BEING

Question. In addition to providing more adequate family housing,
what other quality of life issues need to be addressed today?
Answer. The Army needs to stay on track to finish building barracks
to the 1+1 standard for permanent party soldiers by 2008. Beyond that,
we need to improve physical fitness training centers for our soldiers
and improve Army National Guard and Army Reserve facilities.
The percentage of enlisted soldiers who have some college education
has doubled since 1985. This provides them with lucrative employment
opportunities in the civilian sector. To retain these soldiers, we need
to increase their salaries to compete with civilian wages.
Army warrant officer recruitment is seeing a downward trend since
last year's pay table reform, which raised pay for E-5 to E-7s. Warrant
officer pay should be proportionally increased to keep pace with raises
in NCO salaries. Failure to do so would further compress the pay table
and there would be no incentive to become a warrant officer.
The Army is experiencing a greater than historical captain's
attrition. This attrition increase alone would not be significant, but
when combined with smaller year groups assessed during the draw down
and decreasing end strength targets, each captain loss has a much
greater impact. The O-3 pay cell is the only grade in the pay table
where the Army and other Services are currently having problems with
retention.
The Surgeon General has identified for fiscal year 2002
requirements in excess of funding for the direct-care system of $675.1
million, including $347.4 million identified as critical. This
shortfall is in addition to any potential shortfalls identified by the
TRICARE management activity related to private sector care through the
Managed Care Support Contract.
Personnel tempo (PERSTEMPO) is one of the primary quality of life
factors impacting unit readiness. Key concerns are military
occupational specialty (MOS) retention rates; non-availability rates of
personnel resulting from the Army's deployment stabilization policy;
the number of training days a unit requires after a deployment to
achieve combat readiness; the skill tempo by MOS and the deployment
tempo of units that fall into the high-demand/low-density category.
Although studies show that some level of deployment is acceptable, when
the length and frequency of deployments increase, it negatively affects
the Army's ability to retain soldiers and man the force.

BASE CLOSURE

Question. Secretary White, an article ran in this Monday's Defense
Daily indicating that you would support at least one additional round
of base closure. I am not sure that we have actually realized any cost
savings from the last few rounds of Base Realignment and Closure (BRAC)
due to environmental clean-up and other turnover costs. I am also
concerned by the way Department of Defense (DOD) presently manages its
infrastructure. How can the Congress confidently grant base closure
authority, given that the Department currently does a sub-par job of
managing its facilities? If granted such authority, how would the Army
maintain enough facility growth capacity for surges or if overseas
units had to redeploy to the United States?
Answer. The Army manages its facilities professionally and to the
best of our abilities within the resources provided. We managed the
previous four BRAC rounds successfully. We reduced our real property
inventory by approximately 21 percent and were able to realign selected
installation functions to gain synergy that would not have been
possible otherwise. Estimated savings from the previous BRAC rounds
combined is $944 million per year, which includes savings from military
construction, family housing, operations and maintenance, and
personnel. The break-even year of savings greater than costs was 1997.
Environmental cleanup costs to date have been $2 billion with estimated
remaining costs of $1.07 billion. The Army's remaining BRAC
environmental liabilities can be paid with slightly more than one year
of savings. However, we recognize that we still have excess facilities
that can best be corrected through comprehensive BRAC authority to
close and realign our bases to fit the missions and requirements of the
transforming Army.
Previous BRAC analyses followed a formalized process. Part of the
process established the military value of our installations. BRAC
analyses included evaluation of installation capacity to support all
military requirements including contingencies, redeployments, and force
structure surges. If new BRAC authority is granted, the next BRAC
analysis process should include similar evaluations that can address
potential facility-growth capacities for changing Army missions or
restationings.

INSTALLATION SECURITY

Question. I understand the necessity of improving security on our
Army bases, in light of today's increasing threat of terrorism.
However, as many facilities are considered an integral part of the
communities in which they are located, I hope the Army will coordinate
its efforts with state and local leaders, and will publicly explain the
rationale behind its moves. Will you commit to making such efforts?
Answer. As you mention, the threat to our military installations is
increasing. To address these risks, we are taking positive steps to
increase security measures to protect the people and property on our
posts worldwide, including limiting access to our facilities. We
recognize that the communities in which we live and work are an
integral part of our Army. As such, we coordinate all of our security
efforts with community leaders. Our provost marshals maintain constant
liaison with local and state leaders and police agencies in the
coordination of security matters, including sharing criminal and police
intelligence, especially in police response operations. We have
undertaken an aggressive campaign to inform the communities of our
actions in controlling access to Army installations. The Army requires
that commanders coordinate with local, state, federal, or host country
officials to ensure integrity of restricted access and to reduce the
effect on surrounding civilian communities. Our access control measures
are consistent with applicable law and consider statutory and local
labor-relation obligations. Persons not associated with the performance
of the installation mission, i.e., visitors, will be required to obtain
a temporary visitor pass to gain access to the installation.

RESERVE COMPONENT UTILIZATION

Question. As was mentioned in your joint statement, the 49th
Infantry Division, a National Guard unit from Texas, was deployed to
Bosnia last year. This was the clearest demonstration yet of our
nation's growing reliance on the Guard and Reserve to conduct even day-
to-day military operations, a trend that concerns me greatly.
What insights has the Army gained as a result of that deployment?
Has that assignment, or the prospect of returning to Bosnia this
October negatively impacted retention rates in the 49th? What do
members of other Guard units from around the country think of this new
practice? How do routine, six month-long overseas deployments fit in
with the American public's view of the National Guard as our nation's
``minutemen?''
Answer. As overseas commitments continue to increase, there is a
greater reliance on Reserve component (RC) forces to integrate with the
active component (AC). The 49th Armored Division's contributions, as
well as those of other RC organizations, in support of operations in
Bosnia have provided greater flexibility to the AC by allowing units to
be reassigned to other critical missions and by reducing AC personnel
tempo (PERSTEMPO) and operational tempo (OPTEMPO).
While AC PERSTEMPO and OPTEMPO have been reduced through the use of
the RC in this instance, increases in RC PERSTEMPO and OPTEMPO and
employer sentiments to extended deployments offer certain challenges.
The 49th Armored Division launched an aggressive employer support
campaign that provided early notification to employers and educated
employers of the vital role of their citizen-soldiers for peacekeeping
operations. After arrival in theater, employer relations were
maintained by allowing executive visits to Bosnia. Additionally,
soldiers were provided the means and encouraged to stay in touch with
employers. Other significant insights include improved unit readiness,
realistic training, improved staff-level command and control execution,
and individual soldier readiness and preparedness.
The plan to integrate AC and RC forces was truly manifested into
reality under the command and control of the 49th Armored Division.
Other Army National Guard units will also be given command and control
responsibility for six out of the next seven scheduled Stabilization
Force rotations for Bosnia. the Army continues to transform, new
methods of utilizing the RC in an ever-changing operational environment
will be explored to take full advantage of RC capabilities.
It is still too soon to tell the impact on retention that the
rotation had on the 49th; however, current indications are that there
was no negative impact. The Guard and Reserve have each conducted
studies that concluded that there does not appear to be a significant
difference in attrition rates within units that have mobilized and
units that have not mobilized.
Our capability to expand the active force rapidly and efficiently
through mobilization is essential in deterring potential enemies. Our
Reserve components soldiers see opportunity to serve using their skills
in ways that they can see the impacts. However, we must be careful
that, as we call on the RC to meet the Army's global requirements, we
ensure our practices allow the greatest amount of lead time in
notification to allow for adequate preparation.
On the whole, traditional soldiers approve of the Reserve
component's new mission, but do not like the current training and
mobilization process. We serve our soldiers, their families, and
employers best when we first federalize a unit and then train all unit
members on mission specifics. Deployment follows only after this is
complete. Not only is this a more effective and efficient deployment
process, it adds to the continuity of training for the soldier, and to
the continuity of the planning process for the soldier's family and
employer. The end result is a proficient soldier prepared to conduct
the mission.
The Guard and Reserve are following rotational policy guidance of
179 days in theater for Balkan operations. We have discussed shorter
rotations such as 120 days or 90 days for the Balkans. The Army
National Guard currently deploys units on shorter rotations to
Southwest Asia and has reduced rotational lengths for medical
personnel, lawyers, and aviation assets. Discussions continue on the
feasibility for shorter Balkan rotations and the potential impacts on
units, families, and employers, as well as the potential impacts on
funding such as added transportation requirements for personnel and
equipment and training site usage. As the RC takes on more of a role,
we will continue to work toward better solutions that will reduce the
tempo for all components of the Army.
______

Questions Submitted to General Eric K. Shinseki

Questions Submitted by Senator Daniel K. Inouye

LEGACY FORCE

Question. Some have argued that the Army cannot afford to maintain
readiness, modernize the Legacy Force, build the Interim Force, and
develop the Objective Force all at once without cutting force levels.
What is the possibility that the Army will be faced with having to cut
forces to meet its Transformation goals? Has the Army considered
cutting force structure and, if so, where would the cuts most likely be
made?
Answer. The transformed Army may have the ability to execute its
missions at lower force levels in the future, but we are not prepared
to make that assumption today and believe it to be an imprudent
approach to securing the vital interests of the Nation. The Army is
clearly too small today for its current mission profile. Cuts should
only be considered in conjunction with the defense strategy and review
of all forces required to support a new National Security Strategy and
National Military Strategy.
Numerous studies and Congressional testimony from the Army, other
Services, and Office of the Secretary of Defense (OSD) document the
serious strategy-to-resource mismatch under which we currently operate.
The Quadrennial Defense Review process, as it has emerged to date,
clearly appreciates that without a change to the strategy and/or
current force levels and attendant capabilities, our Armed Forces will
continue to decline in both relative and absolute terms. Inevitably,
this will degrade the Nation's security.
The Army must balance Legacy, Interim, and Objective Force
requirements. All three are necessary to transform the force and
maintain current readiness for future capabilities. In the interim, and
pending definitive proof that transformed capabilities are adequate to
supplant current Legacy and Interim Forces, the Army must maintain
readiness in existing Legacy and developing Interim Forces.
The Army needs more forces today to execute current missions, and
force cuts place the remaining forces at too high a tempo. The Army has
consistently maintained that 12-plus active divisions and their
supporting forces are required to accomplish ongoing missions, sustain
readiness, and transform the force. Current active component forces are
already two-plus divisions short and rely heavily on reserve component
forces to meet commander-in-chief needs. However, growing concern among
reserve component members, their families, and employers for frequent,
lengthy tours outside of the United States indicates that we cannot
continue this approach indefinitely to meet operational needs.
The Army plans to invest in Transformation to revolutionize the
ground component of future war. The current Program Objective
Memorandum fully funds procurement of over 2,000 Light Armored
Vehicle's to equip six Interim Brigade Combat Teams, funds
approximately $8.5 billion in science and technology for Objective
Force experimentation and Transformation, and provides funds to
recapitalize the Counter-Attack Corps. The Army has accepted
significant risk with the current force through internal force
reductions and partial funding of modernization programs.
The Army has removed 25 percent of its main battle tanks, infantry
fighting vehicles, and artillery systems in anticipation of fielding
enhanced capabilities in Comanche, Crusader, and numerous digitized
systems.

INTERIM FORCE

Question. The Congress last year added funds to enhance your
efforts to build your Interim Force. Can you give us a status report on
how those funds have been used and how this program is proceeding?
Answer. Congress' support for the Interim Force last year was
critical to the Army's ability to begin establishing an interim
capability at Fort Lewis, Washington. In the Fiscal Year 2001 Defense
Appropriations Act, Congress added $150 million for research,
development, test and evaluation (RDTE), $400 million for weapons and
tracked combat vehicles (WTCV), and $200 million for Other Procurement,
Army (OPA) to expedite fielding of the Interim Force.
A total of $258 million for fiscal year 2001 RDTE was appropriated.
The bulk of this funding was awarded to provide integration engineering
efforts required to marry ten mission equipment packages with ten
platform configurations. The remainder was issued for government
support and engineering, modification of training devices, test
planning, and seven Mobile Gun System prototypes. Carryover funding
will be applied to the contract integration engineering efforts and
fiscal year 2002 requirements, to include testing.
A total of $928 million for fiscal year 2001 WTCV was appropriated.
The bulk of this funding was obligated against delivery orders for the
procurement of vehicles for the first Interim Brigade Combat Team
(IBCT), equipment for production and fielding of these vehicles,
integrated logistics support for the vehicles, and program management
support. The remaining funds will be obligated in early fiscal year
2002 to procure vehicles for the second IBCT, along with equipment,
logistics support, and training devices.
The Army used the additional $200 million OPA to purchase a wide
range of equipment and support systems for the IBCTs. Chief among the
items purchased were a range of command, control, communications,
computers and intelligence systems, various wheeled tactical vehicles,
night vision devices, and other combat support and combat service
support equipment and systems.
The Army awarded the Interim Armored Vehicle (IAV) contract to
General Motors/General Dynamics Land Systems Defense Group Limited
Liability Company in November 2000. United Defense, Limited Partnership
(UDLP) filed a protest with the GAO in December 2000 for an examination
of the source selection process for the IAV program award. In April
2001, GAO notified UDLP and the Army of its decision to deny UDLP's
protest. The GAO's decision was released on May 2, 2001. UDLP has not
pursued further action, and delivery of the first vehicles is scheduled
for February 2002.

TRANSFORMATION CHALLENGES

Question. General Shinseki, in your testimony you note that
Transformation will affect all aspects of Army life: training,
logistics, supply systems, base infrastructure, and so on. Changes to
these areas likely will provoke some controversy and significant costs.
In which of these areas do you expect change to create the greatest
challenge?
Answer. Transformation is far more extensive than just modernizing
equipment and the physical construct of the posts, camps, and stations
we operate in. Certainly, the Army will see changes in doctrine,
training, leaders, organizations, materiel, and soldiers as we continue
to move from the Legacy Force to the Objective Force. Our biggest
challenge in this process is continuing to look at the emerging
strategic environment we will be asked to operate in and shaping the
training and leader development that will be required of our Objective
Force soldiers and leaders.

TRANSFORMATION MODELS

Question. Are there any models of corporate business transformation
that may shed light on the Army's plan?
Answer. The Army has taken and continues to pursue from industry
and the corporate world, business practices and innovative approaches
that would be appropriate for our use in improving our efficiencies and
effectiveness as we transform the Army. We have already adopted many
business practices that allow us to reduce costs and realize savings
that ultimately makes more funds available for readiness,
modernization, and well-being programs for our most critical assets--
our people and their families. These elements are all essential to our
efforts to transform the Army.
We have gone to several of our Nation's leading industry firms and
looked at how they have transformed to meet tomorrow's challenges and
adopted what was appropriate for our use. We are already challenging
the manner we have used to acquire, test, and evaluate our equipment
and have implemented new and improved business practices in our
approach to procure the Infantry Carrier Vehicle and the Mobile Gun
System.
Additionally, we are adding emphasis within the Army Transformation
Campaign Plan for addressing better business practices across all of
the proponents responsible for Transformation and, at Secretary White's
direction, are looking at what more we can do to ensure we are using
the most effective and efficient means available to assist in the
Transformation of the Army.

CRUSADER

Question. The Crusader system has been criticized as not being a
``leap-ahead'' technology. How do you respond?
Answer. Crusader not only provides a leap ahead to the force it
supports, but also provides a more efficient and effective
developmental path for the Army's future combat systems. Crusader
provides a significant leap ahead in combat power over our current
M109A6 Paladin and the latest howitzers being introduced by other
countries. Crusader employs more than two dozen cutting-edge
technologies for the first time in a ground combat vehicle. Some of the
technologies include a state-of-the-art cockpit that includes embedded
command, control, and training; fully automated ammunition handling,
including inventory management, recognition, transfer, loading, and
docking; vulnerability and susceptibility reduction that incorporates
integrated composite armor, detection avoidance, and remote operated
secondary armament; electronics architecture that employs a new real-
time common operating environment and fault management, fully
integrated combat knowledge and decision aids; and a revolutionary new
cannon assembly with an actively cooled cannon and gunmount, laser
ignition, and projectile tracking system that improves accuracy. This
is just a partial list of some of the new technologies being introduced
in Crusader.
The technologies in Crusader allow the Army to employ tactics and
doctrine for the first time that rely on cockpit automation, robotics,
and information exploitation in lieu of soldier performed tasks.
Crusader also provides unmatched synergy within the force as it
capitalizes on advanced technologies to integrate with manned and
unmanned ground and aerial platforms that employ information-dominant,
network-centric warfare. Crusader equipped battalions will provide the
commander with continuous, immediate, all weather, 360-degree precision
fires at an unprecedented 50 kilometer range, assisted and a sustained
rate-of-fire in excess of 11 rounds per minute. The new technologies
employed in Crusader make it strategically deployable with enhanced
lethality, mobility, sustainability, and readiness.
Question. Given the cost of this system, would the Army be better
served to invest in smaller, more mobile and potentially more lethal
artillery systems?
Answer. No. We need the improved lethality, strategic and tactical
mobility, sustainability, and reliability that Crusader will provide to
our force now. We do not believe that we could have a smaller, more
mobile, and more lethal system that could perform Crusader's role in
time to support the requirements of our transforming Army. The market
survey and analysis done before we embarked on Crusader supports this
position, as does the continuing monitoring and assessment of emerging
new systems and technologies. We believe that Crusader is the best
cannon artillery system to support Army Transformation.

ARMY TRAINING AND MANNING

Question. How has your initiative to fully man the Army's combat
units influenced training this year?
Answer. The Army manning initiative is a deliberate effort to
ensure that our warfighting forces have the personnel they require. The
initiative to fully man our combat units has had a positive effect in
several ways and is reflected in higher unit readiness. Division
training level indicators are at their highest levels in the past four
years. Personnel manning for these units is at the highest level in the
last five years. This is due to the priority for personnel these units
received from the manning initiative. With increased personnel, units
are more capable of conducting individual and collective training and
executing the Combined Arms Training Strategy.
Question. What are your plans to fully man the supporting
institutions of the Army?
Answer. The Army's ability to fill all units to 100 percent of
authorizations depends on balancing a number of factors, such as
synchronizing force structure with Congressional mandates, attrition,
retention, and recruiting.
During fiscal year 2000, we increased the manning of our divisions
and armored cavalry regiments to 100 percent. We will fill the rest of
the force during the next three years. In fiscal year 2001, we will
continue to fill the 10 active component divisions and the armored
cavalry regiments to 100 percent. We will also fill the early deploying
units above division level to 100 percent of authorizations. In fiscal
year 2002, we will fill the remaining table of organization and
equipment (TOE) units to 100 percent. In fiscal year 2003, we will fill
the remaining TOE units and the Department of the Army approved table
of distribution and allowance to 100 percent.

TRANSFORMATION

Question. Programs that recently suffered difficulties after
fielding were approved for full rate production based on passing
Operational Testing and Evaluation (OT&E). What is being done to
improve upon the accuracy and reliability of Army testing and to avoid
these costly failures in the future?
Answer. The purpose of Army test and evaluation (T&E) is not to
pass or fail systems, but to characterize in a realistic operational
environment that systems are effective, suitable, and survivable. The
U.S. Army Test and Evaluation Command (ATEC) strives to conduct the
highest quality developmental and operational testing and
experimentation possible to provide information to support Army
evaluation and milestone decision authority requirements within the
available time and funding. Tests and experiments are designed to
provide specific data to support evaluations as input to full rate
production and materiel release decisions.
Unfortunately, overall reductions in the Army's T&E infrastructure
over the last 10 to 12 years, reduced T&E funding, and acquisition
streamlining initiatives have impacted the robustness of ATEC T&E. The
impact of these constraints is seen in reduced environmental tests,
test duration, sample size requirements, and size of operational units
employed during tests. This increases the risk that important
information that might preclude fielding of a system with problems is
not identified during testing.
ATEC is undertaking a number of initiatives to reduce these impacts
and working to increase the rigor and realism of tests to determine if
systems and equipment meet user requirements. An ATEC system team is
formed for every program to bring together the principal T&E personnel
to discuss and coordinate T&E activities. Risk mitigation factors are
considered for each test or experiment as a means of reducing impacts.
The findings of these efforts are then presented to program managers as
T&E strategies are developed.
ATEC is increasing the use of modeling and simulation to
investigate system and equipment performance in conditions outside
typical test environments. Modeling and simulation capabilities are
incorporated where possible to increase and improve the operational
environment simulation, to provide for increased interactions within
the simulated environment, and to create simulated organizational
structures for improved realism and increased information flow.
Modeling and simulation tools are being developed to extend test data
and provide repetition of test events.
ATEC is striving to modernize the T&E infrastructure; however, with
current budget shortfalls, this will require an extended period of
time, and in the interim, will cause a decreased ability to support T&E
needs. This modernization will help better equip testers with tools to
enhance accuracy and reliability. Such tools are in their infancy now.
Further development is ongoing and will require future funding.
ATEC is launching an educational campaign with the Army's senior
leaders, program executive officers, and others regarding the benefits
of T&E and the valuable aid it provides in getting systems and
equipment fielded faster. ATEC is also enlisting the aid of the
National Academy of Science to ensure all possible means of mitigating
the risk of not finding significant system performance deficiencies are
explored.
The Army recognizes that some systems have demonstrated lower than
required reliability during operational type tests over the last
several years. In response, the military deputy (MILDEP) to the
Assistant Secretary of the Army for Acquisition, Logistics, and
Technology directed that a reliability, maintainability, and
supportability workshop be conducted to identify problems and develop
recommendations for their resolution. Initial recommendations were
presented to the MILDEP in January 2001 and centered around the premise
that reliability could be significantly improved by focusing on two
main areas: to design in reliability up-front and to validate that we
have reliable systems and components. Also, the recommendation included
the identification of enablers for this improvement. These enablers are
ensuring that government requirements are properly stated and
translated during the contracting process, resourcing for execution of
the process, and measuring the results. The MILDEP directed additional
work on the refinement of the recommendations. This work is currently
ongoing. The next update to the MILDEP is scheduled for July 31, 2001.

ARMORED SECURITY VEHICLE (ASV)

Question. Last year the Congress provided additional monies to
support the Army's equipping military police units with Armored
Security Vehicles or the ASVs in fiscal year 2001. To date, those funds
have not yet been obligated and the vehicles have not been purchased
despite the fact we are rapidly approaching the last quarter of the
fiscal year. Please comment on the status of complying with the
legislative direction provided in the fiscal year 2001 Appropriations
Bill, what is causing the delay in purchasing these vehicles for our
military police units and what your plan is to address this problem.
Answer. The ASV program received a $1.4 million Congressional plus-
up to procure an additional vehicle for fiscal year 2001. The Army has
every intention to comply with the fiscal year 2001 Appropriations
Bill. The approximate contract award date for the vehicle is scheduled
for July 27, 2001. This option will be an additional vehicle to the 20
vehicles procured under the fiscal year 2001 contract awarded in
November 2000. In addition to another vehicle, the funding expedited
the fielding of 12 ASVs to a military police company in Kosovo.
______

Questions Submitted by Senator Tom Harkin

UNUTILIZED PLANT CAPACITY

Question. Unutilized Plant Capacity (UPC) funds are critical to the
arsenals to pay for capacity that is maintained for national wartime
requirements, not for current contracts, and thus to keep overhead
rates reasonable. Last year Congress directed the Department to include
full UPC requirements in the budget. Yet we continue to hear rumors
that once again full UPC funding will not be in the budget. Will you
follow Congressional direction and include full funding for unutilized
and underutilized plant capacity in the budget for fiscal year 2002?
Answer. While we have tried to comply with the recommendations of
the Congress, budgetary constraints precluded the full funding of the
Industrial Mobilization Capacity program formerly known as UPC.
However, the fiscal year 2002 budget justification does show we have
provided partial funding.

155 MILLIMETER LIGHTWEIGHT HOWITZER

Question. The 155 millimeter Lightweight Howitzer is a program that
has been of significant local interest and that is becoming more and
more of a national problem. You agreed that there is a need for this
howitzer for the interim brigades, to form a lighter, more mobile
force. But a recent update to a General Accounting Office (GAO) report
on the program found that it continues to be significantly over budget
and behind schedule, that proposed fixes to old technical problems have
not been fully tested, and that there are newly discovered problems.
The titanium that keeps the howitzer light weight turns out to be prone
to cracking, and the new aiming system does not yet exist. I am
concerned that it may be time to terminate this program and look at
other options for this capability. General Shinseki, will you look at
this program and consider whether it is time to cut our losses so they
do not impede the Army Transformation?
Answer. The Lightweight 155 millimeter Howitzer (LW155) is a joint
program with the United States Marine Corps developing the howitzer and
the Army developing the digital fire control. The Army continues to
assess the LW155 and our other developmental systems for their
continued relevance to Army Transformation.
There is a critical and urgent need for a lightweight, highly
mobile and deployable fire support system to support our brigade combat
teams and the Marine Corps' expeditionary forces. The engineering
analysis and preliminary testing suggests that the LW155 will meet or
exceed its design requirements. We believe it is essential that the
weapon complete its current test phase so that sufficient data can be
obtained to support a production decision late next year.
The July 2000 GAO report raised concerns over three specific
technical issues--spade size, saddle, and titanium welds. As reported
in the April 2001 GAO follow-up report, the spades are now properly
sized and being installed onto the prototypes. The GAO report also
noted that the new saddle was successfully field tested. The one small
crack observed in the titanium weld during initial firings of the first
engineering and manufacturing development prototype weapon 10 months
ago was repaired and has since been subjected to over 800 rounds
without a recurrence.
The four technical issues identified in the April 10, 2001, GAO
report was minor, and remedies have already been incorporated into the
LW155 design. First, the spade crack discovered was addressed by a
spade design iteration. The latest spades have been reinforced to
withstand worst-case conditions. Second, a new spade latch has been
incorporated that provides greater robustness and protection to the
hinge area from sand, grit, and moisture. Next, a new two-position
damper to replace the single-setting damper was incorporated into the
design to optimize weapon stability in all soil conditions. And
finally, the optical sight, which experienced retention problems, has
been redesigned to withstand greater shock loading.
The current howitzer was selected after an extensive live-fire
shoot-off in which it was determined to be the winner over two other
prototypes. Identifying and resolving technical issues such as those
described above are commonplace and the very reason for this stage of
development. The LW155 program is on track for the September 2002 full-
rate production decision.
The Marine Corps delayed the program's full-rate production
decision to September 2002 based on problems with the manufacture of
the initial engineering and manufacturing development weapons which
have since been resolved. The $20.2 million cost growth is driven not
only by the delay in the program, but also by adding a pilot production
run to enable the U.S. manufacturers to gain experience with building
weapons before the start of production. There has been no increase to
anticipated production costs of the LW155, as the first two years of
production are covered by fixed-price contract options.
The acquisition plan for the LW155 has always planned for the
development of the Army's portion of the program, the digital fire
control system, to lag behind the Marine Corps' development of the
basic howitzer. This delay minimizes the risks associated with
integration of the fire control onto the howitzer. Initially, only the
Army's LW155 howitzers were going to be equipped with the digital fire
control. After reviewing the Army's experimentation with digital fire
control on towed howitzers, the Marine Corps decided to include digital
fire control on their howitzers.
______

Questions Submitted by Senator Kay Bailey Hutchison

TRANSFORMATION STATUS

Question. General Shinseki, what is the status of your efforts to
``Transform'' the Army? Your vision would seem to dovetail nicely with
Secretary Rumsfeld's desire to transform the Department of Defense. How
have your ideas been received by the Pentagon's new senior leadership?
Answer. We have moved out and made significant progress this past
year in a number of areas. Our efforts are in line with Secretary
Rumsfeld's desires and we have synchronized The Army Vision and the
supporting Transformation Campaign Plan with the National Security
Strategy, the National Military Strategy and Joint Vision 2020. Two key
documents, Field Manual 1, ``The Army,'' and Field Manual 3,
``Operations,'' have been written and recently published. We are now in
the process of completing several of the organization and operational
designs for the new organizations and have stood up a task force to
facilitate the accelerated fielding of the Objective Force this decade
by integrating and synchronizing its warfighting capabilities and
technologies.
Two Interim Brigades have been formed at Fort Lewis, Washington,
with surrogate and loaned equipment while we undergo procurement of the
Interim Armored Vehicle. Simultaneously, to ensure the readiness of the
force, the Army has manned the 10 divisions and two armored cavalry
regiments to 100 percent and reduced the headquarters manning
accordingly. Panels on well-being, turbulence, readiness, leader
development, and training have been established to assist in our
transition. The information gained from these panels has been
integrated into our overarching Army Transformation Campaign Plan. We
have also introduced a number of key recruiting and retention
initiatives based on information obtained from these panels.
The Army has aligned spending in science and technology (S&T) to
develop the operational capabilities of the Objective Force to allow
the Army to have its first operational capability in 2010 following
certification of the first Objective Force unit of action. The S&T
funding currently is 97 percent of the requirement.
Our efforts to transform the Army have been briefed to many of the
Pentagon's new senior leadership, and we continue to receive superb
support as we move down the path of Army Transformation.

DIGITIZATION

Question. What is the status of the ``digitization'' of the III
Corps at Fort Hood?
Answer. The Army remains committed to equipping III Corps with
essential digital capabilities as the Army transforms its forces. The
Army is focused on the Objective Force as the first priority and the
Interim Force as the near-term solution to today's needs. However, the
Army remains fully committed to recapitalizing and modernizing the
Legacy Force beginning with III Corps. To date, the Army has
successfully fielded essential digital systems to the 4th Infantry
Division at Fort Hood and successfully conducted the first phase of the
division capstone exercise at the National Training Center in April
2001. The Army is continuing to develop, test, acquire, and field key
digital systems to the 1st Cavalry Division in 2002 and 2003 and the
remainder of the 4th Infantry Division, followed by the 3rd Armored
Cavalry Regiment and Corps elements in subsequent years. The Army's
efforts to equip III Corps with digital capability will not only
enhance the combat power of III Corps, but will also enable
Transformation to take shape with the focus on the Objective Force.

ENVIRONMENTAL CONCERNS

Question. General Shinseki, members of this Subcommittee have
become increasingly aware of the growing impact environmental concerns
have on the Army's ability to thoroughly and realistically train its
forces. Some of my colleagues in the House are so concerned about the
matter, they are considering a legislative remedy. Would you please
describe the impact environmental constraints are placing on the Army's
ability to train?
Answer. In the Army, we use the term encroachment to refer to all
external influences threatening or constraining testing and training
activities required for force readiness and weapons acquisition. Such
encroachment stems from environmental, social, and economic influences.
Impacts include, but are not limited to, restrictions on available
testing and training locations; restrictions on available times and
duration for testing and training; reduced effectiveness of testing and
training activities; and restrictions on weapons systems, equipment,
and munitions used during testing and training.
Unit commanders have not reported lowered training ratings solely
due to encroachment issues. However, several units reporting reduced
readiness ratings have provided comments on their unit status reports
identifying training constraints. Instead of allowing these constraints
to reduce unit training status, commanders have developed ``work-
arounds'' to continue training to maintain their readiness posture and
to accomplish the mission. Although these work-arounds must support
training requirements based on doctrinal standards, they make the
training experience sub-optimal. When training combines a number of
work-arounds, the adverse impacts on training are magnified and
cumulative.
The Army's primary encroachment concerns are urban sprawl,
threatened and endangered species, and restrictions that impact our use
of munitions. Urban sprawl and unchecked residential and community
growth may present conflicts with our neighbors over noise, dust, and
other effects of Army training. In some areas, it triggers a
competition for natural resources. When our installations were
established, they generally were in rural areas, remote and isolated
from populations where public awareness of live training activities was
minimal. That has changed. The sum effect has been that Army
installations, once far from public view, are now often in the midst of
large urban areas. Population and urban growth around installations
have caused ranges and training lands to become ``islands of
biodiversity,'' increasing their natural resource value. Our training
practices bring noise, dust, the expenditure of munitions, and ground
activities that can be viewed as a nuisance and annoyance to those who
have become our neighbors.
Managing endangered species in accordance with existing regulations
has been, and continues to be, a great challenge. As a land-based
force, we need land to train. Our important training installations are
large and are needed to accommodate air and ground maneuver using our
increasingly mobile weapons systems. Endangered species regulations
have required us to review our training activities to ensure that they
do not jeopardize the continued existence of an endangered or
threatened species. In some cases, we must modify our training
activities to meet that requirement. One salient example is a $24
million range complex on the island of Hawaii that has never been used
for the training for which it was designed and built due to extremely
restrictive mitigation measures designed to preserve endangered plants.
As the number of listed plants and animals increases, the amount of
land available to us for unmodified training activities may decrease
further.
Our concerns about munitions focus on the future. At one of our
ranges, the Army National Guard's Massachusetts Military Reservation
(MMR), we have encountered regulatory actions that impacted our
operations. For the first time, the EPA has administratively stopped
our live-fire weapons training by exercising authority under the Safe
Drinking Water Act. The use of environmental regulations to curtail
training activities must have a scientific basis. Given the fact that
our units employ a large number and type of weapons and that we train
with those weapons on literally thousands of ranges, the potential for
cessation of live fire training is of great concern to us. All Army
installations with training areas and ranges are vulnerable to
imposition of environmentally based restrictions on live fire training.
The potential impact of further administrative cease-fire orders cannot
be measured, other than to say that major training and training
readiness investments would be affected. The regulation of munitions is
a complex issue that requires deliberate measures in the areas of
environmental research and development, risk assessment, range design,
and range management. Unilateral orders to stop firing while we
investigate these challenging issues will impact readiness. A more
balanced approach is warranted. Such an approach should ensure that
policy makers weigh national security concerns, as well as
environmental stewardship interests.
As currently written, several statutes contain broad discretionary
enforcement thresholds that are based on the assessment of the
regulatory authority as to whether a given condition presents a
potential risk or imminent hazard to human health or a particular
natural resource. While the Army is not seeking to avoid our
responsibilities to the American people or seeking relief from
compliance with environmental statutes, the lack of consistent and
measurable assessment and enforcement standards limits the Army's
ability to plan, program, and budget for the necessary compliance
requirements. In light of the Secretary's current strategic review, it
would be premature to discuss specific proposals, but I look forward to
working with other federal agencies and Congress.

ACTIVE DUTY DIVISIONS

Question. A number of articles have appeared recently which assert
that the number of active duty divisions may be cut from ten to eight.
Are either of you aware if Secretary Rumsfeld is even considering such
dramatic restructuring of the Army as part of his ``strategic review?''
What are your thoughts about such a proposal? How would such cuts
affect the Army?
Answer. Force levels to support 2001 Quadrennial Defense Review, to
include restructuring, are now being considered. The Secretary of
Defense has not yet made any decisions with respect to the strategic
review, so it would be premature to comment on the specifics of any
pending changes in Army organization or force structure. The Army
leadership is committed to providing the Secretary of Defense and his
staff with our very best professional judgment, advice, and analysis
regarding force structure requirements to implement the new defense
strategy.
We have been heavily engaged in making our requirements known,
based on a strategy of what this Nation's interests are and what we see
as requirements for the Army to meet the National Security Strategy.
While the future security environment is uncertain, the Army believes
that winning the Nation's wars is an enduring requirement and that
challenges to our security and well being will continue. Both will
demand landpower, with the capability to assure allies, deter conflict,
dissuade adversaries, and conduct sustained and decisive operations
across the full range of military operations. This includes the
capability to win decisively--defeating both the adversary's ability
and will to fight or wage war--with victory being incontrovertible and
significant military threats eliminated.
The Army's future capabilities must include the ability to deter or
preclude conflict, and if that fails, decisively win war; conduct a
broad array of smaller-scale contingencies concurrently; sustain
acceptable personnel and operational tempo; and meet current and
anticipated homeland security challenges. Simultaneously, the Army must
have sufficient forces and resources to experiment and transform to
meet tomorrow's joint force requirements. Our Nation's security
requires these capabilities.
Army experience and analyses continue to show today's force
structure is too small to meet those requirements. An adequately sized
force ensures a rotation base of trained and ready forces to conduct a
full spectrum of operations within acceptable tempo. The force must
also possess a full array of capabilities necessary for decisive
victory in war. This includes a structure with sufficient operational
depth to ensure appropriate span of control, economies of scale and
sustained campaign capability. Today's Army works hard to meet these
vital requirements as it implements an imperative, comprehensive
experimentation and transformation plan. Given the uncertain and
growing range of challenges we know we will face in this century, Army
force structure of at least today's size appears warranted and prudent.
As we conduct the Defense review, the Army believes it is essential
that we not attempt to predict the future and then optimize a force
consistent with our predictions. The consequences of guessing wrong are
too severe--we cannot break our non-negotiable contract with the
American people to fight and win the Nation's wars. Instead, we should
recognize the uncertainties and potential for dramatic change
associated with our future security requirements and preserve the key
military capabilities that provide our Nation's leaders with a robust
set of options in times of crisis. We believe strongly that the
American soldier will continue to be a centerpiece of our Nation's
Armed Forces in the decades to come.

INFORMATION SHARING

Question. General Shinseki, this month's Janes IDR reports that the
Army and the Marine Corps are close to signing an information sharing
agreement covering each Services' efforts to develop and field new
families of armored vehicles. While I applaud the move, I am concerned
that the agreement may not be broad enough to cover more than a few
common items such as fuel cells. What stands in the way of applying the
Joint Strike Fighter model to armored vehicles? Why can't the Army and
the Marine Corps jointly develop new armored vehicles that are at least
85 percent common? After all, both services share the goals of
replacing the M1A1 tank and variants of the Light Armored Vehicle.
Answer. Nothing stands in the way of the Army and Marine Corps
maximizing our cooperation in the development of new armored vehicles.
The degree to which our vehicles could be made common would be
dependent upon our individual Service stated requirements.

AGING INFRASTRUCTURE

Question. I am very concerned about the aging infrastructure of our
military posts. What is the shortfall of your Sustainment, Restoration,
and Modernization account for the Army? Does the proposed supplemental
budget from DOD address those shortfalls adequately?
Answer. Due to the extended period of facilities sustainment
underfunding, Army facilities have deteriorated to a C3 installation
status report level. The current unfunded backlog to bring facilities
to C1 is $17.8 billion. The Army's request of $126 million for
additional sustainment funding in fiscal year 2001 would be a welcome
step towards achieving the needed level of annual sustainment funding
and would assist installations in returning from an ``emergencies
only'' mode to a prudent level of support. The Senate's higher amount
provides an increased recognition of the importance of halting
deterioration and brings fiscal year 2001 capabilities closer to a full
sustainment level.

FAMILY OF MEDIUM TACTICAL VEHICLES (FMTV) FUNDING

Question. I have read press reports indicating that the Army's
fiscal year 2001 supplemental request to OSD included $33 million in
funding for the Family of Medium Tactical Vehicles (FMTV). Yet the
supplemental request I read does not include funding for FMTV. Please
describe how including FMTV funding in the fiscal year 2001
supplemental will help enhance the readiness of the Army.
Answer. The funds identified for FMTV in press reports would have
procured vehicles to replace those shifted to the formation of the
first Interim Brigade Combat Teams at Fort Lewis, Washington, the
Army's highest priority. Original planned allocation of vehicles to the
Army Reserve and National Guard would have been restored, thus keeping
those modernization efforts on schedule.

SUBCOMMITTEE RECESS

Senator Inouye. The subcommittee will stand in recess until
June 20. At that time we will hear from the Secretary of the
Navy and the Chief of Naval Operations. Thank you.
[Whereupon, at 11:20 a.m., Wednesday, June 13, the
subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
June 20.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, JUNE 20, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:03 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Daniel K. Inouye (chairman)
presiding.
Present: Senators Inouye, Stevens, Cochran, and Bond.

DEPARTMENT OF DEFENSE

Department of the Navy

STATEMENT OF HON. GORDON R. ENGLAND, SECRETARY OF THE
NAVY

OPENING STATEMENT OF Senator DANIEL K. INOUYE

Senator Stevens. The committee is pleased to welcome the
Secretary of the Navy, the Honorable Gordon England; the Chief
of Naval Operations, Admiral Vernon Clark; and the Commandant
of the Marine Corps, General James Jones. Gentlemen, I thank
you for being with us this morning. I want to especially
welcome the new Secretary because I believe this is your first
appearance before any Congressional committee.
Mr. England. Yes, sir, it is.
Senator Inouye. We look forward to working with you, sir.
Mr. England. Thank you.
Senator Inouye. Let me note for the record that I think you
made a bit of history here. All three of the service
secretaries made their first appearances before this committee,
so I thank you very much, sir.
Mr. England. Thank you, sir.
Senator Inouye. Today's hearing is the final in a series of
committee reviews of the military service programs. As all of
us are aware, we have not received the Pentagon's final budget
request for fiscal year 2002. Unfortunately, this will limit
our ability to fully engage on the Navy and Marine Corps needs
for the coming year. Nonetheless, Senator Stevens and I felt we
should begin to lay the foundation for our upcoming fiscal year
2002 review. But we are hoping for a full discussion of your
programs as we prepare for what could be a long summer.
Some could argue that the Navy and Marine Corps are at a
crossroads. Many of your most viable, visible, and critical/
modernization programs have come under fire, such the Osprey,
the DD-21 destroyer, and the aircraft carrier replacement
program, and the Joint Strike Fighter. In addition, the Navy
has struggled in recent years to maintain ready forces and both
services are saddled with aging infrastructure and an
underfunded shipbuilding program that pulls resources away from
modernization and readiness programs.
This committee is fully aware of the challenges facing our
naval forces and it is clear that there are some tough choices
to be made about which path the Navy and Marine Corps will
follow. But may I assure you, sir, that this committee will
work diligently to provide you with the adequate resources you
will need to modernize and support the greatest naval forces in
the world today.
My colleagues and I hope that the Department's fiscal year
2002 budget request and the Secretary's strategic review will
meet these challenges head-on. We cannot afford to pass up this
opportunity. That is why I strongly urge you, as I have urged
your counterparts in other services, not to let it slip away.
Finally, the administration recently submitted the fiscal
year 2001 supplemental appropriation request. We may have some
questions about that, but let me assure you that the committee
is fully aware of the urgent need of these funds.
Before calling upon you to testify, may I turn to the co-
chairman of the committee, Senator Stevens, for opening
remarks.

STATEMENT OF Senator TED STEVENS

Senator Stevens. Well, thank you very much, Mr. Chairman. I
do join in welcoming Secretary England to this committee and
also General Jones and Admiral Clark.
I remain really seriously concerned about the state of our
sea forces. My State joins yours, Mr. Chairman, as a forward
projection site for our armed services, and the Pacific region
I think is still the most critical area in the world to our
future. Despite the challenges we face out there, the maritime
force projection capability continues to shrink in my judgment
and appears to be burdened by programmatic challenges on
several different fronts.
When I was in your chair, Mr. Chairman, I tried, as you
know, for 2 years to find a means to increase ship production
and to maintain an adequate presence. We do not have either
Navy or Marine Corps in my State, despite the fact we have half
the coast line in the United States. It is not a provincial
thing that I have been involved in, but yet now once again it
appears that the administration will continue the policies of
the past administration and oppose incremental or advance
appropriations for vessels.
Mr. Secretary, I hope to be able to ask you this morning
how many ships you think you can build in the next years under
that approach. These shipbuilding programs are blighted by cost
overruns. In the supplementals before us right now we have $222
million for cost overruns for just this fiscal year. In the
projections for fiscal year 2002 already before us, we have
another $800 million in cost overruns.
It does not take a rocket scientist to figure out that that
is the equivalent of a new Aegis destroyer in cost overruns in
1 year. I have got to tell you, gentlemen, I think something
must be done to meet the concept of how we build our ships or
we are going to continue to have a shrinking naval force and
marine force, and I think it is these forces that you have that
allow us to still be rated as a superpower of the world.
General Jones, we have talked many times about the V-22 and
the supplemental before us provides for some changes following
the blue ribbon panel that you have been working with. I think
it is critical for us to try to understand what is intended to
be done with the V-22, to see that we can restore the faith of
the Nation and the families and the marines that fly that
aircraft. Our confidence has been shaken by the two most recent
V-22 crashes and I am frankly very disturbed about that also,
because I think V-22 represents the one great breakthrough in
new technology that has enormous potential for changing
military tactics for the future. Yet it does not seem to me we
are moving forward to try and remove that blight on this new
technology.
Finally, Mr. Secretary, I do have some questions concerning
Vieques and I hope we will get a chance to ask those questions.
The Commander in Chief has announced a new position on Vieques.
I know that we will welcome your comments here this morning to
see how we might implement that decision without deterring from
the really--reducing the level of training that our forces need
before they are deployed overseas.
I wish we had a full day for this hearing, Mr. Chairman,
because I think there are a lot of questions I have in my mind
about where we are going with regard to the forces that these
gentlemen command.
Thank you very much.
Senator Inouye. Thank you.
Senator Cochran.

STATEMENT OF Senator THAD COCHRAN

Senator Cochran. Mr. Chairman, thank you very much. It is a
pleasure to join you and Senator Stevens at this hearing with
the leadership of the United States Navy and the Marine Corps.
In our State we are very active in our participation in Navy
and Marine Corps activities. We have shipbuilding facilities,
of course, at Pascagoula, Mississippi, that supply some of the
most important combatants and amphibious ships for the Navy and
the Marine Corps. We are very proud of that fact and we watch
very closely the budget submissions that come from the
administration on those subjects. We hope that the witnesses
will tell us about what their plans are for the future
shipbuilding needs of the Navy and Marine Corps.
Also, we are proud to be the home State for a pilot
training facility. Jet fighter pilots train at Meridian Naval
Air Station. We are very proud of that. Two hundred students
each year train there. We have a home port in Pascagoula,
Mississippi, too, for the Aegis cruiser-destroyer fleets and
other ships. The Cole was brought to Pascagoula for repairs
after the sad incident in the Near East.
The fact is that we also are proud to host the Atlantic
Fleet headquarters of the Seabees. We have an active Seabees
construction battalion, located there that are actively
participating in our safety responsibilities all over the
world.
Naval oceanographic activity and research is done also in
Hancock County, Mississippi. We are also the site of some
reserve forces that drill and maintain their proficiency in our
State. We are proud of all of this connection that we have and
a lot of our citizens are on active duty or on active duty in
the Navy and Marine Corps as well.
So we are proud to be a part of this hearing. We look
forward to having a good discussion about our needs for this
year and what the plans are for this committee's support for
your activities.
Thank you very much.
Senator Inouye. Thank you.
Senator Bond.

STATEMENT OF Senator CHRISTOPHER S. BOND

Senator Bond. Thank you very much, Mr. Chairman. I do have
a number of questions, so I will just wait until the question
period. Thank you.
Senator Inouye. Thank you, sir.

ADDITIONAL SUBMITTED STATEMENT

Before I call on the Secretary, Senator Craig has submitted
a statement which will be placed in the record.
[The statement follows:]

PREPARED STATEMENT OF SENATOR LARRY E. CRAIG

Mr. Chairman, thank you for allowing me to submit an
opening statement and questions for the record. Secretary
England, General Jones, and Admiral Clark, I welcome you to the
Senate and I appreciate this opportunity to ask you some
questions and express my concerns about Navy programs and
budget issues.
We have all been eagerly waiting for the results of
Secretary Rumsfeld's Strategic Defense Review in order to
determine the priorities of the Administration in defense
spending and also to gauge the President's strategic goal for
the years ahead.
Secretary England, in light of increasing regional
conflicts across the globe, I think you would agree that a
strategic trend that will continue to be in demand is our
ability to project our forces over long distances in an easy,
rapid and effective manner. The versatility of the
expeditionary force is as important in the case of the Navy and
Marine Corps, as it is with the Air Force. I recognize the
value in my home state, of having an Air Expeditionary Wing
whose success hinges upon its ability to quickly adapt and
reach over long distances.
That is why it is so important not to cut short vital
programs like the DD-21 Destroyer, which as you know,
represents the next generation in naval warfare technology. The
DD-21 will have the kind of versatility we need in a changing
security environment, an environment that includes increased
international sales of submarines and the proliferation of new
submarine technology. The DD-21 will also play an important
role in fire support of our Marines, and has possible missile
defense applications, all at a savings of approximately one-
third in man-hour costs.
Some of the most important naval testing in acoustics takes
place in Idaho at the Bayview facility on Lake Pend Oreille. We
would like to see that those facilities are put to good use for
the DD-21. Therefore I would urge you and the Secretary of
Defense to move forward with the acquisition and testing of
this program, which I believe would be a vital asset to our
expeditionary forces.
Thank you Sec. England, General Jones and Admiral Clark. I
look forward to having discussions with you on this matter in
the future. Thank you Mr. Chairman.

Senator Inouye. Now may I call upon our new Secretary.
Mr. England. Mr. Chairman, thank you very, very much. It is
a pleasure to be here and good morning to you and Senator
Stevens, and members of the committee.
Regarding your comments, I have also noticed since I have
been the Secretary of the Navy that there are a number of
challenges before the Department, and I appreciate your words
of encouragement and support and we do look forward to working
with you, sir, as we address those issues.
I am delighted first to be here as Secretary of the Navy
for the very first time, as you commented, sir. I am even more
delighted to be here with Admiral Clark and General Jones, and
hopefully you will see us together often because we have formed
a very close leadership team to guide our naval services into
the future.
I do want to thank the chairman and all the members of the
committee for all you have done and for your continuing support
in keeping our Navy and Marine Corps team the very best in the
world. I do have a written statement to be entered into the
record, but with your permission I would like to make just a
few comments.
Senator Inouye. The statement will be made part of the
record.

STATEMENT OF GORDON R. ENGLAND

Mr. England. Thank you, sir.
First, as really a foundation of my tenure in office, I
want you to know that I have pledged to be forthright, honest,
and direct in my dealings with everyone and in every
circumstance. Of course, that is exactly how I will always be
with this very, very important committee, so you will find me
very forthright, open, and direct in all dealings.
That said, you are aware of Secretary Rumsfeld's various
ongoing defense reviews and the Quadrennial Defense Review
(QDR). Although I cannot speculate on the ensuing budget, as
Secretary of the Navy I will concentrate in four areas, namely
combat capability, business practices, technology, and people.
I feel that they are all interrelated in terms of how we
proceed.
Regarding combat capability, the naval services do have a
need to both modernize our equipment and enhance our
capability, not just for the conventional missions but across
more stressful missions, such as time-critical strike, theater
air, missile defense, intelligence, surveillance, and
reconnaissance. Additionally, considering the average age of
our platforms, which you have alluded to, recapitalization of
our capabilities does become imperative. That is very, very
high on my agenda.
As you are perhaps aware, we now spend more money on tail
than we do on tooth, and we need to reverse this trend.
Accordingly, you will see considerable effort within the
Department of the Navy to improve the efficiency and
effectiveness of our business practices. Senator Stevens, I do
hope that it will be reflected in how well we control the cost
of our programs as we go forward.
Regarding technology, Under Secretary Dr. Pete Aldridge
testified that the science and technology (S&T) budget
objectives should be in the range of 2.5 to 3 percent of the
total of the Department of Defense (DOD) budget. I also support
that goal for the Department of the Navy. It is important that
we invest in the future, so that will be one of our criteria as
we go forward.
Finally, I would close with my very highest priority,
namely our men and women in uniform, their families, and our
civilian workforce. During confirmation hearings I commented
that any capital asset purchased by the Department of the Navy,
such as an aircraft carrier, has no asset value to the Nation,
until it is manned by highly motivated and trained people, and
then it becomes a very, very valuable asset.
Therefore, people are indeed our most important resource,
and as we plan for the future we need to first be sure that our
personnel policies will provide us the people and the skills we
require for our future systems. So people are indeed our
highest priority.

PREPARED STATEMENT

I look forward to working with each of you to meet the
challenges ahead. I thank you for this opportunity to appear
before you and for your continued dedicated support to the
Naval services. Thank you very much. I do look forward to
answering your questions along with Admiral Clark and the
Commandant. Thank you, sir.
[The statement follows:]

PREPARED STATEMENT OF GORDON R. ENGLAND

Mr. Chairman, members of the Committee, good morning. Thank you for
the opportunity to speak with you today. The CNO, Commandant and I are
grateful for your continuing support to keep the Navy and Marine Corps
the very best in the world.
President Bush, in his remarks at the Naval Academy graduation,
said ``we must build forces that draw upon the revolutionary advances
in the technology of war that will allow us to keep the peace by
redefining war on our terms--a force that is defined less by size and
more by knowledge and swiftness . . . and that relies heavily on
stealth, precision weaponry and information technologies.'' I am in
full agreement with this challenge and, while naval forces inherently
fit the President's vision, modifications and alignments will be needed
to meet these goals.
For some time the sea services have undertaken an evolutionary
shift from operations on the open seas to operations that include the
littoral: an evolution that has underscored the requirement for
improved data networking; battle management systems and sensors; and
innovative ideas for employing Marines that are attuned to the
difficult littoral environment--afloat and ashore. This shift in focus
generates a need to look at our equipment across a broader mission
range . . . such as time-critical strike, ballistic and cruise missile
defense, anti-submarine warfare, and intelligence, surveillance, and
reconnaissance (ISR), air and ground mobility platforms, and
Expeditionary Maneuver Warfare.
We also recognize that we need to recapitalize our force . . . by
that I mean building new platforms . . . for the future. For instance,
even as the average age of our ships has been steadily increasing to
its present average of 16 years--and trending upward for the next five
or so years--our building rates have not been keeping apace. Likewise,
the average age of Navy and Marine Corps aircraft is about 18 years . .
. close to the age of those Sailors and Marines who maintain them. Here
also building aircraft in sufficient numbers . . . ideally at
economical orders of production . . . is called for.
We have precious few new programs to re-capitalize our forces other
than systems like DDG 51, F/A-18E/F, and the new carrier under
construction, USS RONALD REAGAN. In fact, projected replacement
aircraft, such as the F/A-18 E/F and the Joint Strike Fighter do not
meet the entire need, as there are no replacements scheduled for the
EA-6B, P-3, or E-2 aircraft and some of our helicopter fleet. New
funding will certainly be needed, but I also intend to identify some
funding sources through process improvement.
To make the most of our Navy-Marine Corps team I intend to focus on
four strategic areas: combat capability, people, technology, and
business practices.
As this Committee is well aware, the primary purpose of the Navy
and Marine Corps is to deter, train for, and when necessary, fight and
win our Nation's battles. In remaining faithful to this charge, combat
capability, which includes readiness, must be our primary emphasis. In
all our decision-making, we will ask the question, ``Does this task,
program, organization or facility materially contribute to improving
our combat capability?'' Likewise we will recognize that what has
worked in the past may not always succeed in the future. Therefore, the
Department will invest more in technical and doctrinal experimentation,
and in new and different ways of accomplishing our mission. Let me
emphasize, our mission is, and will remain, joint. We are committed to
the concept ``One Team, One Fight.'' Along with our sister services and
allies, we will organize, equip and train to fight jointly, recognizing
that forward deployed naval forces are integral to the combined efforts
of all the armed services.
I would like to briefly address my very highest priority; namely,
our men and women in uniform, their families and our civilian
workforce. During my confirmation hearings, I commented that any
capital asset purchased by the Department of the Navy has no asset
value to the nation until it is manned by highly motivated and trained
people. Therefore, as we plan for the future, we need to first be sure
that our personnel policies will provide us the people and skills we
require for our future systems.
In this regard, emphasis needs to be placed on ``Quality of
Service''--achieving a higher quality workplace as well as a higher
quality of life for our Sailors, Marines, active duty and reserve, and
civilians and all of their families. The goal will be to create an
environment where our men and women can excel at their chosen
profession, unimpeded by factors that divert their attention from work
and sap their morale. This includes competitive compensation and
quality housing, workplace resources, health care, training, and an
operational tempo that considers the individual, as well as the family
and community. Fostering a positive working environment where young men
and women believe they contribute meaningfully to their units will
encourage them to want to stay and grow with our team. When people want
to stay with a group, others will want to join that group. Retention is
a great recruiting tool!
Creating this environment requires attuned leadership throughout
our command structure. I am talking about leadership that encourages
information to flow freely up and down the organization, and that
values the knowledge and expertise of the total force. Everyone in the
Department of the Navy needs to recognize that while some positions
carry greater responsibility, all of our people are equal and
important. No one capable and willing to contribute will be discounted.
The application of advanced technology is central to our Nation's
military strength. I am concerned, however, that the application of
technology in the military has for a generation lagged its commercial
availability. This is a high priority in our combat systems, but also
includes technology for training, testing and management systems.
Technological advances are central to the priorities set forth by the
President and Secretary of Defense as we shift from the 20th century
force, to the more lethal and agile one of the 21st. Technology will
emphasize networks of information and communications as well as
improvements in sensors and weapons. Care must be taken to plan for
future advances and logical insertion points early in the design
process. This preplanned improvement schedule combined with spiral
design should allow for the delivery of increased combat capability
over a shorter period of time. Also important, U.S. systems need to
have designed into them conduits that allow our allies to participate
to the best of their significant capabilities at increasing levels of
complexity. It goes without saying that embarking on this technological
transformation will necessitate we recruit, train, and retain bright
and intelligent people to operate and maintain these systems.
Our management team should be more process-oriented, working on
ways to improve ``how we do business'' rather than concentrating only
on specific programs and products. To do that, we need to know where we
are and to have clear visibility of where we are going. Measures and
metrics provide the tools to do so and as such, will be a key element
of our process-oriented management strategy. Our cold war acquisition
infrastructure and regulations have been described as a ``voracious
dinosaur consuming dollars which should be applied to the real
mission.'' It is time to change. Borrowing applicable business
practices from commercial industry is a logical step. While the Navy
and Marine Corps will always need good leaders in their primary combat
arms arena, the Department of Navy will also develop leaders with a
better understanding of business strategies, cost control and rapid and
flexible design.
The world has changed a great deal over the past decade. But one
thing, has not changed: the Navy and Marine Corps needs to deter, train
for, and when necessary fight and win our Nation's battles. As we steam
into this new century, I am reminded that forward presence provides an
essential benefit for our nation. The Navy and Marine Corps, and in
fact the entire U.S. military, contribute to a stable global
environment allowing our economy and our citizens to prosper along with
other nations and peoples throughout the world. The stabilizing
benefits of American military strength are key to our national
interests and the well being of the international community. The
investment by our nation in its military to underwrite this prosperity
is, indeed quite modest.
I look forward to working with the Congress, the Secretary of
Defense, and our sister Services to meet the challenges in the next
year and beyond. The changes and transformations I have discussed
constitute a new start at the beginning of the new century. Thank you
for your time this morning and your continued support for our Sailors,
Marines . . . active and reserve . . . our civilians and their
families. The statements made in this testimony are contingent upon the
results of Secretary Rumsfeld's strategic review. I ask that you
consider them in that light.
______

Biographical Sketch of Gordon R. England
Mr. England was nominated on 24 April 2001 by President George W.
Bush to serve as 72nd Secretary of Navy, and was sworn in on 24 May
2001.
Mr. England served as executive vice president of General Dynamics
Corporation from 1997 until 2001 and was responsible for two major
sectors of the corporation: Information Systems and International.
Previously he had served as executive vice president of the Combat
Systems Group, president of General Dynamics Fort Worth aircraft
company and before that he served as president of General Dynamics Land
Systems company producing land combat vehicles.
Mr. England began his career with Honeywell Corporation working as
an engineer on the Gemini space program before joining General Dynamics
(GD) in 1966 as an avionics design engineer in the Fort Worth aircraft
division. He also worked as a program manager with Litton Industries on
the Navy's E-2C Hawkeye aircraft.
Following various engineering and management positions with GD Fort
Worth, Mr. England became president of GD Land Systems company. Shortly
afterwards he returned to Fort Worth as president of that division and
as executive vice president of the corporation in 1991. He served in
these roles until 1993 when Lockheed Martin purchased the Fort Worth
division after which he continued to serve as president of Lockheed's
aircraft company from 1993 to 1995.
Mr. England established a mergers and acquisitions consulting firm
following his retirement from Lockheed Martin in 1995 and operated that
business until his selection as executive vice president of General
Dynamics in 1997.
A native of Baltimore he graduated from the University of Maryland
in 1961 with a bachelor's degree in electrical engineering. In 1975 he
earned a master's degree in business administration from the M.J.
Neeley School of Business at Texas Christian University. He is a member
of the following honorary societies: Beta Gamma Sigma (business),
Omicron Delta Kappa (leadership) and Eta Kappa Nu (Engineering).
Mr. England has served as a member of the Defense Science Board and
as Vice Chairman of the National Research Council Committee on the
Future of the U.S. Aerospace Industry. He has also been actively
involved in a variety of civic and charitable organizations including
Goodwill International where he served as vice chairman of the board of
directors, the USO's board of governors, and as a member of the board
of visitors at TCU and other universities.
He has received numerous professional and service awards from many
organizations including the Boy Scouts of America, National Defense
Industrial Association and the National Management Association. He was
selected as an IEEE Centennial awardee and is a member of the Aviation
Heritage Hall of Fame.

Senator Inouye. Thank you very much, Mr. Secretary.
Admiral Clark, would you care to?

STATEMENT OF VERNON E. CLARK, CHIEF OF NAVAL
OPERATIONS, U.S. NAVY

Admiral Clark. Yes, sir. Good morning, Mr. Chairman and
Senator Stevens and other members of the committee. I thank you
for the opportunity to be here today and appear before you.
Certainly I want to express my appreciation for the continued
support of this committee in support of the young men and women
who make our Navy what it is today.
Mr. Chairman, with your permission, I have submitted a
written statement and I have a few brief comments.
Senator Inouye. Without objection, your statement is made
part of the record.
Admiral Clark. Thank you.
Today we have the Kearsage Amphibious Ready Group in the
Mediterranean (Med), we have the Boxer Amphibious Ready Group
in the Red Sea, we have the Constellation Battle Group in the
Arabian Gulf, and the Enterprise Battle Group in the
Mediterranean getting ready to go relieve the Connie. Behind
them, the Carl Vinson Battle Group out of the Northwest just
completed her final exam and is getting ready to deploy. Her
battle group commander was in to see me yesterday. The Theodore
Roosevelt Battle Group is conducting training, getting ready to
be the next rotational deployer headed toward the Med and then
the Gulf. That is the way it goes. The beat continues.
Here, it has been alluded to already, inside the Beltway we
are in the process of the defense review panels and the opening
rounds of the Quadrennial Defense Review. While I cannot say
with certainty all the things that will come out of that, it is
very clear to me, Mr. Chairman, that when it is complete it
will reaffirm that our Navy-Marine Corps team exists for one
principal purpose and that is to project credible combat power
to the far corners of the Earth, supporting the Nation, the
kinds of things that the National Command Authority calls upon
us to do, being ready to win in combat if we are called upon to
do that, certainly being the force that can help assure access
if we have to go to those far corners and engage in combat,
dissuading and deterring potential adversaries, promoting
regional stability, and so forth.
I would say that, you know, we look at where our Navy has
been. We are 41 percent smaller than we were 10 years ago, but
the demand on this force certainly is not less. Today, this
morning, 96 of the 316 ships that we have in our Navy, 96 of
them, 30 percent, are forward deployed in the far corners of
the Earth. By the way, that is not a high number. It is
oftentimes more than that.
Certainly our Navy faces serious fiscal challenges starting
in 2001. Mr. Chairman and Senator Stevens, you have both
alluded to them. I would just say that we have taken strong
action to live within our means the best way we know how to in
2001. The approval of the requested supplemental appropriation
is at a stage that we critically need that to continue
operations.
Since I have been the Chief of Naval Operations (CNO)--and
I complete 11 months today--manpower has been my top priority,
number one on my top five list. Every place I go, I talk about
being at war for people, being at war for talent. Certainly, to
win this war we are engaging in a campaign plan on three
fronts: recruiting the right people, retaining the right
people, and attacking attrition.
The things that have been supported by this committee are
helping us succeed: bonuses, pay table adjustments, retirement
reforms, better medical for our people. I just want to report
to you that all of those things and the focus that we have on
it are having the desired impact. We are on track in 2001 on
our recruitment and I would tell you that we are winning in
improved retention and this is a good news story. It is a top
priority for our Navy. We have not won the war, but we are
doing the right things and we are headed in the right
directions. That said, we still have to do better, and the
leadership of our Navy, your Navy, understands that.
We are also facing today, and we have had in the past,
significant readiness issues. You all have alluded to them.
Some of these issues are institutional in nature and we can
talk about those in the course of the questions and answers.
The issue that Secretary England raises, increased age of our
force, is a key part of the increasing, in fact spiraling,
operational and support costs to keep our Navy running today.
It has been said our aircraft age, the average age of our
air force today in the Navy, is the oldest it has ever been in
our history. The key challenge that I see is sustaining current
readiness and investing in future key capabilities to make the
future Navy what it has to be, and the Navy-Marine Corps team.
Certainly, in recent years current readiness has come at
the expense of recapitalization and modernization. You have
heard this story before, so that is not news. We have been
buying insufficient numbers of ships and aircraft to make our
future what it needs to be. So this is the major issue, the
challenge that we face today, for the services and the
Congress, coming to grips with the acquisition bow wave that we
face and dealing with future risk for our forces.
One brief word about the infrastructure, if I might. I am
encouraged by the position that has been taken by the President
and by the Secretary of Defense and by Secretary England
regarding the importance of our base structure. I often speak
about quality of service. It is number four on my top five
list. The two items included there include quality of life and
quality of work. We talk about quality of life a lot, not so
much about quality of work.
Too many of our people in our Navy live and work in
facilities that are substandard. Much of the Navy's shore
infrastructure today is in poor condition, and correcting this
requires not just talking about excess infrastructure, which we
have to do, and not just finding and trying to find innovative
ways to satisfy infrastructure needs. That is required, but not
just that. It is going to require from us a commitment that
this is an important part of our working environment and that
we are in fact going to make it right.
So, Mr. Chairman, members of the committee, the challenge
of accomplishing all this today is significant, preparing for
the future. As I come to this, this is the challenge of a
lifetime. To meet it, we must embrace innovation, we must
embrace experimentation, organizational efficiencies that
Secretary England talked about. I just want to say that I am
committed to doing exactly that.

PREPARED STATEMENT

I thank the committee for your continued, continuing
support of our Navy and of our sailors and their families, and
I look forward to responding to your questions.
[The statement follows:]

PREPARED STATEMENT OF VERNON E. CLARK

Mr. Chairman and members of the Committee, thank you for this
opportunity to appear before you. I am grateful for your continuing
support.

THE CONTEXT FOR NAVAL FORCES

The Navy's posture, programs, and character are largely shaped by
the critical question: What does our nation expect its Navy to do? I
believe the nation expects--as it has for much of our history--the Navy
to project sovereign American power in support of national interests
while forward-deployed to the far corners of the earth. The nation
expects us to command the seas; provide on-scene, sustainable, combat-
credible power to promote regional stability; dissuade potential
adversaries; enhance deterrence; and--when needed--prevail decisively
in combat.
Forward-deployed naval forces are central to the National Military
Strategy and integral to regional Commander-in-Chief (CINC) plans for
peacetime and combat operations. On any given day, one-third of our
Navy is forward deployed, protecting command of the seas, ensuring the
free flow of trade and resources, providing combat-ready presence, and
assuring access for joint forces.
Our Navy is shaped by how we meet the national and regional
requirements for forward forces. While some ships and squadrons are
homeported overseas, most are deployed rotationally for periods of up
to six months in an 18-24 month cycle. This construct drives the Navy's
force structure.
While the requirement for forward-deployed, combat-capable naval
forces has remained consistent since the end of the Cold War, assets
available to meet that requirement have decreased markedly. Our force
structure declined 41 percent since 1991, from 538 to 316 ships. Today,
over 30 percent of our ships are forward deployed on average, compared
with 21 percent ten years ago. Although deployed naval forces remain
ready to respond, we no longer have excess capacity for operational
flexibility or experimentation.
Some say emergent technologies have reduced the importance of
forward-deployed forces, allowing us to effectively influence events
without a robust in-theater presence. I do not believe this. In most
cases, dissuading potential adversaries, deterring aggression, and
quickly bringing combat power to bear require on-scene forces. Such
presence is fundamental to providing sustained precision fires for
joint forces, projecting defense over land, and assuring access. In
short, we must remain ready to ``climb into the ring'' with an opponent
and prevail.

PRIORITIES AND CHALLENGES

Upon becoming CNO nearly a year ago, I outlined my top five
priorities, the areas of concern our Navy must address if we are to
sustain readiness and prepare for the future. Today, I would like to
update you on those priorities, including an assessment of our
financial situation.
As you are aware, all of the Services face serious fiscal
challenges in 2001. Early this year, I directed a reduction to our
Flying Hour Program to mitigate funding shortfalls while maintaining
minimum readiness levels for deploying forces. Additionally, the fleet
commanders have been using Real Property Maintenance (RPM) funds to
address rising utility costs, enhance force protection, meet emergent
maintenance expenses, and pay other unforeseen bills.
While these measures avoided significant operational impact,
receipt of requested supplemental appropriations is now critical. An
Omnibus Reprogramming is also vital to supporting a number of other
requirements. These actions, if fully supported by the Committees, will
get us through the year. All requirements beyond the minimum needed to
execute the remainder of fiscal year 2001 have been deferred to next
fiscal year.
This is not the way we want to do business. To address this
reoccurring problem, it is my intent to strengthen our requirements
determination and budgeting processes. I am committed to working within
the Department and with you to break this cycle of underfunding
understated requirements and position us to execute future fiscal years
without redress.
Manpower and Personnel
Navy men and women are our most valuable resource and we must
provide them with the tools and leadership to excel. We are now--and
will continue to be--in a ``War for Talent'' with other employers. To
win this war, we are focusing on recruiting the right people, reducing
attrition, and increasing reenlistments.
Improvements in compensation that you have supported--bonuses, pay
table adjustments, retirement reforms, and better medical benefits--are
having the desired impact. The Navy met its overall recruiting and end-
strength goals in fiscal year 1999 and 2000, and we are on track for
2001. Officer and enlisted retention is edging upward, though we remain
below steady-state goals. Particular areas of concern remain, such as
our 1,300+ pilot shortage. We are currently reenlisting 60 percent of
eligible Sailors who reach the end of their first enlistments, compared
with 48 percent in 1999. Two-thirds of petty officers with 6-10 years
of service are reenlisting, compared with 61 percent two years ago.
Attrition rates are declining, but we still must do better.
As a result of improved retention in fiscal year 2001, we expect to
begin fiscal year 2002 approximately 3,200 Sailors above our authorized
end strength of 372,642, but within the one percent flexibility allowed
by law. This additional strength has improved at-sea manning to the
best level in years, reduced gapped billets by 16 percent, and enhanced
Navy personnel readiness.
Looking ahead, two personnel issues concern me. First is the
erosion in Career Sea Pay, last updated in 1986. Redress of this
problem was authorized in the fiscal year 2001 National Defense
Authorization Act (NDAA) but not funded. Second is the issue of ITEMPO.
We are analyzing the implementation of ITEMPO legislation contained in
the fiscal year 2000 and 2001 NDAAs, including potential funding and
operational impacts. We will work closely with you and the authorizing
committees as we address these issues.
Current Readiness
We are a Navy that has significant readiness shortfalls. While
forward deployed naval forces are prepared to accomplish assigned
missions, non-deployed forces are below satisfactory readiness levels,
making it increasingly difficult to effectively prepare for upcoming
deployments. Figure 1 shows the percentage of time deployed and non-
deployed Navy units reported C1 or C2 in overall readiness during the
last two decades. The gap between these two groups has widened
significantly.

[Figure 1]

The increasing age of our equipment is a major factor contributing
to this trend, mainly due to rising operating and support costs. Our
aircraft fleet is now the oldest in naval aviation history (older on
average than our ships). Increased utilization of repair parts has
driven a 14 percent annual cost increase in this component of our
Flying Hour Program. Many ships, including AUSTIN and ANCHORAGE-class
amphibious ships, as well as our fleet command ships, are reaching the
end of their service lives. These vital ships often require more
repairs than planned for, forcing us to reschedule other ship
maintenance periods.
To arrest these trends, it is imperative that we accurately budget
readiness requirements in fiscal year 2002 and beyond, ending our
reliance on supplemental appropriations. This includes correctly
forecasting requirements such as force protection, utility costs, and
precision guided munitions.

Future Readiness
Sustaining current readiness while investing in key future
capabilities is a most difficult balancing act. In recent years,
current readiness has come at the expense of recapitalization and
modernization. As a result, we have slowed modernization efforts in all
but safety and near-term readiness-related programs.
Today, we face an acquisition ``bow wave'' for ships and aircraft.
After completion of the Defense Department's strategy and force
structure review, we will evaluate the Navy's modernization goals and
determine the appropriate funding levels to procure aircraft, ships,
and network-centric warfare capabilities, as well as conduct research
and development to transform and upgrade the fleet.
I am fully committed to the F/A-18 E/F; the sooner we get it to the
fleet, the sooner we can retire older aircraft. For that reason, we
should procure the upper limit of the multi-year buy. The same is true
of the V-22, once retrofit is complete. DD-21, CVNX, and JSF also
present compelling technological leaps in warfighting capability and
innovation.
The impact of the current low procurement rate goes beyond force
levels. It adversely affects the stability of our unique defense
industrial base. We are paying a premium in program cost because of
production inefficiencies due to the lack of economies of scale. We
need to pursue reform in acquisition and budgeting, which will allow us
to better partner with industry and correct procurement shortfalls.
To ensure future readiness, we must adapt swiftly to emerging
requirements and technological opportunities related to transformation.
Such agility will be central to the success of our conceptual shift
from platform-centric warfare to an emphasis on networked, distributed
systems. The success of this shift will also rely on our commitment to
vigorous technological and doctrinal experimentation, exploration that
will help shape investment priorities in future years.

Quality of Service
A high Quality of Service is directly related to retaining and
motivating Sailors. I define Quality of Service as a balanced
combination of Quality of Life and Quality of Work. While we have
achieved gains in Quality of Life programs, our Quality of Work
requires substantial improvement in many areas.
In previous testimony, I noted that a ``psychology of
deficiency''--the acceptance of sustained resource shortages as a
normal condition--has become ingrained in our operating forces. It is
manifested in such things as substandard facilities and working
environments. For example, much of the Navy's shore infrastructure is
in poor condition because our recapitalization cycle exceeds 160 years,
our backlog of maintenance and repair exceeds $5.5 billion, and our RPM
funding is only about half of the private industry average.
Meeting this challenge requires reducing excess infrastructure and
finding innovative ways to satisfy infrastructure needs. I am hopeful
that fiscal year 2002 will represent a significant improvement in RPM
and military construction accounts.

Alignment
Navy-wide alignment is critical to ensuring our organizations,
systems, and processes deliver a combat-capable Navy ready to sail ``in
harm's way.'' To enhance communications and coordination, we realigned
the OPNAV Staff and more fully integrated the fleets' requirements and
training organizations. These changes will allow us to more accurately
determine requirements, improve readiness, and maximize investment
effectiveness.

CONCLUSION

I thank the Committee for your continued strong support of our
Navy, our Sailors, and their families. Working together, I am confident
that we can meet the challenges of current and future readiness,
allowing the United States Navy to fulfill the missions fundamental to
a more stable and peaceful world. The statements made in this testimony
are contingent upon the results of Secretary Rumsfeld's strategic
review. I ask that you consider them in that light.

Senator Inouye. Thank you very much, Admiral.
General Jones.

STATEMENT OF GENERAL JAMES L. JONES, COMMANDANT OF THE
MARINE CORPS, U.S. MARINE CORPS

General Jones. Mr. Chairman, thank you very much for the
invitation to appear before you. Senator Stevens, members of
the committee, I am delighted to appear to represent the United
States Marines and their families. I would like to underscore
the Secretary's comments and the CNO's opening remarks that
reported that the Navy and the Marine Corps are indeed one
team. You see before you three leaders who are committed to
working together to achieve great things for the Nation in
terms of our naval forces, the people that wear the uniform,
the civilians who work for us, and their families.
I am happy to tell you, Mr. Chairman and members of the
committee, that in the Marine Corps you have an organization
that has a very stable culture and a very clear purpose in mind
of what it is about. Basically, we know what we are and we like
what we do.
As evidence of that, for the past 6 years running, we have
achieved our recruiting goals every single month in terms of
quality and quantity. We recruit roughly 39,000 young men and
women every single year. But the true test of cultural
stability does not come from recruiting alone. It comes from
looking at our retention figures. As we look at our retention
figures, of our first-termers in the Marine Corps we are 95
percent complete for this year's goals and we were actually 90
percent complete with 6 months to go in this fiscal year.
We have a vision for our future that is basically expressed
in both sea-and land-based expeditionary maneuver warfare. In
order to round out the Nation's capabilities to project power,
for 6 percent of our budget we provide about 20 percent of the
expeditionary combat power available to the Nation and fully
one-third of the active force ground combat logistics available
to the United States.
But we still pay for readiness out of modernization and
infrastructure. Forty-three percent of the Marine Corps'
infrastructure is either C-3 or C-4. Thirty-five percent of our
infrastructure is over 50 years old. Our backlog of maintenance
and repairs is about $650 million and, though we have made some
improvements, it is still a very, very important figure.
This past year, spiraling energy costs have affected our
quality of life for our families and been a drain on our
resources that we would otherwise have used for procurement and
other things that we would like to do.
When you think of the Marine Corps, if you would think of
it as an organization that is expeditionary by culture and
transformational by design, I think you would have it about
right. Words are very important in this context and I would
like to discuss two sets of words with very important, but very
different, meanings.
The first set is ``expeditionary'' versus
``deployability.'' In this context, ``expeditionary'' means
that you want to be able to get to wherever you need to get to
fairly quickly and put investments up front so you can shape
and affect the outcome for the desires of the Nation. In this
context, speed is expensive. Too much speed, in other words the
ability to deploy forces too fast and get them there too
quickly, may result in them not being logistically sustainable.
So when you invest in expeditionary forces you have to make
sure of the totality of the investment.
Put another way, it is my belief that the Nation does not
need all of its forces to be able to arrive at spot X or Y on
the globe at the same time. The truth of the matter is we
cannot afford it and we cannot lift it. So we ought to be able
to understand that some of the forces will have to be truly
expeditionary, some of them will be ultimately follow-on forces
and will be deployable, and that is important. But the two
words have different meanings.
The second set of words I would like to just pause and
discuss for a minute is ``transformation'' versus
``modernization.'' In 1973 this country had a serious energy
crisis. We called for transformational goals with regard to the
auto industry to release our dependence on foreign oil and
energy and the like, and we tried very quickly or very
dramatically to transform our auto industry into either
electric or solar-powered cars.
What we actually wound up doing is modernizing our cars. We
made them fuel efficient, they have greater ranges. We adopted
composite metals. We made them safer. So we wound up
modernizing as opposed to transforming, although that is still
a goal. But we stated transformational goals in 1973 and we
really did achieve modernizational goals.
So when you think of those terms of ``expeditionary'' and
``deployable'' and ``transformation'' versus ``modernization''
in terms of the armed forces of the United States, we should
remember that in the last 50 years we have moved forces about
300 times in response to a burgeoning or emergent crisis where
our national interest may be affected. We have actually flowed
follow-on forces forward six times, and we have actually fought
major theater conflicts about three times.
Now, in the main when you look at that force utilization
and you apply the notion of what is expeditionary versus
deployable and what is transformed versus modernization, those
definitions become important in how we use our forces. So we
need both transformation and modernization, but perhaps not in
the same amounts. We are likely to be more dependent on
modernization than we are transformation, which is technology
and science that may or may not come to pass when we want it,
much like the transformation of our automotive industry.
For the Marine Corps, though, transformation and
modernization means general convergence in a direction, on an
axis, and all of these programs converge around 2008 at the
current levels of investment. We are transformation by design,
transformational by design.
As an example of transformational programs, let me just
list a couple for you. Senator Stevens has already referred to
one, but I believe that tilt rotor technology as a technology
is transformational technology. It is not just about the V-22
as a military instrument. It is about an industrial base
question of whether we can adopt this new technology to go from
rotary wing aircraft to tilt rotors and what does that do for
not only the military capability, but the industrial base.
I believe the Joint Strike Fighter is transformational. I
believe the Advanced Amphibious Assault Vehicle (AAAV) also
fits in that definition. They are not always just weapons
systems. I think our integrated logistics concepts by which we
lighten the footprint which supports our forward-based forces
is transformational. Informational operations is
transformational in a military sense, as are precision fires
from our naval ships, which will replace the saturation
bombardments that were relatively imprecise, but by virtue of
the shear mass were able to achieve our objectives in the
twentieth century. So that is a transformational technology.
In modernization I would say the Marine Corps programs such
as Lightweight 155, Landing Craft Air Cushion (LCAC) Service
Life Extension Program (SLEP) program, the High Mobility
Artillery Assault Vehicle (HIMARS), the modernization of our
Cobras and Hueys, our 120 millimeter mortars program, the M-4
rifle, the Joint Tactical Radio, and the KC-130J's are all very
important modernization components.
Mr. Chairman, I believe that our citizens expect that 50
years from now America will be a Nation of great influence,
just as it is today. I believe that we understand how we got to
where we are. Many of you were members of the greatest
generation, are members of the greatest generation, and you
know full well how we got to be where we are today.
I am optimistic that we can do this for our future
generations if we understand why we invest in national security
in peacetime so that we do not have to invest in wartime, if we
understand that national security is not an independent stand-
alone investment, if we understand that such an investment is
the anchor, literally the anchor, that allows our Nation to be
the Nation of global influence, economically, politically and
diplomatically, culturally, scientifically and technologically,
which are really the pillars that make us different from any
nation in the world.
As I have testified before, it is now I think abundantly
clear that 2.9 cents on the dollar for a global superpower is
not adequate. Whatever the Congress and the administration
decides the future investment should be, I respectfully
recommend that it be sustained over a reasonable period of
time.
I am excited by the prospect of working with Secretary
England and Secretary Rumsfeld and the new team with the
Pentagon, a team that brings unqualified expertise in two areas
that critically need to be addressed by the Department of
Defense. One is bringing better business practices to the
Pentagon and the second much-needed acquisition reforms. I am
very encouraged by the public pronouncements of our new team of
civilian leaders in that context.
As a matter of fact, I might say that the United States
Marine Corps is running the largest activity-based costing
management program in DOD right now and perhaps even in the
entire government.
Our budget request is designed with transformation and
modernization in mind. It balances what is truly expeditionary
versus what is deployable. It has convergence in 2008. I
previously testified that for approximately $2 billion you can
achieve that, over and above that 6 percent that we are
normally allocated, you can achieve, you can move that
convergence up before 2008 in many of the programs that I
listed earlier.
Inclusive in this total is modernization of our base
housing and recapitalization of our entire infrastructure. We
have a path for success if we continue to develop our
foundational needs. For me that means an acquisition of Blount
Island by 2004, which is a national asset in my judgment. It is
our national logistics gateway for maritime power projection if
we pay serious attention to the 3.0 Marine Expeditionary
Brigade (MEB) lift requirement that we have not filled in
recent years. I firmly believe that I see a future where
forward land bases on the global playing field will probably be
fewer rather than more numerous in the years ahead. That to me
drives us to some conclusions with regard to naval forces that
we should discuss.
I think maritime prepositioned forces of the future will
explore rapid sealift. I believe that, with regard to our fixed
land bases, we should pay a lot of attention to the rise of
encroachment issues, which are going to dominate the landscape
both here and abroad in the next few years.
Our new Secretary of Defense has said that we should only
replace things if you have something better to replace them
with. I completely agree with that statement and I think we
need to understand those things that we already have that will
carry us into the future.
The rapidly deployable force with staying power that some
have said is nonexistent with regard to land forces, does
exist. It is the Marine Expeditionary Brigade. It is both
expeditionary and deployable, and it is being modernized and it
will be transformed, in part or maybe even in whole between now
and 2008.
We have that today in the naval context. We have the
capability of forcible entry. It is affordable in that it is
bought and paid for up front. It is scalable. It is forward-
based and deployed. It is sustainable. It is joint and
operable, and it is combined arms capable without peer anywhere
in the world, and I make that statement without any fear of
contradiction.

PREPARED STATEMENT

As a final thought, it is an exciting time to be a member
of the naval service. It is a great time to be a Marine. We
look forward to our future, while learning from the past. I am
deeply honored to be here and I look forward to answering your
questions. Thank you.
[The statement follows:]

PREPARED STATEMENT OF JAMES L. JONES

Chairman Inouye, Senator Stevens, distinguished members of the
Committee; it is my pleasure to report to you on the state of your
Marine Corps. On behalf of all Marines and their families, I want to
thank the Committee for its continued support. Your efforts to increase
compensation and improve the quality of life of our young men and women
in uniform have been central to the health of your Marine Corps and are
deeply appreciated.

VISION

I believe the committee is well familiar with the nature of the
present international security landscape and the current state of our
forces, so I will begin simply by noting some of the ways in which
warfare has changed in the 21st Century. In the 20th Century, mass and
volume were the primary methods relied upon to win wars. In their
place, speed, stealth, precision, and sustainment have become the
emergent principles of modern warfare.
These four principles have application from the strategic to the
tactical levels. Furthermore, they are key with regard to how our
forces maneuver and employ weapons as well as to how they exchange
information and logistically sustain themselves. The Marine Corps'
vision, accordingly, is to inculcate these principles into our
doctrine, organization, training, equipment, and support. One
indication of our commitment to do this, reflected in Marine Corps
Strategy 21, is our concerted aim to enhance the strategic agility,
operational reach, and tactical flexibility of our Marine Air-Ground
Task Forces. Speed, stealth, precision, and sustainment are integral to
each of these capabilities.
Indeed, we are revolutionizing our approach to operations with
these 21st Century principles of war in mind. We are moving beyond the
traditional amphibious assault operations which we conducted in the
20th Century. Our goal now is advanced, expeditionary operations from
land and sea to both deter and respond to crises.
The Corps has been our nation's premier expeditionary force since
our landing at Nassau in the Bahamas, two hundred and twenty-five years
ago. To Marines, the term ``expeditionary'' connotes more than a given
capability. For us, it is a cultural mindset that conditions our
Marines to be able to rapidly deploy with little advance warning and
effectively operate, indefinitely, with organic logistical support in
an austere environment. The Marine Corps' culture reflects that
expectation, and the acknowledgement of the necessity to do more with
less and to be prepared to fight and win with only the resources we
bring with us. We have the flexibility to shift focus rapidly, from one
mission to an entirely different one, without the need to return to
fixed bases for refitting or retraining. In turn, we have worldwide
responsiveness and the versatility to undertake missions across the
spectrum of operations.
A prime example of these attributes is resident within our medium
weight Marine Expeditionary Brigade (MEB). Nearly ten years ago, in
light of pressing manpower considerations, we deactivated our six
standing brigade command elements. Last year, we reestablished three
Marine Expeditionary Brigades by embedding their staffs within our
Marine Expeditionary Force headquarters. These units are now actively
operating. The 1st MEB recently participated in NATIVE FURY, a
humanitarian assistance operation in Kenya, and 2d MEB completed a
Maritime Prepositioning Squadron offload exercise, DYNAMIC MIX, in
Greece.
The versatility of the MEB is emblematic of the unique scalability
of our Marine Air-Ground Task Forces. In size and capability, these
brigades are midway between our Marine Expeditionary Units and our
Marine Expeditionary Forces. Furthermore, our MEBs can either deploy on
amphibious shipping or be airlifted into a theater of operations and
join up with Maritime Prepositioning Forces.
A special characteristic of our MAGTFs is that they consist of five
integrated elements: command; ground combat; aviation; logistics; and,
supporting establishment. The MEB consists of a regimental landing
team, with organic infantry, artillery, and armor elements, and in
addition to a composite aircraft group with both fixed-wing and rotary-
wing aircraft, it also has a combat service support group--whose
supplies can sustain the MEB in full scale combat for thirty days. Each
of these elements reinforces the others. This teamwork, built on
training and experience, reaches across every battlefield function,
creating a unique degree of synergy that distinguishes our units from
others.
Ultimately, our vision of the future and our expeditionary culture,
along with our philosophy of maneuver warfare, come together in our
emerging capstone concept, Expeditionary Maneuver Warfare. Achieving
the full promise of that concept will hinge on our efforts to balance
the competing demands of near-term readiness and investment in
equipment modernization and infrastructure. This is no small task.
These over-arching concerns are interrelated and in the long-term we
cannot have one without the others.
In order to improve our near-term readiness, we have made
significant internal adjustments over the past two years. Through
reduction in attrition of our first term Marines, internal management
efficiencies, outsourcing, and privatization, we will eventually return
over 3,000 Marines to the operating forces. We are also utilizing
numerous best business practices to make our operations both efficient
and effective and now have the largest Activity-Based Costing/
Management program in the Department of Defense, if not all of
government. While these efforts have improved the efficient application
of fiscal and manpower resources, and directly supported our commitment
to personnel readiness in the operating forces, we are still assessing
the totality of our personnel requirement. Should a need for additional
personnel be determined, we are confident that commensurate funding and
our continued recruiting and retention successes will support any
required increase.
Despite such supports, we are, regrettably, continuing to maintain
our near-term readiness at the expense of our future readiness. As a
result of the Defense Reviews of the past decade, the nation has
consistently limited the resources dedicated to its security.
Consequently, the dramatic increases in operational requirements
coupled with topline constraints over the last several years have
mandated a substantively reduced rate of investment in equipment
modernization and infrastructure. We are, in fact, at a point where
failure to rectify those shortfalls can no longer be neglected. As a
nation with global responsibilities, we cannot ignore the critical
importance of readiness.

READINESS

We assess our readiness in terms of ``four pillars:'' Marines and
their families; our infrastructure; our legacy equipment systems; and,
our modernization efforts. Each of these pillars requires attention and
resources in order to ensure your Corps is prepared to serve our
nation's interests. I will discuss each of the pillars and comment on
what we are currently doing and what we want to do with the support of
this committee, beginning with the most important part of the Marine
Corps, its people.

Our Marines and Their Families
The Marine Corps has three major goals: making America's Marines;
winning our nation's battles; and, creating quality citizens. The fact
that people are the focus of two of these three goals exemplifies the
extent to which we recognize the special trust and confidence that the
nation reposes in us for the care and welfare of the young men and
women in our charge.
Safety is central to the Corps' focus on people and it is a
critical component of maintaining our readiness. It is also a vital
element of the quality of life that we provide our Marines and their
families. Along these lines, I am pleased to report that we have
significantly lowered our off-duty mishap rates. Moreover, we have had
notable success in aviation safety: our Class ``A'' flight mishap rate
is the lowest it has ever been at this point in the fiscal year. For
these trends to continue, it will take our unrelenting attention and we
are dedicated to maintaining our focus on this important issue.
One factor contributing to our safety challenge is that we are a
young force. The average age of our Marines is twenty-three, roughly
seven to nine years younger than the average age of the members of the
other services. This is part of the culture of the Corps inasmuch as
our unique force structure results in over two-thirds of our Marines
being in their first enlistment. The nature of our force structure
requires us to annually recruit more men and women into our enlisted
ranks than does the Air Force, for example. To fulfill this tremendous
demand, our recruiters work tirelessly and have met our accession goals
in quality and quantity for nearly six years.
Retention is equally as important as recruiting, and we are proud
that we are meeting our retention goals across nearly all military
occupational specialties. Intangibles--such as the desire to serve our
nation, to belong to a cohesive organization, and to embrace leadership
responsibilities satisfied by service in the Corps--are a large part of
the reason we retain the remarkable men and women who choose to
continue to be Marines after their initial commitment. Concrete
evidence of this phenomena is seen in our deployed units, which
continually record the highest reenlistment rates in the Corps.
Retention success is also partly a consequence of the investment we
make in supporting our operational forces--to give our Marines what
they need to do their jobs in the field when they are deployed--as well
as the funds we earmark for educating and training our Marines.
Moreover, while we recruit Marines, we retain families. Your
support of our families' quality of life has contributed greatly to our
retention success. As noted earlier, the effectiveness of our Marines
is dependent, in large measure, on the support they receive from their
loved ones. Our families are indeed vital to our readiness. Increased
pay as well as improved housing and health care directly influence our
families' quality of life and, in turn, bolster the readiness of our
units.

Our Infrastructure
Beyond providing for our families, your support in allocating and
sustaining resources for our bases and stations has had a profound
impact on our readiness. Bases and stations are the launching pads and
recovery platforms for our deployed units and thus are integral parts
of our operating forces. Hence, we want to ensure that our posts
possess the infrastructure and ranges necessary to prepare our Marines
for the wide variety of contingencies they can expect to confront.
Equally important, they are sanctuaries for many of our families.
Moreover, just as our bases and stations are vital to our current
readiness, the recapitalization of our infrastructure is as important
to our warfighting strength in the future as is modernization.
Increasingly, the many forms of encroachment threaten to degrade
our readiness. When most of our bases and stations were established,
they were distant from civilian population centers. Today, population
growth and commercial development have not merely reached our
installations, they have enveloped them. There are two major
ramifications of this phenomenon. The first is that our bases and
stations often are the last remaining wilderness zones in otherwise
over-developed areas--which has meant that we have to balance our
training requirements with our increasing responsibilities as
environmental stewards. The second consequence is that we are now
obliged to routinely deal with a wide variety of complaints, often
regarding noise or flight patterns from citizens who now live in
proximity to our bases and stations.
Such concerns about sea, land, and airspace utilization have
necessitated close coordination and frequent compromise with many
elements of the civilian sector. Accordingly, we work diligently to be
good neighbors and try to accommodate the demands of environmental
protection and concerns of adjoining communities without degrading
training and the mission effectiveness of our Marines. Despite this
focus, encroachment issues have the potential to increasingly affect
readiness in the years ahead. We need your continued support to ensure
that the growing complexity and expense of encroachment issues do not
hamstring our efforts to conduct meaningful training in order to
provide for national security.

Our Legacy Equipment Systems
Our present and future readiness do not rest solely on the
investments we make in our personnel and infrastructure. We also must
consider the equipment we give our Marines. This is no simple task. We
must apportion our allotted resources between maintaining the ability
to respond to crises and the requirement to lay the foundation for our
capacity to respond to the security challenges of the future.
As a consequence of the procurement pause of the 1990s, many of our
weapons, vehicles, aircraft, and support systems are approaching block
obsolescence. In the last decade, we have watched the size of our
forces decline while the number of contingencies has increased. Under
these circumstances, our equipment has been put under tremendous
stress. Marines are spending ever-increasing amounts of time conducting
preventive and corrective maintenance. Moreover, we are spending more
and more money on spare parts to repair our legacy equipment. The
limited availability of spare parts has put additional strain on these
efforts. Our procurement programs seek to address this concern, but we
are acutely aware that the acquisition process is often a slow
enterprise. As a result, our legacy equipment systems and our efforts
to maintain them will remain central to the readiness of our Marine
Air-Ground Task Forces until our modernization programs replace those
aging pieces of equipment.

MODERNIZATION

We recognize that we cannot know for certain what missions and
threats we will face in the future, and that, as a result, we need to
hedge our modernization programs in such a way as to provide America
with weapons platforms that are flexible and robust enough to allow her
Marines to excel across the wide spectrum of tasks and environments
that they may encounter. The Marine Corps looks to the Advanced
Amphibious Assault Vehicle, V-22 Osprey, Joint Strike Fighter, KC-130J,
Lightweight 155mm Howitzer, High Mobility Artillery Rocket System,
Medium Tactical Vehicle Replacement, Naval Precision Fires, and
increased amphibious shipping, among other systems, to give us the
versatility that we will need in the decades to come.

Advanced Amphibious Assault Vehicle
The award winning Advanced Amphibious Assault Vehicle program is
the Corps' highest ground acquisition priority and promises to allow
high-speed surface maneuver from ship-to-shore as well as on land.
Importantly, these vehicles will be able to deploy to their objectives
from over the visual horizon, which will allow our ships to remain
beyond the range of many threat weapons and surveillance systems. This
capability will help negate an enemy's anti-access strategies and
enable expeditionary operations from the sea.

V-22 Osprey
The Osprey remains the Corps' premier near-term aviation
acquisition priority. Tiltrotor technology promises to revolutionize
aviation and the V-22 will radically increase our strategic airlift,
operational reach, and tactical flexibility. The Osprey's superior
range, speed, and payload will allow us to accomplish combat missions
and other operations from distances previously unattainable and at
faster response times than possible with other airframes.
We are acutely aware of the challenges associated with the Osprey
but are gratified that the Review Panel, appointed by then-Secretary of
Defense William Cohen, concluded that tiltrotor technology is mature
and that, though the aircraft's reliability and maintainability must be
improved, the V-22 is cost-effective and provides the Marine Corps with
capabilities that cannot be provided by any single helicopter or
conventional aircraft. Indeed, the Panel's conclusions mirror those of
seven major cost and operational effectiveness analyses and the fact
that the tiltrotor XV-15 has been flying since 1977.
We are presently in the process of ensuring that the V-22 is
reliable, operationally suitable, and affordable--just as we did forty
years ago with each of the aircraft the Osprey is intended to replace.
Currently, 85 reliability and maintainability improvements have been
incorporated, or are on contract for incorporation, on the Osprey's
production line--out of the 120 identified. With time, diligence, the
close cooperation of our partners in industry, and with the support of
the Congress, we can work through the present challenges confronting us
and achieve the tremendous operational capabilities offered by this
remarkable aircraft.
As has always been the case, our actions will be guided by an
unyielding commitment to do what is right for our Marines, their
families, and our nation. In asking for your support, I assure you that
we will not compromise our integrity or jeopardize the safety of our
Marines for any program.

Joint Strike Fighter
Another aviation modernization effort of great importance is the
Joint Strike Fighter. The Joint Strike Fighter is, first and foremost,
a product of Congressional guidance from the 1980s. At the time, all of
the services routinely produced a large number of different airframes.
Congress, therefore, asked the Department of Defense and industry to
develop airframes that could be used in common by the services. The
Joint Strike Fighter is the first step in that direction. The Short
Takeoff and Vertical Landing variant promises to combine the current
basing flexibility of the AV-8 Harrier with the multi-role
capabilities, speed, and maneuverability of the F/A-18 Hornet to
fulfill both the Marine Corps' air-to-ground and air-to-air mission
requirements, as well as incorporate both stealth and standoff
precision guided weapon technology. Just as the Joint Strike Fighter
has incredible operational potential, it also holds remarkable promise
for our industrial base and our nation's economy. Considering the fact
that many of our allies have expressed interest in becoming partners in
the program, the aircraft has the potential to bolster our defense
industrial base to a degree similar to that achieved by the F-16
Fighting Falcon over the past twenty-five years.

KC-130J
Replacement of our aging KC-130 fleet with KC-130J aircraft is
necessary to ensure the viability and deployability of Marine Corps
Tactical Air and Assault Support well into the 21st Century. The KC-
130J's performance features include increased cruise airspeed, night
vision compatible interior and exterior lighting, enhanced rapid ground
refueling capability, digital avionics, and powerful propulsion
systems. These strengths promise lower life-cycle expenses and
eliminate the need for costly KC-130F/R Service Life Extension
Programs. With the KC-130J, our aerial refueling fleet will be ready to
support the tremendous increase in capabilities that the Osprey and the
Joint Strike Fighter promise to provide for our Marine Air-Ground Task
Forces.

Lightweight 155mm Howitzer
A number of ground weapon system programs are also of great
interest to us. The Lightweight 155mm Howitzer is our first priority in
this regard. The Lightweight 155 is a joint Marine-Army program that
meets or exceeds all the requirements of the current M198 Howitzer
while reducing the weight of an individual artillery piece from 16,000
to 9,000 pounds. This lower weight allows for tactical lift by both the
CH-53E Sea Stallion helicopter and the V-22. Moreover, the digitization
of this platform will greatly reduce response time and increase
accuracy. The program's Engineering Manufacturing Development phase is
scheduled to be complete this summer and we plan to begin production in
fiscal year 2002.

High Mobility Artillery Rocket System
Also integral to our plans to improve our fire support is the
acquisition of the High Mobility Artillery Rocket System (HIMARS). This
system is designed to be rapidly deployable as a key part of our
expeditionary operations. It will fire both precision and area
munitions, as well as extend our ground-based fire support umbrella to
45 kilometers. HIMARS's tactical mobility, small logistics footprint,
and capacity to deliver heavy volume fires against time-sensitive
targets will, in conjunction with the Lightweight 155, at last remedy
the fire support shortfall we have known for much of the last two
decades.

Medium Tactical Vehicle Replacement
The Medium Tactical Vehicle Replacement is at the heart of Combat
Service Support modernization and will provide our forces improved
sustainment and permit maximum flexibility in responding to crises. The
vehicle's weight and height allow it to be transported internally by
the KC-130 Hercules aircraft and externally by the CH-53E Sea Stallion
helicopter. The Medium Tactical Vehicle Replacement can readily
negotiate terrain twice as rough as our current vehicles can, and it
has increased payload, speed, and reliability.

Naval Precision Fires
Marine Corps expeditionary capabilities are intrinsically linked to
our partners, the U.S. Navy. One illustration of this, among many, is
that Naval precision fires are an essential dimension of our power
projection capabilities. Yet, today the available resources for Naval
fire support are sorely limited. Efforts to upgrade current naval
surface fires capabilities are focused on modifications to the existing
Mark 45 gun mount as well as the development of an advanced gun system,
extended range guided munitions, and the Land Attack Standard Missile.
The future of naval precision fires is represented by the Zumwalt class
DD-21 Land-Attack Destroyer and the development of an extended range
missile system. Taken together, these planned enhancements will
dramatically improve the range, responsiveness, accuracy, and lethality
of the Naval Surface Fire Support provided to forces ashore.

Amphibious Shipping
Our forward-based presence around the globe is becoming
increasingly constrained while threats to force protection grow. As a
result, America's operations are less and less likely to rely on large
fixed bases overseas for deployment or sustainment. Accordingly, in
most cases of crisis prevention or crisis response, U.S. forces are
going to deploy and sustain operations either from our ships or our
homeland.
Projecting power from the Continental United States, however, has
substantive limitations. It is, in fact, myopic to think we can deter
or defeat aggression overseas solely with capabilities based here in
the United States. It is going to take presence in the operating area--
more accurately, it is going to take a sea-based presence in the
operating area, a formation of joint assets that together project and
sustain combat power ashore while reducing or eliminating our landward
footprint. Nonetheless, the United States Navy's fleet of ships has
shrunk by nearly 40 percent of what it was a decade ago, despite the
fact that the enduring requirements of global sea control, strategic
deterrence, naval forward presence, and maritime power projection have
not declined. Similarly, our amphibious fleet, which has been
chronically under-resourced, remains the linchpin of the Corps' ability
to shape the international security landscape, project power, and
respond to crises.
We are grateful for your support to replace four classes of older
ships with the new LPD 17 San Antonio amphibious ship class. The
delivery of these twelve ships to the fleet is programmed to be
complete at the end of the decade. Unfortunately, such an extended
time-frame for ship design, construction, and delivery is typical and
underscores the critical importance of ensuring now that we are ready
to replace the LHD Wasp class ships when they reach the end of their 35
year service life starting in 2011.
Today's amphibious ship force structure, when the number of active
fleet vessels is combined with reserve ships that can be mobilized, has
the capacity to lift nearly two and a half Marine Expeditionary Brigade
assault echelon equivalents. Several formal studies have concluded that
the actual requirement is an amphibious ship force structure capable of
lifting three Marine Expeditionary Brigade assault echelon equivalents
in order to satisfy all forward presence requirements while maintaining
the flexibility to deal with the unexpected.
Additionally, our current fleet of maritime prepositioning ships
will require replacement in the 2020 timeframe. The development of
advanced maritime prepositioning capabilities will incredibly advance
the strength and flexibility of our sea-based expeditionary operations.
The marriage of a modern amphibious fleet with maritime prepositioning
shipping capable of hosting at-sea arrival and assembly of forces will
eliminate the requirement for access to secure ports and airfields, and
give our nation an unmatched asymmetrical advantage in projecting
power.

Convergence
Looking ahead, the programs we have planned will, with your
support, begin to converge in our operating forces in 2008. In the not
distant future, the Advanced Amphibious Assault Vehicle, V-22 Osprey,
Joint Strike Fighter, KC-130J, Lightweight 155, High Mobility Artillery
Rocket System, Medium Tactical Vehicle Replacement, Naval Surface Fire
Support, amphibious shipping, and a number of other smaller programs
will together dramatically transform our expeditionary capabilities. As
discussed earlier, these systems promise to embody speed, stealth,
precision, and sustainment as well as afford us modern agility,
mobility, and lethality. But, we cannot stop here. We must work
together with the Navy and our defense industrial base to exploit other
opportunities to advance our capabilities in the future. Continuous
modernization is key to our long-term national interest because without
it, we will fail to keep pace with change. The Corps has an
institutional tradition of such innovation. Inasmuch as we are
expeditionary by nature, we are transformational by design. Indeed, we
have long viewed transformation as an evolutionary process, not a
singular event.

TRAINING AND EDUCATION

People, not systems, are the fundamental component of the Corps.
Just as we are continually striving to evolve our doctrine, equipment,
and supporting establishment so that we can better win our nation's
battles, we are also constantly moving forward to improve how we train
and educate our Marines.
We believe the old adage, ``you fight the way you train.'' Because
of this, our training exercises are becoming ever more Joint and
Combined in order to provide our Marines with the experience that they
will need when they are called upon to respond to crises--because there
is no doubt that they will work alongside our sister services and
partners from other nations in such circumstances. Moreover, we
recognize that while our first duty is to be ready to win our nation's
battles, we are increasingly called on to execute missions at the lower
end of the spectrum of operations. Accordingly, our exercise scenarios
emphasize both conventional warfighting missions as well as operations
other than war.
Experience in tandem with education is the best foundation for
dealing with both difficulty and fortuity. Accordingly, we are not only
focused on training our Marines, but on educating them as well. We have
expanded our distance learning programs to ensure that greater numbers
of Marines have the opportunity for education, not merely those who
attend resident courses. In light of this, we are adjusting
administrative policies to accommodate family concerns--such as spouses
with careers or children with exceptional needs--when selecting
officers to attend our various schools that require a change in duty
station. Moreover, we have instituted a year-out program for our junior
officers that places them within the corporate world, think-tanks, and
the Congress, in order to widen their perspectives.

OUR MARINE WARRIOR CULTURE

At the very heart of the Corps and its relationship to each Marine
is our service culture. The Marine Corps is sui generis--that is, we
have a nature that is distinct from all others. This goes beyond the
unique characteristics of our expeditionary Marine Air-Ground Task
Forces which are always prepared to be deployed overseas. It, in fact,
pertains to our warrior ethos. From the individual Marine to our
institution as a whole, our model is the thinking and stoic warrior who
fights smarter than his enemy and is inured to hardship.
Our commitment to maintaining our warrior culture is illustrated by
our recently instituted martial arts program. We have developed a
discipline unique to the Corps and are in the process of training every
Marine in its ways. This program seeks to promote both physical prowess
and mental discipline. Different levels of achievement are rewarded
with belts and reflect a combination of demonstrated character,
judgment, and physical skill. This training will benefit Marines across
the panoply of missions we face; especially in peacekeeping operations
where physical strength and mental discipline are vital to such things
as crowd control. Furthermore, our martial arts training is
fundamentally concerned with mentoring our young men and women to
understand that the key to mission accomplishment often is a matter of
using intelligence, strength, and self-control to influence
circumstances, rather than always resorting to the simple application
of brute force.
I would like to note that each of the United States' Armed Services
has a different set of responsibilities legislated by Congress under
Title 10. The services have separate operating roles and institutional
structures, just as corporations are not carbon copies of one another.
Indeed, cultural diversity is a force multiplier. Consequently, ``one-
size fits all'' standards are often not the best solutions in the
Department of Defense, despite the importance of our on-going work to
be fully joint in the conduct of operations. Therefore, it is important
to understand how the differences between the services may require
separate and service-specific means of accomplishing universal goals
such as promoting the quality of life of our people.
The recently enacted PersTempo Program is an example of a
requirement that is likely to impact each of the services differently.
The 2001 National Defense Authorization Act mandated that any service
member deployed more than 400 days in two years receive $100 for each
additional deployment day. While the larger services may be capable of
managing the restriction placed on deployments and the additional costs
associated with this requirement, the policy runs counter to the Corps'
rotationally deployed, expeditionary force identity as well as our
limited budget.
Our young men and women join the Corps to make a difference, to
challenge themselves, and are prepared to deploy in service of our
country. The testament to this is our success in recruiting and
retention: the ``acid-test'' of any service culture. Our young Marines
and their families understand that our forward presence and
expeditionary deployments are the core expression of our warrior
culture. It is why they are Marines. And, in turn, though the PersTempo
Program may be appropriate for the other services, its present
construct does not comport with the Corps' culture and missions, and is
likely in the long run to have a profoundly deleterious effect on our
cohesion and on our ability to conduct operations and training.

CONCLUSION

Looking at the Corps overall, I think one of the clearest
indicators that our people are our first priority is that presently
sixty percent of our budget is allotted to funding our manpower. Yet,
this fact also emphasizes the relative state of the other pillars of
readiness, especially modernization; which has been shortchanged for
most of the past decade. The Marine Corps has long prided itself on its
ability to do more with less. Nothing reflects this more clearly than
the fact that the Corps provides twenty percent of our nation's ground
and aviation combat force with just six percent of the Department of
Defense budget.
Just as the other services have pursued plans to reorganize from a
Cold War posture to one that matches the post-Cold War world, the
Corps, too, has adapted itself to the challenges and opportunities that
have emerged during the last ten years. But, inasmuch as we are in what
future historians may call ``the expeditionary age,'' I want to
underscore that the Marine Corps has always been and will continue to
be our nation's premier expeditionary force. That identity is central
to who we are as Marines.
With that firmly in mind, the Corps has carefully plotted a course
for the future. Indeed, if the programs we have currently planned are
properly funded, we will see a convergence of leap-ahead capabilities
in our Marine Air-Ground Task Forces by the end of this decade that
will revolutionize our expeditionary operations.
Our nation's current strategy and force structure may change in
light of the many reviews initialized by Secretary of Defense Rumsfeld.
Yet, only a sustained increase in resources will yield the operational
strength, flexibility, and resilience we envision in both the short and
the long-term. As I have testified in the past, an increased investment
by this Committee, the Congress, and the American people, of
approximately $1.8 to $2 billion a year sustained for the next eight to
ten years--a modest step that is less than one percent of what is
allotted to the overarching national security budget--will permit us to
fulfill our vision and ensure that the Corps continues to defend
America's far-flung national security interests, now and in the future.
Such an investment addresses our warfighting readiness requirements,
accelerates the pace of our modernization, and recapitalizes our
infrastructure. This, in fact, is our transformation. With your
consistent support we can achieve our goals and provide our Marines
with a Corps that, by 2008, will be well on the road to dramatically
transformed expeditionary capabilities.

DD-21

Senator Inouye. I thank you very much, General.
Mr. Secretary, I will forgo asking questions on the V-22
Osprey because of the important role Chairman Stevens has
played in the development of this program. But I would like to
ask a question on the DD-21, which has been touted as the ship
of the future. I note that the contract award has been delayed
awaiting the Secretary's review and the QDR. Can you give us
some hint as to where we are now? Has a decision been made?
Mr. England. Mr. Chairman, with your permission I would
like to defer that question to Admiral Clark. I have recused
myself from those discussions, so I have not been involved in
DD-21 and will not be for some time. So with your permission I
would like to have Admiral Clark address that, please.
Senator Inouye. All right, sir. Admiral Clark.
Admiral Clark. Mr. Chairman, of course this activity is by
law the responsibility of the acquisition executive is not
here. But I am happy to speak to this issue with the
understanding that I have of the sequence of events and where
we stand. We have and I have testified that we need the
capability that DD-21 brings to the Navy.
General Jones talked about transformational issues. There
are transformational pieces in DD-21. The technology that comes
with the integrated power system is not just modernizing a new
ship just like ones we have built in the past. The incredible
steps to inject manpower savings into the platform, very
important. A number of things that--we could talk about the
benefits of DD-21, but that is not really your question.
Your question is where are we in the process. I believe
that the decision made by the acquisition executive was the
correct decision, and that was to not step forward and do a
down-select at a time when so much review is going on about the
future of the entire military, not just the Navy-Marine Corps
team; and that with these reviews ongoing and with the QDR not
just in the opening rounds but ongoing, with ends in sight in
the very near future, this was the right step to take.
The question about how long will it be before the Navy has
a clear direction ahead, I think that it would be appropriate
for us to respond to you for the record on that and the
acquisition executive state his case. But it is clear that the
real time line is tied to these other events that I have
mentioned. Now we are not talking about months and months and
months. We are talking about weeks to a couple of months, and
it is my understanding that that is where we are in the
process, Mr. Chairman.
Senator Inouye. Assuming that it moves along according to
the timetable, is there a role for the DD-21 in missile
defense?
Admiral Clark. Well, one of the potential longer term
solutions is--DD-21 is not a missile defense ship in and of
itself when you talk about--I mean, it is going to have great
capability. But early in the development process it was talked
about this perhaps being a transitional ship to a CG-21 at some
point in the future. That is not under contract. That is not
part of this development process, but it is easy for me to see
that that could some day be a reality.
What I would say, Mr. Chairman, is this, is that the
technology that is part of the DD-21 development is technology
that we need in our future Navy. So it seems to me that it is a
natural thing for us to consider, in fact it would be very
unwise for us not to consider, the potential for such a
solution in the future.
Senator Inouye. Thank you.

JOINT STRIKE FIGHTER

Mr. Secretary, another matter on the Joint Strike Fighter
(JSF). We have had press reports suggesting that a decision has
been made. Has this decision been made?
Mr. England. No, sir, not to my knowledge.
Senator Inouye. Do you believe that the Joint Strike
Fighter is affordable with other priorities on F-18/E and F and
V-22?
Mr. England. Yes, sir. I believe that the JSF is a very,
very important platform, not just for the Navy but for the
Nation, sir. I know that Senator Stevens just returned from the
Paris Air Show. My own experience is that the United States has
been preeminent in aviation since the dawn of aviation.
Frankly, we have started to lose that preeminence in the
commercial sector. We have been targeted, I believe,
particularly by the Europeans in our military sector. It is
very, very important that we remain dominant in this
technology. It is important from a military sense, but it is
also very important from a civilian technology point of view to
be preeminent.
It is important in my judgment to our naval services. It
does provide us a long-range stealth platform that would
augment our F-18E/Fs, and of course is critical to the United
States Marine Corps. So this is a very important program and we
will work very, very hard to find a way to make sure it fits
within our budget. If anything, I would like to accelerate that
program based on the briefings I have had to date.
Senator Inouye. General, the Secretary just said that it is
very important to the Marine Corps. Why is that?
General Jones. Mr. Chairman, some years ago my predecessor
in the leadership of the Marine Corps made a decision to go for
a generation leap, if you will, in technology. That leap meant
that we decided to stay with our legacy F-18's and Harriers for
a longer period of time based on the promise of the Joint
Strike Fighter.
Everything I have seen to date from both competitors,
whether it be the Conventional Takeoff and Landing (CTOL) or,
as we are seeing now, even Vertical/Short Takeoff and Landing
(VSTOL), is extraordinarily promising. Since I have been in
office, I have been to several conferences around the world
with my military counterparts, and I also just came back last
night from the Paris Air Show. I am astounded at the number of
senior leaders in uniform that approached me on the side and
asked me with some sense of urgency, how is the Joint Strike
Fighter progressing; you know we consider that to be very
important to us.
Our British friends have invested over $2 billion up front
in betting on this technology. In fact, they are restructuring
the Royal Air Force based on the promise of the Joint Strike
Fighter and the ability of those aircraft to fly off the ships
of the Royal Navy.
For the Marine Corps, I mentioned this is a
transformational capability because of its stealth, its range,
its payload, its survivability. It will in fact replace two
lines of aircraft that we currently use. Admiral Clark and I
are in complete agreement that we have to figure out the way to
get to JSF, as it is not only a militarily transformational
capability, but also probably has the potential of being the F-
16 of the 21st century for the industrial base of the United
States.
Senator Inouye. Thank you very much.
Senator Stevens.

SUPPLEMENTAL

Senator Stevens. Thank you very much, Mr. Chairman.
Admiral Clark, you mentioned the supplemental. This is not
a hearing on the supplemental, but just for my and the
committee's information, is there a real deadline for money in
July?
Admiral Clark. There is, Senator, and it has to do with the
operating accounts.
Senator Stevens. Steaming hours, flying hours?
Admiral Clark. Steaming hours and flying hours,
specifically flying hours. We must have relief soon or in July
I will have to start taking some actions to further inhibit the
flying hour program. I say further because I have already taken
action and I did early in the year to bring the level of
release of funds in the flying hour program from a level that
would keep us within the required standards for readiness
standards for deployment.
But if we do not have relief in July, I will have to take
additional actions at the operational level.
Senator Stevens. How many ships of the line do you think
you have now?
Admiral Clark. I am sorry?
Senator Stevens. How many ships of the line do you think
the Navy has now?
Admiral Clark. Well, I have 316 ships that are in
commissioned or United States Naval Ship (USNS) civilian-manned
ships.
Senator Stevens. What is the average age?
Admiral Clark. The average age of our force today is
slightly over--between 15 and 16 years.
Senator Stevens. What is your rate of replacement now?
Admiral Clark. The rate over the last several years, 1 year
it is six and 1 year, but it has been between six and seven
ships.
Senator Stevens. So your average age is going up about
every other year by a year?
Admiral Clark. I would have to run the math, Senator, but
fundamentally it tells you that if you buy 6 a year, 30-year
ships, you are going to a 180-ship Navy.
Senator Stevens. Not good.
Secretary England, I want to get provincial first, if I
may. We are dealing now with the final stages of ending the
Navy's presence in Adak and I know that you realize we are
appreciative of what the Navy has done to assist the local
reuse authority. The community at Adak is an Alaskan Native
community. It has now incorporated as a new city and will
become Alaska's westernmost city. It has great hopes of
becoming a free port and other things.
We have a problem in that special legislation is now
required by Congress to convey the property to the Aleut
Corporation. Are you familiar with that transfer problem?
Mr. England. I am familiar, sir, that that is in process. I
can tell you that my understanding is that most of that
property intended for conveyance, except for the Mount Moffett
area, will be environmentally suitable for transfer by early
next year, 2002, and the Mount Moffett area will be ready for
conveyance by early 2003.
So my understanding is that is now coming to a conclusion,
sir.
Senator Stevens. I thank you. Again, I thank you for the
assistance. I think there is a future for that city. It is so
far out, people forget that it is west of Australia.

V-22

General Jones, can we talk about the V-22 yet?
General Jones. Certainly, sir.
Senator Stevens. Where are we now in the follow-up on the
task force report?
General Jones. Sir, as you know, the task force convened to
answer basically several fundamental questions. The first one
in my mind was is tilt rotor technology mature? I believe that
the testimony of the task force was very powerful in that
context and they answered the question with a resounding yes,
that the technology is in fact not only mature, but, to quote
from their testimony, that it is in fact a national asset.
Senator Stevens. There has been no question raised as to
basic technology involved?
General Jones. The panel affirmed that the technology is
mature and characterized it as being a national asset for the
industrial base of the United States.
The second question, though, was if the technology is
mature then is it operationally robust enough for use in the
fleet or by marines? On that question, we are going back to the
drawing board because their detailed investigation, which I
thought was quite comprehensive, showed a number of things that
were troubling and needed to be repaired.
Some of it is related to just engineering. It has nothing
to do with technology itself. Specifically, the chafing of
hydraulic lines in the nacelles was found to be a bigger
problem than anyone had suspected. We were fortunate, to the
degree there is anything fortunate in a tragic accident, but we
did recover the part that failed in the December accident in
North Carolina, revealing that wiring bundles had chafed the
hydraulic fuel line to the point that it caused the fuel line
to burst. That, coupled with the anomaly in the software flight
control system, combined to cause the accident.
There is some work that needs to be done, obviously, in the
software. That is ongoing. We have addressed already 85 of the
120 recommendations by the panel to be corrected. We have
shored up to the extent that it needed to be the cohesion
between the production base and the operational base of the
marines and the squadron that are not only working on the
aircraft, but will once again fly in the aircraft, to make sure
their confidence, as you mentioned in your opening statement,
is restored.
We had intended to be able to accept your request to go
down and visit that flight lane. That invitation to you and the
chairman and members of the committee is always there. I
welcome that opportunity at your convenience. I think you will
be pleased by what you hear and see.
Senator Stevens. Is it flying now?
General Jones. It is not flying now, sir, and it will not
until we have resolved the engineering rewiring of the nacelle.
Senator Stevens. Is there a timetable on that, General?
General Jones. We are in the first 30 days of a 90-day
review that was asked for by the Under Secretary for
Acquisition and Technology. Those determinations are being made
right now. It would be speculative on my part to guess as to
when that might be, but I think we are talking before the
entire program is restored to full health, I think we are
seeing at least a year's slip.

EA-6B

Senator Stevens. Mr. Secretary, in terms of the EA-6A's and
EA-6B's, my staff and I have looked at that and I understand
there is a study now concerning the EA-6B fleet and that there
are two different proposals regarding the EA-6B's. It is my
understanding further that the United States Navy is now the
only service that is relied upon, or at least the lead service
that is being relied upon, to provide the electronic attack
mission.
Now, I have two questions. Do you believe that this funding
for the plan for the EA-6B is adequately funded under the
requests that are before us, and are you working with the other
services to determine what funding is necessary for a follow-on
to the EA-6B's to perform this mission?
Mr. England. Well, Senator Stevens, again with your
permission I would like to defer that to Admiral Clark. I just
frankly have not been on board long enough to know that detail.
Admiral?
Admiral Clark. I would be happy to, Senator. This is a
critical capability for our military and you are right on the
mark, of course, as always. We are providing this capability
for the entire military. There are Air Force pilots that do fly
as part of the expeditionary squadrons.
Now, having said that, there is an analysis of alternatives
going on at this time and so regarding decisions that have been
made and so forth, there are no decisions yet. That analysis is
continuing. That analysis is addressing what the follow-on to
the EA-6B should be, what platform should it be in and so
forth.
There is an additional issue with regard to the program and
that is the modernization that is required for EA-6B, because
the threat continues to improve and so this kind of capability
we must continue to invest in. The current program has a
funding line for something called improved capability (ICAP-
III). This is an essential capability that I am now building
that is very high on my priority list.
The discussion about what shape this will take in the
future cannot be addressed until we figure out where the
analysis of alternatives takes us. They are looking at a number
of issues. I will just--this is Vern Clark's view about naval
aviation and the costs of operations. Secretary England made
the point earlier as a broad statement, not applied to this
program, as a broad statement--in my opening statement I talked
about the operation and the support costs spiraling.
The age of my air force is such, over 18 years average age
of the naval air force, it is such that the cost of operating
it and maintaining it is spiraling. I want to look ahead and
get us postured on a footing that is going to provide us the
replacement for EA-6B as soon as we can move to it. At that
point in time we need to work with the Air Force and see what
the right solution is for them in the future, whether we should
continue to have this capability as a Navy-only capability or
they should embed this in their expeditionary wings that they
now have built and put together.
So that is a question that we must deal with. I have had
discussions with Mike Ryan about that, but we do not have--we
are not at a point that we can craft the way ahead.
The second part of your question is is it adequately
funded. There is not--since we do not know what the solution
is, there are no funds for follow-on aircraft in the program.
There is funding for this necessary modernization that I talked
about, ICAP-III, in the program. This kind of capability,
whatever the analysis of alternatives shows us, this kind of
capability will of course have to deliver with the capability
that will allow us to defeat the threat.
Senator Stevens. I think what I am getting at, are we
spending money now on converting EA-6B when we ought to be
spending money developing a new platform?
Admiral Clark. The answer is yes to both questions. We are
spending money to develop the follow-on improved mission
capability within the airplane and we are also spending money
on the development of the future platform, just the analysis of
alternatives.
Senator Stevens. Very well. Thank you. We may have to visit
further on that, Mr. Chairman. I apologize for taking so much
time right now, but I would like to be excused after this
question. I have to meet with Senator Byrd about the
supplemental.

VIEQUES

But I would be remiss if I did not ask both the Secretary
and Admiral Clark concerning the Vieques problem. Secretary
England, we put $40 million in the current year's supplemental
to implement the agreement reached by President Clinton on
Vieques. Have those funds been obligated, do you know, and is
the remainder, if there is a remainder, can it help deal with
the problem that now exists because of the change in policy?
Mr. England. Sir, $5 million has been obligated for direct
execution by the Navy. We have obligated $1 million for
apprenticeship programs in Vieques and $4 million for what we
call the mini-grant program, that is small sums of money,
$25,000, $50,000, for businesses to expand their business. That
money has not all been spent. It has been obligated.
We have also transferred $3 million to other agencies,
namely $1.6 million to Health and Human Services for various
health studies associated with the island and $1.4 million to
the Department of the Interior, and that was for management of
the conservation zones on the island. So $5 million obligated
in addition to another $3 million that has been transferred.
That $3 million I believe has basically been spent. The $5
million has not all been spent, but some has been obligated.
Regarding the remainder, because it was up to $40 million,
at this point I would certainly like to retain the $40 million
until this whole matter comes to a conclusion. So I would like
to have the flexibility as we go forward to deal with any
issues that may come up as we work to resolve this issue.
Senator Stevens. Admiral Clark, you have in the Pacific
Fleet a comparable facility, right?
Admiral Clark. Well, it is not comparable in the pure
technical sense, but we do train and develop our battle groups
with the same objective in mind in both fleets, but with
different capabilities. For example--and I mentioned we just
had a battle group, the Carl Vinson, just completed this
operation and I talked to the battle group commander yesterday.
Off the coast, the West Coast of the United States, you
have got San Clemente, you have got Camp Pendleton right there,
and you have got ranges within reach of the battle group and
the amphibious ready group as it is working up. So it can
operate from one geographic location, and I do not mean a fixed
point in the ocean, but I mean within the footprint that a
group, a carrier battle group and an amphibious ready group
occupy when they are operating together at sea.
They can reach all of these sites and fundamentally they
integrate their operations that way from one general position.
On the Atlantic side you cannot do that. The reason Vieques
had such appeal to us is that it was the only site that we had
the air space where we could do the Marine integration, do the
aviation integration, and the Navy surface fire support all in
one location. Again, one general area called Vieques.
The other available sites to us are hundreds of miles away,
so that you cannot do that kind of integration, operating--we
have used when Vieques was not available to us Eglin Air Force
Base, we have used sites in Florida and sites off the coast of
Carolina. So while we can integrate the operations in
California, it is at different sites that are all within reach.
When you are in the southern California operating area, you are
a matter of a dozen or so miles from San Clemente and Camp
Pendleton and so forth. So you can reach it all and still be
integrated even though you are using different sites.
So the Vieques site just puts those all in one place. We do
not have such a way to integrate it in other places on the
Atlantic side.
Senator Stevens. Thank you very much.
Gentlemen, former Admiral Roof has just announced a new
concept of ocean wilderness areas. Having been deeply involved
in the extension of our jurisdiction over the water column
beyond our traditional limits of 3 miles and understanding, the
way I understand the proposal the Admiral is coming forward
with, it is a concept of determination of areas off our shores
where the wilderness concept will be applied.
I urge you to start studying how that will impact our Navy
and our Marine operations and particularly in terms of training
and our ability to defend our Nation. Beyond that, I would hope
that some of your lawyers would teach Admiral Roof a little bit
of admiralty law. We did not claim jurisdiction over the ocean
in terms of the surface. We do not exclude foreign ships from
our zone beyond 3 miles. We protect the creatures of the sea in
order to assure their reproductivity, but we have not made a
national claim beyond 3 miles to my knowledge to the extent of
excluding vessels from navigation.
I think we are headed for a real battle up here over this
proposal as I understand it and I would hope the Navy will be
prepared to, as they did during the Law of the Sea discussions
that I participated in some 30 years ago, be prepared to take a
role for our Nation in preserving our ability to utilize the
areas off our shore for our own defense.
Thank you very much, General and Mr. Secretary and Admiral.
I hope you will excuse me, Mr. Chairman, and I apologize for
taking too much time.
Senator Inouye. Senator Cochran.

DD-21

Senator Cochran. Thank you, Mr. Chairman.
The chairman asked questions about the DD-21 program. I
noticed in General Jones' prepared statement there is a comment
about the importance of Navy precision fires being an essential
dimension of the capabilities of the Marine Corps on pages 13
and 14. I was curious as to whether or not, General Jones, you
would have an opinion about what the loss of the DD-21 would
mean in terms of impact on naval gunfire support for the Marine
Corps?
General Jones. Senator, thank you for that question. The
fact is that one of the serious shortfalls in our warfighting
capability as we pursue the land campaign is in the field of
fire support, both land-based and sea-based, as contrasted to
say 20 or 30 years ago, in the 20th century. The Marine Corps
had a healthy, very healthy and robust shore-based artillery
fire support system, which over the years we attempted to
modernize, but what we really wound up doing was virtually
scrapping it, to where we have one field artillery piece left
called the M-198, which is not a bad field artillery weapon,
but certainly not very expeditionary.
So the Lightweight 155 is a very important program for us.
Furthermore, at sea we also scrapped most of our shore
bombardment capability. I do not need to remind you of the
debates we have had over the last 20 years on the activation
and deactivation of battleships and the like, all for very,
very good reasons.
The transformational aspect of what the Navy precision
fires program is is really important. It is not only important
to the Marines, it is important to the joint warfighters. If
you look at the likelihood of prosecution of the Nation's
future battles, it will probably be in the littorals. As far as
we can see, certainly those are going to be the flash points of
the future. Having a transformational precision fire capability
allows you to deliver ordnance at much greater range with
greater precision, so that those units that are out there,
which will probably be smaller but much more lethal and much
more effective than they were in the 20th century, because we
will depend on speed, mobility, lethality, stealth, and
sustainability for those forces, but they will only survive if
they have the robust backup of systems like those provided by
the DD-21.
So the DD-21 is a very, very important program for the Navy
and very important for the Marines.
Senator Cochran. In your response you mentioned the 155
millimeter howitzer, the Lightweight Howitzer. As I understand
it from your statement also on page 12, you say it will make a
major impact on improving outdated artillery capability. Can
you tell us the status is of that program and what the
committee could do to support the development of this system?
General Jones. Yes, sir. The Lightweight 155 has a lot of
technology built into it. For example, it is about 6,500 pounds
lighter than the M-198, which it is going to replace. It is a
joint program. The Army is very actively involved in this with
us, so it has tremendous support. As recently as 3 weeks ago,
we had the successful shoot of the second gun at Aberdeen. The
first gun has been a success.
So there are some minor problems, developmental problems
with the sighting system, for example, but these are not show-
stoppers. These are problems that you have with new technology
that we will overcome. I would characterize the program as not
only being extremely important, but one of the programs that
appears to be on track, and would recommend and appreciate your
support.
Senator Cochran. Thank you very much.
General Jones. Thank you, sir.

MODERNIZATION PROGRAMS

Senator Cochran. Admiral Clark, you mentioned the Navy's
modernization programs. One of the events that occurred in our
State was the repair of the U.S.S. Cole--I mentioned that in my
opening statement. One need that was highlighted by that
experience was the lack of an offloading facility for
ammunition at that naval station. I am told that the
requirement now is if you want to offload ammunition you have
to go to Yorktown, Virginia. That is a 10-day round trip.
Would it make sense for us to put a weapons loading wharf
at Pascagoula to reduce time away from home port and also have
a more efficient naval station at Pascagoula?
Admiral Clark. Senator, I remember the days of U.S.S. Cole
and tracking her across the ocean and watching her inch by inch
on my chart, and the issue coming up of the ordnance issue.
There is no doubt about it that it would be a lot more
convenient if we had the capability to do that in Pascagoula.
The discussions with the staff inform me that there are
certification issues in Pascagoula that have to do with
explosive arcs and so forth. That said, this is a capability
that needs to be examined and see what those roadblocks might
be and then evaluate, given the number of ships that we have in
Pascagoula, the best way to meet this requirement from a cost
effectiveness point of view.
But fundamentally, if we had such a capability it certainly
would be better.

MISSILE DEFENSE

Senator Cochran. In the discussion of the challenges of the
future, the Navy is involved in missile defense activities. You
have the Navy Theater Wide Program. You also have had in recent
days an announcement by one of your officers, Rear Admiral
Remp, that the Navy could provide a boost phase missile defense
system in about 1 year for less than $200 million, according to
one news report. I do not know how accurate that report was.
Could you tell us what you see as the capability of the
Navy in terms of development and early deployment of missile
defense systems?
Admiral Clark. I would be happy to, Senator. Thank you for
the question. In the first 11 months that I have been CNO, I
have been looking at this program carefully, especially in
light of the announcements made by the President and Secretary
Rumsfeld about the investments that they intend to make in
missile defense. My position on this has been that we need to
prove the capability that we have been investing in.
We have had wonderful support from the Congress in helping
us try to extract the utility that is available in Aegis to
give us a near-term capability. We are committed to the
development of the area capability first and foremost, I think
for very obvious reasons. I talked in my opening statement
about what the defense reviews and the QDR is going to come
down to.
What are they going to say when this whole process is over?
I am convinced, and not speaking for what the documents are
going to say, the way I see the world, I see a world where for
us to rely on host nation support for the future entails risk
that we want to have a hedge against. That hedge comes from our
ability to operate in the domains that I call the international
space, that is the maritime zones and space itself.
I cannot imagine any solution other than a very strong
Navy-Marine Corps capability that will allow us, without being
encumbered by sovereignty issues, will allow this Nation and
the President of this Nation to have options to be able to put
military capability, combat-credible capability, into points
where we need to influence events.
In order for us to be there--and as the threat develops, we
are going to need the capability to defeat the kind of
adversary with improved technology on the part of potential
enemies. We are going to need area capability first.
The second thing becomes clear, that if we cannot continue
to develop--and this is a development issue; clearly we do not
have it. But to take on boost issues, boost capability, with
our existing systems and develop the capability and prove that
we can hit the target. The boost part of it is not significant,
and in an unclass hearing we probably should not go a lot
further than this. But I believe that those two capabilities we
should be investing in and see where that takes us.
There are follow-on issues that, if you wanted to go to
next level kinds of capabilities, you would need to make other
kinds of investments and potentially could lead to different
size and shape missiles and so forth. But the kind of
capability I am talking about is extracting utility out of and
investing in the advancements within the current system that we
have and taking it as far as we can and as rapidly as we can.
So for us that becomes theater-wide capability, but area
first.
Senator Cochran. The question of funding comes up with
respect to the adequacy of the budget. I know the Air Force,
for example, thought that it had such a major stake in airborne
laser technology that it went on and put funds for the
development of that program in its own budget. It was not
funded through the Ballistic Missile Defense Organization
(BMDO). Would the Navy be willing to or have you up to this
point considered funding some of these activities through your
own budget and not waiting for funding through BMDO?
Admiral Clark. Well, Senator, I cannot answer this question
for budgets past because I was not here. But I am on record as
stating that--we are currently operating under seeking to
achieve a force level and structure that was specified in the
1997 QDR. I am on record as saying that I was somewhere in the
neighborhood of $13 billion short a year in being able to
sustain that force, with the issues that we have already raised
with regard to recapitalization of our aircraft capability and
ship capability.
I am convinced that what we see here is that as the funding
migrated to BMDO, with the other financial pressures that
exist, it is seriously inhibiting our ability to recapitalize
and modernize. It is very difficult to have BMDO funding this
and then fund it out of Navy programs.
I would then say that the 2002 deliberations, of course,
are going on and I cannot speak to how that is going to come
out. I am building, doing the groundwork for the building of
the first budget that I will send forward as the CNO in the
2003 Program Objective Memorandum (POM). It certainly is
something that will be considered, given what happens, as the
2002 budget proposal is sent forward. I can speculate about the
importance of it, but I also have to be honest with you and
direct and say, given the shortfalls that exist, it is
difficult to do that while BMDO is funding investment in this
area and then looking at the other shortfalls that I have
addressed that are complicating that problem.
Senator Cochran. Thank you very much.
Thank you, Mr. Chairman.
Senator Inouye. Thank you.
Senator Bond.

READINESS

Senator Bond. Thank you very much, Mr. Chairman. I am
delighted to join you, Senator Stevens and others in welcoming
Secretary England, a fellow Missourian General Jones, and the
Admiral, who is a very fine graduate of one of our proud
institutions, Evangel College in Springfield, Missouri.
Gentlemen, I am very much concerned about the readiness
status of our military and I would like to address a question
first to General Jones and then to Admiral Clark. I understand
that the current defense supplemental request addresses the
most pressing readiness needs of the Marines and the Navy, and
these are items that have to be done in order to avoid stopping
operations in many areas.
But I believe, and I would like to have you give me an idea
of some of the additional unfunded requirements that you will
be forced to address through reprogramming readiness and/or
modernization funds for fiscal year 2001. What are your needs,
General Jones?
General Jones. Well, sir, what we actually received was an
ability to cover our most pressing bills and our most
unforeseen must-pay bills, primarily those bills which were
externally driven, like increases to military pay and
entitlements, health care, utilities, flying hours, and the
like.
There was also some force protection issues that had to be
funded. Thus far, we have avoided, thus far avoided, curtailing
operations by deferring doing what we normally do to pay for
these requirements, and that is the maintenance of our
infrastructure, to pay utility bills and the procurement of
ground equipment in the event we were forced to absorb these
bills.
Basically, our shortfall, though, was about $27 million--
$21 million in military personnel accounts and $6 million in
operations and maintenance, for things like pay raises for our
information technology civilian personnel, a reduction in
Government of Japan burden-sharing, some collateral equipment,
and this is really the range of the impact that we are going to
have to figure out some reprogramming actions to cover those
requirements to get us through 2001 with the hope and the
expectation that we can remedy these problems in the first
quarter of 2002, recognizing that it is a hope.
Senator Bond. Those are not covered in the supplemental?
General Jones. Correct.
Senator Bond. Admiral Clark.
Admiral Clark. My fundamental area is similar to General
Jones'. The reprogramming request will address issues in
manpower primarily. I mentioned in my opening statement that we
are making progress in the war for people. I talked about the
battle groups that are getting ready to deploy. The last two
that we have deployed, Senator, are in better manning condition
than any we have sent out of here in a dozen years. This is
good news.
In the process, I am retaining more people and our
combination of recruiting and retaining is that we are slightly
overexecuted. By that I mean that we have an end strength, but
then you program what level of that end strength you are going
to have on board at certain times in the year based upon past
track history. We are doing better than that. So these are the
areas that we need to fix with the programming actions.
The other area that I would just address--and by the way,
the manner in which this was sent forward was to address the
areas that were absolutely critical and vital to us continuing
operations for 2001 and push what things could be sent into
2002, the plan is to push that forward in 2002. Of course, that
is still, that is all being worked in the Office of the
Secretary of Defense (OSD).
But the other area that I would talk about is in the area
of real property maintenance. I also mentioned that in my
opening statement. This is the quality of life, quality of work
thing. This is the easiest account to cut. It has always been
this way. It has been this way since I have been in the Navy.
I am concerned about this because we have to turn this
around.

F/A-18E/F

Senator Bond. We are, too, and we look forward to working
with the chairman to see what relief we can provide and how we
can best provide it.
Admiral Clark, I was disappointed to see the numbers of
appropriated F/A-18E/F Super Hornets reduced in fiscal year
2001. I understand you may also reduce the quantity provided in
the 2002 budget. Based on the requirements to replace legacy
carrier aircraft, I hope that you would reinstate the number of
Super Hornets at the appropriate time in an effort to execute
fully the approved multi-year agreement, in which the
government gets the best buy, the best deal.
What are the Navy's plans for executing the multi-year plan
for the Super Hornet?
Admiral Clark. Well, again the 2002 budget amendment is
being worked, and let me just talk about what this CNO would
like to see. Secretary England alluded to the fact that he
would like to see JSF come on line quicker. Well, I want
every--we need to maximize our investment in the aviation
accounts. I see us in this--we have this balance that we are
trying to work here. We have got to maintain the current
readiness of our force because we are deployed and we are out
on point, and on the other side we have got to try to modernize
this force.
Senator, this dichotomy is causing--and again, this force
is 18 years old now on average. We have got to accelerate the
retirement of these older aircraft that are costing so much to
keep operating. I believe that the path out of that is to
maximize our investment in the replacement accounts and to do
that as rapidly as possible. So where I would like to be is
that I want to be at the top end of that multi-year. We have to
figure out how to get there. That is my objective. I want to be
on the record that the way out of this is to accelerate our way
out of it with the procurement of new aircraft that give us the
reliability and maintainability that we need, so that we are
not being eaten alive with spiraling operational support costs,
which is about 15 percent a year over the last 4 years.
Senator Bond. Keep that in your thoughts and prayers as you
work on 2002.
Admiral Clark. Yes, sir.
Senator Bond. Thank you.
Admiral Clark. Secretary England, did you want to comment
on that?
Mr. England. Senator, we will honor the multi-year and we
will definitely buy sufficient quantities to maintain that
multi-year in the F-18E/F program. So while we do not know
specifically what that quantity will be next year, it will
definitely be within the range that was negotiated to maintain
that multi-year.

PILOT TRAINING

Senator Bond. Thank you, sir.
A question maybe for Admiral Clark and maybe for the
Secretary as well. Obviously, pilot training is an important
part of supporting both the Navy and the Marine Corps
operational readiness. I am hearing that the Navy is cutting
back on the procurement of T-45 Goshawk training systems, which
could have a direct impact. What are your plans for continuing
to pursue the 234 T-45 aircraft that have been determined to be
the optimal number to meet the operational pilot training rate?
Admiral Clark. I have to go back and review the numbers for
you, Senator. If you would like, I will submit the details on
that for the record.
Senator Bond. We would appreciate that.
[The information follows:]

The 234 T-45C aircraft total represents the number required
to support the operational pilot training requirement until
fiscal year 2035. The Navy completed a study in December 2000
that analyzed options available to support the pilot training
rate through fiscal year 2035. These options included continued
procurement of T-45C aircraft, extension of the T-2 Buckeye
beyond which was previously envisioned, and follow-on trainer
aircraft new start research and development requirements. The
Navy is now conducting a prioritized review of programs as part
of its fiscal year 2003 budget submission process. A focal
point of this process will be a review of options available to
meet the pilot training requirement. Continued procurement of
the T-45C Goshawk training system will be among those options
reviewed.

Admiral Clark. I would say the principle has been that--
here we are again in this balance that I am talking about, and
that we are going to buy those aircraft, but we are going to
buy them at a rate at which we need to replace the existing
inventory, and that is a tradeoff decision that will have to be
examined again as we build our next budget.

AV-8B HARRIER

Senator Bond. One last question for General Jones and I
will submit additional questions for the record. Mr. Chairman,
I appreciate your indulgence.
General, the AV-8B Harrier is the mainstay for the close
air support for the Marines, and the requirement for conversion
of older models to the all-weather night attack variants as I
understand it remains a high priority. Has the requirement for
additional conversions changed and can we conclude that the
Marine Corps needs additional AV-8B's?
General Jones. The Marine Corps's AV-8B program is one of
the success stories of this past year, year and a half. A year
and a half ago, I was extremely concerned with the reliability,
maintainability, availability of parts, in fact the safety of
the program. I would like to take the opportunity, Senator, to
underscore the fact that Marine Corps aviation as a whole is
experiencing its safest year in recorded history this year,
knock on wood and hope it continues.
One of the reasons for that is that the AV-8B has had a
tremendous resurgence in capability, some of the program, the
program that you just referred to, but a true story of success
with partnership with industry and the operators on the flight
line. As a result, our pilots are averaging more than
approximately 20 hours of flying time on the AV-8B's. They are
flying safely, they are excited about their airplane. They have
confidence in it. It is a wonderful story and I am very
grateful to the CNO for his blue dollar support, that is what
we call it, to that very important program.
With regard to the upgrades, the upgrades that we have in
mind will allow the AV-8B to continue on into the future and to
let us transition, which is our ultimate goal, to transition to
the Joint Strike Fighter at an appropriate time. It is a very
exciting program.
Senator Bond. General, thank you very much. Thank you,
gentlemen. We appreciate the opportunity to hear your very good
information. Thank you.
Thank you, Mr. Chairman.

FUTENMA MARINE CORPS AIR STATION

Senator Inouye. Thank you.
Mr. Secretary, if Okinawa is to remain the headquarters of
the Third Marine Expeditionary Force, it would appear that our
relationship with the Okinawan prefectural government must
improve. An important part of this relationship is the future
of the Futenma Marine Corps Air Station. Can you tell us what
the status is at this time?
Mr. England. Can I have General Jones address that, please.
General Jones. Mr. Chairman, as you know, we have for some
years been in negotiations with the Government of Japan on the
future of our forces on the island of Okinawa. The facts are
that over the years the southern half of the island has become
very crowded and the space is available in the northern half of
the island. As a result of a series of agreements called
Special Action Committee on Okinawa (SACO) agreements, we have
entered into an agreement that at a point in time the air base
at Futenma would be returned to the host nation and the
prefecture of Okinawa in return for building adequate
facilities in the northern part and less inhabited part of the
island.
To date that is the sum and substance of the progress that
has been made, simply that agreement. We stand by to honor that
agreement at such time as the host nation desires to move ahead
with the implementation phase.
Senator Inouye. Is it not true, General, that we are
prepared to move, but the Okinawan government and the Japanese
government are still negotiating?
General Jones. That is correct, sir. We find ourselves in
the middle of intermurals many times between host nation
issues, between a prefecture and the host, and their
government. But I would like to say for the record that I know
of no military community anywhere that works harder to be a
good neighbor to the people that surround our bases and
stations, not here in the United States and not anywhere in the
world.
The fact that every small incident--and they have not all
been small--but every small incident is banner headlines by the
small but vocal opposition to our presence on the island makes
life there just a little bit more difficult for our commanders
than anywhere else in the world. But I would also underscore to
you that as a result of the support of the host nation that I
consider that the totality of our bases in Japan, to include
Iwakuni, Okinawa, and our base at Camp Fuji in Japan, to be the
Marine Corps' finest bases from the quality of life, from a
modernization standpoint, quality of work spaces. That is
reflected in the high number of reenlistments and extensions
and family stability and appreciation for life on the island.
That is a remarkable transformation over what it was during
my career, which started--my first visit to Okinawa was in 1967
and I have been there at least once every 10 years. As
Commandant, to be able to go back to the island and to see the
people to people projects, the cultural exchanges, the
educational projects that are vibrantly in force on the island,
to see for the first time ever a recent poll that showed that a
slim majority of the people on Okinawa actually favor a
continued presence of U.S. forces, is very, very heartwarming
and very I think great credit to our leaders and the Japanese
leaders and the government on the island, to work together to
try to achieve satisfactory outcome to this island that is very
geostrategically important to our future and the peaceful
future of the Asia Pacific Rim.
Senator Inouye. General, I am certain you know that I was
there last year, and I must join you in your conclusions, and
in so doing would like to congratulate you and the Corps for
the fine work you are doing there.
General Jones. Thank you, sir.
Senator Inouye. One of the conditions the prefectural
government has articulated is that they would like the set a
time limit of 15 years for the use of the Futenma replacement
facility. Can you live with that?
General Jones. Mr. Chairman, as you know, that is a matter
that, as they say in the vernacular, is beyond my pay grade.
This is a policy issue for our government and the Government of
Japan, and I am in the execute mode when that decision is made.
I would fall back on my statement that geostrategically our
base on Okinawa and our bases in that part of the world,
particularly with the emphasis that the current administration
is putting on Asia Pacific in our future from the standpoint of
our economy and our engagement strategy.
If we did not stay there, we would certainly have to
develop some sort of alternate basing at least in that region.
I might just add parenthetically, even though I have said it
earlier, that I think the future of our land bases as we know
them today might look considerably different in 15 or 20 years.
We need to constantly be engaged in not only developing our sea
basing capabilities, but, who knows, perhaps other alternative
bases in the region, including, inclusive of Okinawa, and maybe
even our own bases which might be underutilized, for example,
in Guam and places like that.

AMPHIBIOUS SEALIFT

Senator Inouye. Admiral, if I may ask a question. Two-
thirds of our Marine forces are in the Pacific area, one-third
in the Atlantic area. Yet the amphibious sealift availability
is just about 50-50. Can we not increase the sealift for the
Marines to about two-thirds?
Admiral Clark. As we have talked about on other occasions,
Mr. Chairman, and I committed to you that I was the guy about
challenging our assumptions and I intended to do that as we put
our program together for the future, I owe you an answer on the
question and the challenging of those assumptions.
My work to date leaves me--I am at this point in this
discussion, that the decisions on home porting in the past have
been made relative to the peacetime deployment posture that we
are in and that the larger proportion of the Marines in the
Pacific are basically about the fly-away groups that fall in on
the maritime preposition ships, and that changes the balance
between the Atlantic and the Pacific.
What I promised you as we go through the defense reviews
and the QDR and as I build the program for the future is that I
would analyze how and challenge every assumption about the way
this decision has been made. We are in the process of doing
that and I will report to you when I have those conclusions.

ADDITIONAL COMMITTEE QUESTIONS

Senator Inouye. Thank you very much, Admiral.
Like my colleagues, I have several questions I would like
to submit for your response, Mr. Secretary.
Mr. England. Yes, sir.
Senator Inouye. May I, on behalf of the committee, thank
you and your extraordinary team for the great work you have
done for our country.
Mr. England. Thank you, sir.
Senator Inouye. So once again we thank you for your
testimony today.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted to Gordon R. England

Questions Submitted by Senator Daniel K. Inouye

PRIOR YEAR SHIPBUILDING COST GROWTH

Question. Secretary England, the fiscal year 2001 Supplemental
Appropriations request includes $222 million for cost growth in the
shipbuilding account. This is in addition to $500 million in transfer
authority for increased shipbuilding costs that has already been used
in fiscal year 2001. We are told that the bill for cost growth in
fiscal year 2002 may be as high as $800 million. Mr. Secretary, we are
very concerned that cost overruns in the shipbuilding accounts may be
out of control. As a former businessman, what can you tell us about the
cause of these cost overruns and do you have a plan to get them under
control?
Answer. The funding required to complete construction of ships
currently under contract has increased significantly. SCN funding is
already insufficient to finance current force structure requirements
and prior year completion ``bills'' exacerbate the issue. Cost growth
on ship construction contracts erodes the confidence of Congress in our
estimating and budgeting process for future procurements. Many factors
have contributed to the cost growth of current ships under contract,
including: Low rate procurement of vendor material and Government
Furnished Equipment; Configuration changes; Budget reductions/
rescissions; Unanticipated challenges with the design and production of
lead ships; and Inflation and fiscal constraints.
All of these factors, but particularly fiscal constraints, cause
the Department to budget procurement programs tightly. The consequences
of these factors are that any cost growth or budget reduction causes
immediate execution issues. During times of robust ship construction,
the Ship Cost Adjustment (SCA) process would allow the Navy and
Congress to finance programs which were experiencing difficulty with
those that were performing well. Due to fiscal constraints, the SCA
process is no longer viable and does not fund program execution
shortfalls due to lack of assets.
To prevent further increases to the prior year completion funding
shortfall, the Department is pursuing the following corrective actions:
--Remedy the systemic issues within our control and provide incentive
for industry partners to do the same.
--Ensure that estimating and budgetary processes better reflect cost
risk of factors beyond our control, such as inflation.
The Navy's amended fiscal year 2002 President's budget requests
$800 million to address the near term issue. This prior year budget
request only addresses funding required to execute the prior year
programs during fiscal year 2002. The program execution consequences of
receiving funding below the request are very serious and are not in the
nation's interest.

JOINT STRIKE FIGHTER

Question. Secretary England, on the matter of the Joint Strike
Fighter, there have been press reports that a decision has been made to
go forward with the program. Is this true?
Answer. A formal decision regarding Joint Strike Fighter (JSF) has
not been made. The JSF program is currently in the Concept
Demonstration phase, with both Boeing and Lockheed Martin conducting
flight demonstrations of their Concept Demonstration Aircraft. A
Milestone II review will take place in the fall of 2001. Following a
successful Milestone II review decision by the Department of Defense,
the Engineering and Manufacturing Development contract will be awarded.
Question. Is JSF affordable for the Navy with your other priorities
of F-18E/F and the V-22 in Naval aviation?
Answer. Joint Strike Fighter, F/A-18E/F, and V-22 support our long-
term strategy to reduce the number of types and models of aircraft in
the active inventory. We need an affordable multi-mission force that
possesses improved mission flexibility, effectiveness, supportability,
and mobility. Each of these aircraft replaces aging legacy aircraft and
offers significantly improved supportability, cost of ownership and
warfighting capability.

V-22

Question. Mr. Secretary, when will the decision be made about the
long-term purchase plans for the V-22? Do you anticipate that much more
R&D must be completed before we move to full rate production of the
aircraft?
Answer. Currently, the Department of Navy is reviewing the program
to determine the way ahead for the V-22. The date for the V-22 full
rate production decision will be based on successful completion of
events as we proceed with the restructured development program. The
Navy does intend to continue to procure the aircraft under low-rate
initial production until a full rate production contract is awarded.
The fiscal year 2002 President's Budget will reflect the costs of
additional development.

COOPERATIVE ENGAGEMENT CAPABILITY

Question. Secretary England, the Navy and the Marine Corps are both
looking to improve their single integrated air picture but are
currently looking at different systems to enable this, how in the new
era of interoperability will this be overcome in joint operations?
Answer. A disciplined systems engineering process is underway to
develop and implement incremental and systemic improvements to command
and control architectures of existing service weapon systems, enabling
joint operations while evolving to a true Single Integrated Air Picture
(SIAP). Navy efforts also are being coordinated with the Department of
Defense SIAP System Engineer. A case in point is the Navy development
of Cooperative Engagement Capability (CEC) which has been tested and
demonstrated to provide a solid foundation for SIAP with ships,
aircraft and land-based Marine Corps units. The Marine Corps has
approved an Operational Requirements Document that includes a CEC
capability, and has programmed funding to procure CEC systems.
Additionally, the Marine Corps is adapting components of the Navy CEC
system to land applications. Through the common use of CEC, the Navy
and Marine Corps will have jointly taken a major step toward an
integrated air picture. The long range engineering challenge is to
provide a coherent tactical picture of the theater-wide battlespace for
use by joint operating forces. It is expected that as CEC evolves,
other joint systems may also be outfitted with CEC.
______

Questions Submitted by Senator Arlen Specter

Question. The Washington Post recently reported on Secretary

Rumsfeld's emphasis on more flexible, rapidly deployable forces. The
FastShip project involves the use of Maritime Administration Title XI
loan guarantees to finance the construction of four 38-knot, U.S.-flag,
roll-on/roll-off, commercial cargo ships. Each of these ships is
capable of transporting 300 helicopters to the Persian Gulf in less
than 11 days and of carrying 10,000 tons of military cargo over about
5,000 nautical miles at a speed of 36 knots without refueling. Would
the availability of such a fast sealift vessel be consistent with
Secretary Rumsfeld's new emphasis?
Answer. The Navy has been following the progress of the FastShip
project for several years. Several Navy-sponsored studies and analyses
show that a FastShip vessel, when modified with appropriate National
Defense Features, can become a very useful sealift asset. In this
manner, a FastShip vessel which normally operates in commercial
service, becomes an ``active'' Ready Reserve Force asset providing high
speed sealift at a much lower cost than maintaining such a ship in the
Navy's organic sealift fleet. It should be noted, however, that no
funds have been requested in the Navy's fiscal year 2002 budget
submission because the FastShip or other comparable projects have not
yet progressed beyond the project stage.
Question. In 2002 the contract to host the Army-Navy football game
will be renegotiated for the following 10 years. Philadelphia is the
traditional home for this great contest and is centrally located
between the two academies with superior transportation infrastructure,
hotel accommodations, tourist attractions and a new football stadium
under construction. Who will make the decision and what criteria will
be used to award the contract?
Answer. Contract decisions regarding future hosting of Army-Navy
football games beyond 2003 will be made jointly by the Superintendents
of the Naval Academy and Military Academy. A Request for Proposal (RFP)
is being prepared by the Directors of Athletics of the two academies to
be submitted to both Superintendents for final approval. The RFP will
be sent to all interested cities/stadiums for their review and
potential bid. The RFP will include a request for all details
surrounding the game. It is intended that the RFP will be distributed
to potential bidders by early 2002, with final contract decisions to be
made by the end of 2002.
______

Questions Submitted by Senator Kay Bailey Hutchison

Question. Last week I noticed that Secretary Rumsfeld's review
panel on the transformation of conventional forces recommend
accelerating the Navy JSF program by two or three years in order to add
radar-evading stealth capabilities to our carrier decks.
What is your opinion on accelerating the Navy's JSF production and
how would this affect the current FA-18E/F requirement and numbers?
Answer. The Secretary of Defense is currently conducting a
comprehensive strategic review of the Department's near and long-term
requirements. The results from that review will be incorporated into
the Quadrennial Defense Review to provide the appropriate
prioritization of our programs to meet those requirements. The Joint
Strike Fighter (JSF) is an affordable and critical element of the
Navy's total force modernization plan. JSF is the first step in the
direction to develop airframes that could be used more commonly by each
of the services. The carrier variant promises both stealth and standoff
precision-guided weapon technology that will complement the F/A-18E/F
Super Hornet.
Accelerating the pace of Naval Aviation modernization is one of the
most challenging issues facing Navy leadership today. Initial
procurement of the Navy's JSF variant could be accelerated two years,
from fiscal year 2008 to fiscal year 2006, concurrent with initial
procurement of Air Force and Marine Corps variants. Additional
programmatic risk would be minimal, but availability of funding earlier
would be a major consideration. Accelerating initial JSF procurement to
earlier than fiscal year 2006 would increase concurrency and program
risk. Earlier procurement of the Navy JSF means that the Navy would
have to spend less on F/A-18C/D center barrel replacements and could
retire that legacy platform sooner.
In the interim, the Navy must ensure its current force is ready for
combat. Based on the Program of Record, F/A-18E/F requirements and
numbers would not change.
Question. The other service Secretaries have encouraged the
Congress to authorize another round of BRAC. Does the Navy and Marine
Corps support another round of BRAC? Has the Navy realized any cost
savings from the last rounds of BRAC?
Answer. I fully support the Secretary of Defense's efforts to
prepare a proposal for additional rounds of BRAC. Infrastructure is one
of the key components in the Quadrennial Defense Review now underway. I
expect the review to lead to an overall defense strategy, the requisite
force structure to meet that strategy, and an appropriately sized
infrastructure to support that force structure. The savings realized
would assist Navy in properly resourcing for readiness at sea and
properly maintaining the enduring infrastructure.
The Department of the Navy has achieved significant cost savings
from the four previous rounds of BRAC. The 1998 Report of the
Department of Defense on Base Realignment and Closure estimated net OSD
savings during BRAC implementation at approximately $14 billion through
2001 and recurring savings at $5.6 billion annually thereafter. Navy's
share for net implementation and recurring savings is $5.8 billion and
$2.6 billion respectively. OSD projects that the proposed Efficient
Facilities Initiative will save an additional $3.0 billion annually.
I would also add a word of caution.
While BRAC savings can be substantial, it can take one to four
years before the savings and cost avoidance are realized. BRAC is one
of many initiatives that will produce savings essential to enhancing
our maritime readiness.
Question. I am very concerned about the aging infrastructure of our
military posts. What is the shortfall of your Sustainment, Restoration
and Modernization (SRM) account for the Navy? Does the proposed
supplemental budget from DOD address those shortfalls adequately?
Answer. In developing future Program Objective Memorandums, we will
address our facilities requirements in terms of Sustainment,
Restoration, and Modernization as defined by the Department of
Defense's Facility Sustainment Model. Through fiscal year 2002, we have
used the maintenance backlog and asset preservation index (API) to
define these requirements. The Facility Sustainment Model will help us
better define a total facility investment strategy, via an asset
preservation strategy.
We need $136.6 million to arrest the growth of our critical
maintenance backlog and increase our API to comparable industry
standards in fiscal year 2001.
The proposed fiscal year 2001 supplemental appropriation was not
intended to address shortfalls in the Sustainment, Restoration, and
Modernization accounts.
Question. Admiral, the successes of several important Navy programs
are too often overlooked when ballistic missile defenses are debated.
Would you update us on the success of the Navy's theater missile
defense programs?
Answer. The Navy has two programs engaged in Missile Defense: Navy
Area Theater Ballistic Missile Defense (TBMD) and Navy Theater Wide
Ballistic Missile Defense.
Recent successes in the Navy Area TBMD Program include:
--Completed in-depth aero-thermal survivability program (wind tunnel,
shock tunnel, and sled testing) to verify survivability of
Block IVA infrared sapphire dome in April 2001.
--Executed procurement of long-lead material to support SM-2 Block
IVA low rate initial production in December 2000.
--Completed ground-based live-fire test and evaluation phase in
November 2000.
--Began land-based flight-testing, successfully completing two
controlled test vehicle flight tests at White Sands Missile
Range in June and August 2000.
Recent successes achieved in the Navy Theater Wide Ballistic
Missile Defense program include:
--Conducted high-range resolution and captive carry test bed work in
March 2001 as part of the Theater Critical Measurements
Program.
--Demonstrated ballistic missile warning, battle management, and
command, control and communications capabilities during Quick
Reaction Launch Vehicle mission in March 2001.
--Conducted the first ``full-up'' test of the Solid Divert Attitude
Control System (SDACS) in February 2001.
--Demonstrated third stage guidance, nosecone separation, kinetic
warhead (KW) seeker separation, and KW ejection during the SM-3
Aegis Leap Intercept flight test launched from U.S.S. LAKE ERIE
(CG-70) in January 2001.
--Completed the SDACS Engineering Evaluation in December 2000.
______

Questions Submitted to Admiral Vernon E. Clark

Questions Submitted by Senator Daniel K. Inouye

DD-21 LAND ATTACK DESTROYER

Question. Admiral Clark, the DD-21 has been billed as the ship of
the future for the Navy. We understand that the contract award for the
ship has been delayed as we await Secretary Rumsfeld's review and the
Quadrennial Defense Review (QDR) for answers.
Can you tell us, has a decision on the future of the DD-21 been
made?
Answer. Although no formal decision has been made on the future of
the DD-21 program, the Navy remains committed to the requirements
associated with this ship and the objectives of this program.
Question. Are you looking at other options?
Answer. While the objectives of the DD-21 program remain valid, the
Navy thinks it prudent to afford itself an opportunity to consider if a
change in program strategy is warranted based upon the outcome of the
respective defense strategy studies.
Question. Do you see a role in missile defense for the DD-21?
Answer. The Land Attack Destroyer (DD-21) Operational Requirements
Document does not mandate a missile defense requirement for DD-21, and
as such, DD-21 is not being designed for missile defense.
Missile defense is a transition technology that would be supported
by the DD-21 hull form and could be incorporated into a follow-on DD-21
flight or a future CG-21 class ship.
Question. Admiral Clark, does delaying DD-21 affect other
shipbuilding programs?
Answer. The decision to hold completion of DD-21 source selection
in abeyance pending the results of the defense strategy studies does
not affect other shipbuilding programs.

COOPERATIVE ENGAGEMENT CAPABILITY

Question. Admiral Clark, the Cooperative Engagement Capability
(CEC) is a much anticipated program that promises increased situational
awareness and better ship self-defense. However, as CEC finally enters
into production, the technology is 15 years-old. Is there any effort
within the Navy to take a ``fresh'' look at the program to ensure we
are buying the most capable and cost-effective system?
Answer. Cooperative Engagement Capability (CEC), as a sensor
network with integrated fire control, has capabilities beyond ship self
defense. It promises enhancements to all major air and missile defense
systems.
Although conceived 15 years ago, the technology of the CEC system,
which recently completed Operational Evaluation, is essentially state
of the art. The hardware has undergone several significant evolutions
since the first experimental systems were tested. The shipboard AN/USG-
1, which underwent operational testing at sea in 1994, weighed nearly
10,000 lbs. The current AN/USG-2 shipboard system weighs less than
3,000 lbs. including support equipment, while the AN/USG-3 aircraft
version is less than 700 lbs. Through the use of open architecture and
commercial off the shelf equipment, the system processors have been
improved steadily from the Motorola 68040 seven years ago to the
PowerPC RISC processor today. As with any warfighting system,
initiatives are ongoing to improve and expand CEC capabilities, and to
reduce the procurement and maintenance costs. Following are key efforts
in progress or being considered:
--Development of a Low Cost Planar Array (LCPA) antenna. The LCPA is
a 4 sided, flat faced array which will reduce antenna cost and
improve reliability. It will also enable several classes of
ships to operate with one antenna vice two for full 360 degree
coverage.
--Development of an enhanced communications capability for an
increased number of network nodes.
--Development of a next generation CEC for further reductions in size
and weight with potential new architecture changes.

AMPHIBIOUS SHIP STATIONING AND LIFT

Question. Admiral Clark, Naval amphibious shipping seems to be
nearly evenly divided between the Atlantic and Pacific fleet, although
both the First and Third Marine Expeditionary Forces are focused on the
Pacific and Asia. Why is there not a stronger commitment to amphibious
sealift in the Pacific fleet?
Answer. The Navy's 38 amphibious ships are distributed to support
the Unified Commanders' forward presence/peacetime engagement
amphibious lift requirements, as well as the response times for a Major
Theater War (MTW). Although shifting additional amphibious ships to the
Pacific may enhance that theater's lift capability, it would severely
impact support and response times to the Atlantic, Mediterranean, and
Caribbean theaters.
The Department of the Navy has a validated requirement for 3.0
Marine Expeditionary Brigades amphibious lift. The Marine Expeditionary
Brigade (MEB) is the smallest unit capable of forcible entry.
Currently, our active available amphibious lift is limited to 2.1,
respective to a fiscally constrained 2.5 MEB lift goal.
The Amphibious Ready Group (ARG) with an embarked Marine
Expeditionary Unit (MEU) is the cornerstone for the forward presence/
peacetime engagement mission. The MEU is also the leading element of an
Amphibious Task Force (ATF) embarked with a MEB. The MEU, MEB, and
contingency ATFs are drawn from any one of, or a combination of the
three Marine Expeditionary Forces (MEFs) located at Camp Lejeune, North
Carolina (II MEF), Camp Pendleton, California (I MEF) and Okinawa,
Japan (III MEF).
The forward positioning of III MEF and amphibious forces in Japan,
with follow-on forces deploying from San Diego, enables the Navy-Marine
Corps team to meet the Pacific MTW requirements. Third Marine Regiment,
the infantry regiment stationed on Hawaii, is a major subordinate
element of Third Marine Division located on Okinawa. In time of crisis,
this regiment will deploy to Okinawa by strategic air to link up with
their Division.
Accordingly, to meet the Unified Commanders' forward presence/
peacetime engagement amphibious lift requirements, as well as the DPG
response times for a MTW, the Navy homeports Amphibious Ships in
Norfolk, VA (17 ships), San Diego, CA (16 ships) and Sasebo, Japan (4
ships). The Navy also maintains several amphibious ships in a reduced
operating status in Hawaii, California, and Virginia.

NAVY SURFACE FIRE SUPPORT

Question. There is concern that the Navy seems to be backing away
from their Navy Surface Fire Support (NSFS) commitment. Although the
Cruiser Conversion Program (CCP) has remained intact, of the 22
cruisers in the original Program of Record scheduled to be back-fit
with land attack 5 inch 62 tubes, only 9 of these cruisers are
currently scheduled to receive them.
Is the Navy backing away from the littorals and NSFS?
Answer. No, the Navy is not backing away from the littorals or Navy
Surface Fire Support (NSFS). Quite the opposite is true. Our
cornerstone documents for Naval Operations, From the Sea and Forward .
. . From the Sea, reflect Navy's intention to operate in the littorals.
Development of NSFS systems are key to our ability to shape the
littoral battle space and win.
Question. What alternatives does the Navy have to satisfy Marine
Corps NSFS requirements if the DD-21 does not prove viable?
Answer. The Navy established a two-phased approach to satisfy the
Marine Corps' Navy Surface Fire Support (NSFS) requirements. In the
near-term, we are developing systems for installation on our Aegis-
equipped destroyers and cruisers. These systems include the Extended
Range Guided Munition, 5 inch/62 Mk 45 Mod 4 Gun, Land Attack Standard
Missile, Naval Fires Control System, and Naval Fires Network.
Collectively, these systems significantly improve the range, accuracy,
and responsiveness of NSFS. In the far-term, we are developing the
Advanced Gun System, Long Range Land Attack Projectile, and Advanced
Land Attack Missile for DD-21. The systems improve even further our
NSFS capability beyond our near-term efforts. These systems are only
part of what makes the DD-21 a viable platform for the 21st century and
fully answer Marine Corps' NSFS requirements.
______

Questions Submitted by Senator Christopher S. Bond

DEFENSE SUPPLEMENTAL

Question. We understand the current defense supplemental request
addresses the Navy and Marine Corps most pressing readiness needs. What
are some additional unfunded requirements that you will be forced to
address through reprogramming readiness and/or modernization funds for
fiscal year 2001?
Answer. In addition to the urgent needs being addressed in the
fiscal year 2001 budget supplemental now before Congress that are
beyond the Navy's ability to fund internally, we have submitted to the
Secretary of Defense a reprogramming request involving approximately
$286 million to address critical shortfalls based on unforeseen
requirements. Over 70 percent of the reprogramming request is for
military compensation associated with improved recruiting and
retention. The remainder of the unfunded requirements address support
to operating forces, information technology needs, cost overruns
related to closure of the Conventional Ammunition Working Capital Fund,
and urgent engineering and manufacturing associated with aviation
systems.
As proposed, almost all of the funds will use procurement accounts
as a source and will come from lower priority line items. Aircraft
Procurement, Navy will provide over 60 percent of the funding due to
delays and cost growth in the SH-60R that makes fiscal year 2001
production not executable.

F/A-18E/F

Question. I was disappointed to see the numbers of appropriated F/
A-18E/F super hornets reduced in fiscal year 2001, and I understand you
may also reduce the quantity in your fiscal year 2002 budget. Based on
the requirements to replace legacy carrier aircraft, I hope that you
would reinstate the numbers of super hornets at the appropriate time in
an effort to fully execute the approved multi-year agreement.
What are the Navy's plans for executing the approved multi-year
plan for the Superhornet?
Answer. The Navy has a requirement for 548 F/A-18E/F aircraft. Last
year the Navy entered into a multi-year contract for the production of
222 aircraft through fiscal year 2004. This contract provided
flexibility to increase or decrease aircraft quantity (+/-6 aircraft)
in fiscal year 2001 through fiscal year 2004 to meet emergent
requirements. Unfortunately, current economic price adjustments and
other unforeseen costs required the Navy to decrease procurement by
three aircraft in fiscal year 2001.
In the fiscal year 2002 amended budget, the Navy has increased F/A-
18E/F procurement by three aircraft from 45 to 48.

T-45

Question. Pilot training is an important part of supporting both
Navy and Marine Corps operational readiness. Indications are that the
Navy is cutting back on the procurement of the T-45 Goshawk training
systems, which will have a direct impact upon pilot training.
What are your plans for continuing to pursue the 234 T-45 aircraft
that have been determined to be the optimal number to meet the
operational pilot training rate?
Answer. The 234 T-45C aircraft total represents the number required
to support the operational pilot training requirement until fiscal year
2035. The Navy completed a study in December 2000 that analyzed options
available to support the pilot training rate through fiscal year 2035.
These options included continued procurement of T-45C aircraft,
extension of the T-2 Buckeye beyond which was previously envisioned,
and follow-on trainer aircraft new start research and development
requirements. The Navy is now conducting a prioritized review of
programs as part of its fiscal year 2003 budget submission process. A
focal point of this process will be a review of options available to
meet the pilot training requirement. Continued procurement of the T-45C
Goshawk training system will be among those options reviewed.

AV-8B

Question. The AV-8B Harrier is the mainstay for Marine close air
support. The requirement for the conversion of older models to the all-
weather night attack variants remains a high priority as explained to
Congress.
Has the requirement for additional conversions changed?
Answer. No.
Question. Can we conclude that the Marine Corps needs additional
AV-8Bs?
Answer. Yes. The current program will deliver the final
Remanufactured Radar/Night Attack Harrier in June 2003. At the end of
the current program there will be 14 less aircraft than required to
meet operational and training requirements. The Marine Corps has a
requirement for 14 additional remanufactured Harriers. This requirement
does not account for attrition.

F/A-18 G

Question. The DOD is currently conducting an airborne electronic
attack analysis of alternatives (AOA) study. My understanding is that
the purpose of the AOA is to determine the best platform or systems to
take over the electronic attack mission--a mission currently conducted
by the Navy and Marine Corps EA-6B Prowler. I also understand that the
services need to begin replacing the Prowler no later than 2010 due to
the advanced age and heavy operating tempo of these aircraft.
Upon completion of the AOA does the Navy have plans to conduct a
risk reduction effort prior to commencing a new development program?
Answer. The Navy currently has an EA-6B weapons system upgrade
program called Improved Capabilities Three (ICAP III) which will
achieve initial operational capability in early fiscal year 2005 and
will keep the EA-6B relevant until its planned retirement date in
fiscal year 2015. The ICAP III capabilities are the baseline for the
ongoing Analysis of Alternatives (AoA) and will serve as a significant
risk reduction tool as those capabilities are incorporated into a
follow-on platform. The majority of the platforms being considered to
host this electronic attack weapon system already exist or are in
development with a significant amount of risk reduction inherent in
each program. The combination of knowledge from the ICAP III system and
selected host platform will enable the abbreviation of risk reduction
requirements and rapid progression to the Electronic Attack Follow-on
Program.
Question. Is there funding in place to support such an effort?
Answer. Funding requirements are being considered as part of fiscal
year 2003 Program Review and Program Objective Memorandum build for
fiscal year 2004.
Question. What specific tasks are important to the Navy in reducing
the risk of a follow-on system?
Answer. Tasks important in reducing the risk of a follow-on system
include:
--Integration of a high power jamming system with existing host
platform systems (flight controls, avionics, navigation,
communication and weapons),
--Electromagnetic interference,
--Quantifying and understanding the shielding and blanking
requirements of system-to-platform integration, and
--Dynamic flight envelope exploration of the system/platform
combination.
______

Questions Submitted by Senator Kay Bailey Hutchison

TRAINING RANGES

Question. I understand the Navy is looking at different options to
replace the Vieques training range; however, I am concerned about the
quality of training our deploying units will be able to conduct until a
new site is found. During the next two years, will the Navy and Marine
Corps be able to conduct the full range of training exercises required
at Vieques to send our personnel in harm's way? What other ranges are
being used to make up for the limitations placed on Vieques operations?
Answer. Over the next two years, Atlantic Fleet's naval forces
intend to use Vieques as we are today. When Vieques is unavailable,
Atlantic Fleet's naval forces conduct limited live fire training at
other ranges; however, the training opportunities are less than optimal
for completing invaluable integrated battle group training. For
example, air-to-ground bombing with live ordnance can be conducted at
Eglin and Pinecastle ranges in Florida, but those ranges cannot support
combined arms exercises from the sea. They also have altitude and
maneuvering restrictions that result in diminished realism. Amphibious
operations and ground maneuvers can be conducted at Camp Lejuene and
Onslow Bay, but those locations cannot support Naval Surface Fire
Support or combined Naval Force exercises across the full range of
mission areas.

T-45

Question. I read a study the Navy completed last November
concerning Training aircraft requirements. It showed that there was a
shortfall in T-45 training aircraft and recommended continuing to build
the T-45C and upgrading the older T-45's to the glass cockpit
configuration.
What are the Navy's intentions concerning T-45 production and
upgrades? Is the age of the T-2 negatively affecting its readiness and
quality of student training?
Answer. The Navy completed a strike training aircraft requirement
study in November 2000 that analyzed options available to meet the
strike pilot training requirement through fiscal year 2035. Options the
study analyzed included: continued procurement of T-45C aircraft,
extension of the T-2 Buckeye beyond which was previously envisioned,
and follow-on trainer aircraft new start research and development
requirements. The training aircraft study will be used as a planning
tool for Navy's future budget submission process. Continued T-45C
procurement and the upgrade of the T-45A analog cockpit to the T-45C
digital configuration will be reviewed during future budget process.
The age of the T-2 is currently not affecting the readiness or
quality of student training. The T-2 continues to meet aircraft ready-
for-training goals. As with many aging systems, T-2C parts obsolescence
and supportability for out of production items will become increasingly
difficult in the future. The Navy will continue to assess this and
review all factors to continue to meet the strike pilot training
requirement. The quality of pilot training is not being affected, nor
will it be compromised. Navy continues to produce the finest Naval
Aviators in the world at both NAS Kingsville, Texas where student
pilots fly the T-45A and in NAS Meridian, Mississippi where students
fly both the T-2C and the T-45C.
Since Texas is the Headquarters for Naval Mine Warfare, I take
special interest in ensuring that this often overlooked fleet obtains
the resources it requires.
Question. What is the plan to replace the U.S.S. INCHON?
Answer. U.S.S. INCHON is approaching the end of its service life.
The Navy plans to decommission INCHON around 2005, however the exact
plan will be reviewed as a part of the Program Review for 2003. In
order to understand all options, a study to determine the approximate
cost of extending U.S.S. INCHON's service life is underway, and should
be completed in December of 2001.
Another study to evaluate the particular future requirement for a
follow-on MCS ship is being done. This study, to be completed in the
fall, will identify both requirements and options for replacing U.S.S.
INCHON.
Question. Do you anticipate changes to the Mine Sweeper basing/
deployment plan?
Answer. No changes to the Navy's Mine Sweeper basing/deployment
plans are anticipated.

RETENTION

Question. I'm happy that the Navy appears to be meeting its
recruiting goals, however, I understand that Non Commissioned Officer
(NCO) retention remains a concern.
What is the Navy doing to retain these experienced technicians and
managers? What is the current retention status of Aviation and SEAL
junior officers?
Answer. The Navy has developed long-range reenlistment goals that
reflect our vision to mold the force profile to support and sustain a
75.5 percent top six pay grade Enlisted Program Authorization (EPA)
requirement which reflects anticipated manpower needs based on future
technology and weapons platforms.

NAVY ENLISTED REENLISTMENT RATES
[In percent]
----------------------------------------------------------------------------------------------------------------
Zone A (<6 Zone B (6-10 Zone C (10-14
FYTD (Oct-May) years) years) years)
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999................................................... 47.1 60.4 83.1
Fiscal year 2000................................................... 51.3 62.6 83.2
Fiscal year 2001................................................... 59.6 67.6 84.2
Long-range Goal.................................................... 57 69 89
----------------------------------------------------------------------------------------------------------------

While shy of long-range goals, fiscal year 2001 reenlistment rates
for mid-career (Zone B) and career (Zone C) non-commissioned officers
(NCOs) have shown steady improvement over the same time period in the
past two years. To combat aggregate enlisted personnel shortfalls, and
as a long-term solution, we have focused significant retention efforts
on Sailors in Zone A, resulting in significant improvement in Zone A
reenlistments. To counter specific skill shortfalls, we maintain a
robust Selective Reenlistment Bonus (SRB) program that has helped
retain Sailors with high demand skills in the near term.
Ultimately, as we continue building on enlisted retention successes
of the last two years, we must increase the number of mid-career and
career NCO reenlistments for third (and subsequent) tours.
SEAL officers are being retained at 60 percent against a
requirement of 74 percent. Enactment and implementation of Special
Warfare Officer Continuation Pay, as well as other compensation
enhancements in the National Defense Authorization Acts of the past two
years, coupled with Navy Special Warfare and Navy-wide quality of
service initiatives have had a positive impact on SEAL retention
efforts.
Through the third quarter of fiscal year 2001, aggregate aviator
retention is at 38 percent against a requirement of 42 percent. The
fiscal year 2001 aviation bonus program has contributed significantly
to maintaining retention rates above the all time low of 31 percent
experienced in fiscal year 1999.
______

Questions Submitted to General James L. Jones

Questions Submitted by Senator Daniel K. Inouye

JOINT STRIKE FIGHTER

Question. General Jones, would you comment on the importance of the
JSF to the Marine Corps?
Answer. The Joint Strike Fighter is the future of Marine Corps
TACAIR. As this nation's premier expeditionary force, the Marine Corps
routinely depends on its tactical air forces to contribute a
significant portion of the firepower needed to succeed on the modern
battlefield. JSF, with its combination of lethality, stealth, and
operational flexibility offers exactly what the Marine Air Ground Task
Force (MAGTF) Commander needs. By the time JSF arrives in 2010, the
need will have become critical. Over the next decade, the Corps' fleet
of F/A-18's and AV-8's will approach or exceed the end of their service
life while cost of ownership will increase dramatically and issues of
operational obsolescence will emerge in the face of ever more lethal
threats. Keeping JSF on track is key to maintaining the Marine Corps'
well-deserved credential as the CINC's joint warfighting force of
choice.

V-22

Question. General Jones, the recent--and tragic--problems that have
occurred in the V-22 programs may have undermined confidence in the
aircraft. Will you describe for us the path ahead for the V-22 program
that will rebuild confidence in the aircraft and solve these problems?
Answer. Currently the V-22 Program is being restructured based upon
recommendations from the Panel to Review the V-22 Program and
acquisition leadership. The planned ``Way Ahead'' for the V-22 is a
safe, conservative, event driven plan. Naval Air Systems Command is
detailing this conservative path to return to flight. It is predicated
on corrections of known deficiencies supported by an independent
technical assessment of designs and processes to minimize additional
unknowns. The redesigns will be fully assessed by Developmental Test
followed by an Operational suitability assessment.
The return to full flight operations and the plan to restore
confidence in the V-22 is based upon the following five phases:
Phase 0.--Commence Technical Assessment and Complete Rigorous
Flight Readiness Review.
Phase 1.--Resume Testing with EMD (MV and CV) Aircraft--Augment
with LRIP Aircraft as Necessary.
Phase 2.--Resume VMMT 204 Training Operations and Production
Acceptance Flights.
Phase 3.--Stand-up MV-22 Fleet Squadron/CV-22 Training Squadron at
Kirtland AFB.
Phase 4.--Deploy First MV-22 Squadron/CV-22 Operational Employment.
We fully expect this will allow the Marine Corps to field a safe,
reliable combat assault aircraft for the 21st Century battlefield.
Question. General Jones, are you satisfied that the supplemental
request for more R&D funds for this program is sufficient?
Answer. The Marine Corps fully supports the V-22 restructure plan
as submitted by OSD in the fiscal year 2001 Supplemental Request. The
additional $80 million of RDTEN provided by this plan is considered
sufficient to execute the ``way ahead'' initiatives for the remainder
of this fiscal year and begin work on 2 CV-22 aircraft to meet SOCOM's
requirements.

AMPHIBIOUS SHIP STATIONING AND LIFT

Question. General Jones, does the Marine Corps require additional
amphibious shipping in general, and specifically in the Pacific
theater?
Answer. Naval amphibious ships combined with embarked Marines
provide forward presence and flexible crisis response forces for
employment in support of foreign policy objectives. These forces
provide the most formidable amphibious forcible entry capability in the
world. Amphibious lift requirements are formulated to support the
national military strategy, satisfy combat surge requirements, and can
also be tailored to meet real world day-to-day commitments.
The warfighting requirement, the capability the Marine Corps
strives to provide to our nation, remains at 3.0 Marine Expeditionary
Brigade Assault Echelons and equates to 14 Amphibious Ready Groups. The
requirement for an amphibious force structure plan that supports lift
for 3.0 Marine Expeditionary Brigade Assault Echelons, as stated in the
Department of the Navy's 1990 Integrated Amphibious Operations and USMC
Air Support Requirements Study, the 1992 Mobility Requirements Study,
and reemphasized in Congressional testimony and the Secretary of
Defense's 26 June 2000 Report On Naval Vessel Force Structure
Requirements, remains a priority requirement.
Fiscal constraints, however, have limited amphibious lift to a
programmatic goal of 2.5 Marine Expeditionary Brigade Assault Echelons
that equates to 12 Amphibious Ready Groups. This capability will be
achieved with active amphibious ship force structure upon delivery of
the twelfth LPD 17 class ship. In the meantime, maintaining LKAs and
LSTs in a reduced operating status called the Amphibious Lift
Enhancement Plan is a temporary fix meant to fill the gap between
today's shortfall and the delivery of the LPD 17 ship class. The
shortfall in active amphibious ships remains an area of concern.
Important to note is that the U.S. Navy is responsible for determining
the homeport of amphibious ships.

NAVY SURFACE FIRE SUPPORT

Question. Are you satisfied with the current Navy Surface Fire
Support (NSFS) capability? Are you satisfied with the Navy interim
plan, with regard to NSFS capabilities, of 9 cruisers and 27
destroyers? What impact would the cancellation of the DD-21 have on the
viability of the Marine Corps to execute its Expeditionary Maneuver
Warfare Concepts?
Answer. As the Navy/Marine Corps team continues to field our 21st
century expeditionary warfare capability, we re-affirm the critical
role of naval surface fires in the success of Expeditionary Maneuver
Warfare. It is important that we deploy a full spectrum of responsive,
lethal, and accurate naval weapon systems to complement the flexible
warfighting capability of our maneuver forces.
The Marine Corps has in the past, and continues today to support
the Navy's two-phased land attack weapons development approach for
meeting near- and far-term naval fires requirements for supporting
expeditionary operations. Near-term programs such as the 5 inch/62 gun,
Extended Range Guided Munitions and the Land Attack Standard Missile
will provide an enhanced naval surface fire support capability, but
will not meet all of the range and lethality requirements for
supporting the Marine Air Ground Task Force in expeditionary
operations. In the far-term, the 155 mm Advanced Gun System, with a
family of precision-guided and ballistic ammunition, and the Advanced
Land Attack Missile, with a family of general use and specialty
warheads, will meet these requirements. Both the Advanced Gun System
and the Advanced Land Attack Missile are systems designed for the DD-21
class of ships.
The capabilities provided by the DD-21 and its associated systems
remain vital to realizing the full potential of Expeditionary Maneuver
Warfare and the conduct of expeditionary operations and sustained
operations ashore in a fluid, non-linear battle space.
______

Questions Submitted by Senator Thad Cochran

Question. General Jones, I have been briefed that during the 1999
incident in East Timor the 3rd Marine Expeditionary Force did not have
sufficient amphibious assault lift capability to rapidly deploy from
Okinawa, Japan to Darwin, Australia. Do you have any concerns with the
existing strategic lift capability?
Answer. Naval amphibious ships combined with embarked Marines
provide forward presence and flexible crisis response forces for
employment in support of foreign policy objectives. These forces
provide the most formidable amphibious forcible entry capability in the
world. Amphibious lift requirements are formulated to support the
national military strategy, satisfy combat surge requirements, and can
also be tailored to meet real world day-to-day commitments.
The warfighting requirement, the capability the Marine Corps
strives to provide to our nation, remains at 3.0 Marine Expeditionary
Brigade Assault Echelons and equates to 14 Amphibious Ready Groups. The
requirement for an amphibious force structure plan that supports lift
for 3.0 Marine Expeditionary Brigade Assault Echelons, as stated in the
Department of the Navy's 1990 Integrated Amphibious Operations and USMC
Air Support Requirements Study, the 1992 Mobility Requirements Study,
and reemphasized in Congressional testimony and the Secretary of
Defense's 26 June 2000 Report On Naval Vessel Force Structure
Requirements, remains a priority requirement.
Fiscal constraints, however, have limited amphibious lift to a
programmatic goal of 2.5 Marine Expeditionary Brigade Assault Echelons
that equates to 12 Amphibious Ready Groups. This capability will be
achieved with active amphibious ship force structure upon delivery of
the twelfth LPD 17 class ship. In the meantime, maintaining LKAs and
LSTs in a reduced operating status called the Amphibious Lift
Enhancement Plan is a temporary fix meant to fill the gap between
today's shortfall and the delivery of the LPD 17 ship class. The
shortfall in active amphibious ships remains an area of concern.
______

Questions Submitted by Senator Christopher S. Bond

DEFENSE SUPPLEMENTAL

Question. We understand that the current defense supplemental
request addresses the Navy and Marine Corps most pressing readiness
needs. What are some additional unfunded requirements that you will be
forced to address through reprogramming readiness and/or modernization
funds for fiscal year 2001?
Answer. While the fiscal year 2001 Supplemental Request addresses
the Marine Corps' most critical ``must fund'' requirements, it does not
cover approximately $27 million still needed to fund other critical
requirements in our military personnel (MPMC) and operation and
maintenance (O&MMC, O&MMCR) accounts. The Marine Corps has requested
approval, within the DOD Omnibus Reprogramming Request, to transfer $27
million from our ground equipment procurement account (PMC) to cover
these critical requirements. Specifics are as follows:

``Must Pay'' Bills Not Covered in the Fiscal Year 2001 Supplemental
Request

(In Millions)

MPMC:
Enlisted Average Strength Overexecution O&MMC................. $21.0
IT Pay Raise.................................................. 1.9
Reduction in Govt. of Japan Burdensharing..................... 2.3
Collateral Equipment, Hospital Pt., Quantico O&MMCR........... 1.6
IT Pay Raise.................................................. .2
______
TOTAL....................................................... 27.0
=================================================================
________________________________________________
PMC:
Target Location Designation Handoff System.................... -11.9
Transportation Coordinators Auto Info Movement Sys............ -1.3
Combat Vehicle Appended Trainer............................... -9.8
Forklifts..................................................... -4.0
______
TOTAL....................................................... -27.0

F/A/-18 E/F

T-45 TS

Question. Pilot training is an important part of supporting both
Navy and Marine Corps operational readiness. Indications are that the
Navy is cutting back on the procurement of the T-45 Goshawk training
systems, which will have a direct impact upon pilot training.
What are your plans for continuing to pursue the 234 T-45 aircraft
that have been determined to be the optimal number to meet the
operational pilot training rate?
Answer. The 234 T-45 aircraft total represents the number required
to support the operational pilot training requirement until fiscal year
2035. The Navy completed a study in December 2000 that analyzed options
available to support the pilot training rate through fiscal year 2035.
These options included continued procurement of T-45 aircraft,
extension of the T-2 Buckeye beyond which was previously envisioned,
and follow-on trainer aircraft new start research and development
requirements. The Navy is now conducting a prioritized review of
programs as part of its fiscal year 2003 budget submission process. A
focal point of this process will be a review of options available to
meet the pilot training requirement. Continued procurement of the T-45C
Goshawk training system will be among those options reviewed.

AV-8B

Question. The AV-8B Harrier is the mainstay for Marine close air
support. The requirement for the conversion of older models to the all-
weather night attack variants remains a high priority as explained to
Congress.
Has the requirement for additional conversions changed? Can we
conclude that the Marine Corps needs additional AV-8Bs?
Answer. Fiscal year 2001 Congressional enhancement procured two of
the 16 additional Remanufactured Harrier requirements as identified by
the DoN Strike Master Plan. The USMC maintains the requirement for 14
additional Remanufactured Harriers. Presently the inventory of new
production Radar variant Harriers is 24 and there are 74 Remanufactured
Harriers delivered or on contract. This will bring the total inventory
of Radar variants to 98 by the time of final delivery in 2003. The 14
additional Remanufactured Harriers will raise the total to 112 in order
to fill the current squadron PAA (7 squadrons 16 aircraft)
without accounting for attrition or pipeline.

F/A-18 G

Question. The DOD is currently conducting an airborne electronic
attack analysis of alternatives (AOA) study. My understanding is that
the purpose of the AOA is to determine the best platform or systems to
take over the electronic attack mission--a mission currently conducted
by the Navy and Marine Corps EA-6B Prowler. I also understand that the
services need to begin replacing the Prowler no later than 2010 due to
the advanced age and heavy operating tempo of these aircraft.
Upon completion of the AOA does the Navy have plans to conduct a
risk reduction effort prior to commencing a new development program?
Answer. The Navy currently has an EA-6B weapons system upgrade
program called Improved Capabilities Three (ICAP III) which will IOC in
early fiscal year 2005 and will keep the EA-6B relevant until its
planned retirement date of 2015. The ICAP III capabilities are the
baseline for the ongoing Analysis of Alternatives (AoA) and will serve
as a significant risk reduction tool as those capabilities are
incorporated into a follow-on platform. The majority of the platforms
being considered to host this electronic attack weapon system already
exist or are in development with a significant amount of risk reduction
inherent in each program. The combination of knowledge from the ICAP
III system and selected host platform will enable the abbreviation of
risk reduction requirements and rapid progression to the Electronic
Attack Follow-on Program.
Question. Is there funding in place to support (a risk reduction)
effort (prior to commencing a new development program)?
Answer. Funding requirements are being considered as the Department
of the Navy develops the fiscal year 2003 and fiscal year 2004 budgets.
Question. What specific tasks are important to the Navy in reducing
the risk of a follow-on system?
Answer. The Navy is concerned with the integration of a high power
jamming system with existing host platform systems (flight controls,
avionics, navigation, communication and weapons). Also, the Navy has
additional concerns with ElectroMagnetic Interference (EMI),
quantifying and understanding the shielding and blanking requirements
of system-to-platform integration, and dynamic flight envelope
exploration of the system/platform combination.
______

Questions Submitted by Senator Kay Bailey Hutchison

Question. General, does the supplemental appropriations request
provide enough funding for the necessary redesign and testing for the
V-22 program?
Answer. Yes, the fiscal year 2001 supplemental appropriations
request does provide sufficient RDT&E,N funding to support the
necessary redesign and testing for the V-22 program for fiscal year
2001.
Question. A few months ago it sounded as if the Marine Corps
commitment toward the vertical take off version of JSF was wavering.
Does this program remain a Marine priority? If the vertical lift
version proves to be too expensive, would the Marine Corps buy the Navy
version instead?
Answer. The CNO and I are firmly committed to the Joint Strike
Fighter. We agree that JSF will be a vital element for our
expeditionary Navy and Marine team, a stealthy aircraft able to operate
from carriers, large deck amphibious ships, expeditionary sites ashore
or main operating bases. I am also firmly committed to the vision of a
JSF STOVL aircraft for the future all V/STOL force in Marine aviation.
The JSF program is delivering precisely the kind of weapons system that
the Congress has repeatedly called for: a truly joint aircraft that
avoids unnecessary duplication in developments yet also provides leap
ahead technology at a low cost, highly reliable, and interoperable
system. We need new aircraft beginning in fiscal year 2008, and I
expect that aircraft to be JSF STOVL. However, should a currently
unforeseeable technical/affordability challenge preclude introducing an
``acceptable'' JSF STOVL aircraft in fiscal year 2008, then it is
logical for us to accept JSF Navy CV variants until the program
delivers the STOVL variant that Marines require.
JSF is an important national program, not only for the Navy,
Marines, and Air Force to fly in the increasingly threatening skies of
the 21st century, but also for our allies who have shown strong
interest with their capital investment in the program. JSF has the
potential to deliver up to 6,000 aircraft for America and our friends,
thus potentially increasing further the U.S. industrial base. There is
no foreign aircraft development that can compete with JSF. I support
JSF for reasons that are greater than the valid requirement to equip
Marines with a great weapon system.
Question. We are constantly hearing about the ``Transformation'' of
our military to meet emerging threats. Would you please explain your
understanding of ``Transformation'' as it relates to the Marine Corps
and its relationship to readiness and modernization requirements?
Answer. Unlike the other services that have undergone a major
restructuring in response to the changing strategic and operational
landscapes of the post Cold War world, the Marine Corps has been
assigned a role and organized, trained, and equipped as an
expeditionary force in readiness that is as relevant today as it was in
1952 when Congress established in law the role of the Marine Corps. The
Marine Corps has neither had to downsize, nor reshape itself, as a
result of the Cold War. Instead, the Marine Corps has continued to
follow an evolutionary plan for developing additional capabilities
needed to hone its ability to conduct its assigned role against the
changing threat in the 21st century. One thing is clear: the strategic
uncertainty that has followed in the wake of the end of the bi-polar
era demands military forces different from the heavy forces that
comprised the bulwark of U.S. conventional defense for the last five
decades. The Marine Corps, true to its heritage and already trained,
organized, and equipped for operations across the spectrum of conflict,
stands ready to continue its role as the nation's ``total expeditionary
force in readiness''.
Absent a change of role as a result of the end of the Cold War, the
Marine Corps has sought to modernize its forces through selective
acquisition of new equipment that takes advantage of emerging
technologies such as precision weapons, information technology, new
engines, stealth, etc. In some cases--such as the Light Weight 155 mm
Howitzer--the intent is to replace existing equipment that is past its
service life. In other cases--such as the MV-22 and AAAV--the ideas for
the technologies were developed during the 1980s to enable new
operational concepts, while the technologies to build the equipment
have not been sufficiently developed until 20 years later. Equipment
modernization will provide a major increase in the depth and speed that
the Marine Corps can carry out its assigned role within a naval
expeditionary force. It will result in potentially revolutionary
increased capabilities, but without a major restructuring and
transformational change in the operating forces of the Marine Corps.
Accordingly, modernization as used by the Marine Corps explicitly
means reshaping the Marine Corps capabilities to meet future missions
through the selective acquisition of new equipment that will enable the
execution of Expeditionary Maneuver Warfare in support of emerging
joint warfighting concepts. Modernization will lead to significant
increases in capability. However, because it is part of an
institutionalized and continuous process of Marine Corps combat
development, there is no requirement for a major shift in the way our
service trains, organizes, and equips Marine Corps operating forces
implied in the term ``transformation''.
To the Marine Corps, transformation is a continuing process that
spans decades of innovation and experimentation with the implementation
of new systems, operational and organizational concepts. It involves
the development of new operational, concepts, refinement of enabling
capabilities through experimentation, and the development of new
organizations, tactics, techniques, procedures, and technologies as
necessary to turn these concepts into warfighting capabilities.
Question. Please provide an update on the enhanced Maritime
Prepositioning Force. What is the funding status of ship number three?
Answer. The first MPF(E) ship, the USNS Harry L. Martin, is
assigned to Maritime Prepositioning Squadron One (MPSRON 1) in the
Mediterranean.
Conversion of the second ship, the USNS Stockham, was recently
completed by NASSCO, San Diego, CA. The USNS Stockham completed load
out in July 2001 and will join MPSRON 2 in Diego Garcia.
Our last MPF(E) ship to be fielded, ship number three, the USNS
Wheat/GTS Bazilaya, has a new delivery date scheduled for late November
2001. Military Sealift Command (MSC) negotiated a contract modification
(firm, fixed price vice cost plus contract) with Bender Shipbuilding
(Mobile, AL) and additional funding of $11 million was provided from
the National Defense Sealift Fund (NDSF) for the USNS Wheat/GTS
Bazilaya conversion.
Question. Please explain the mission of the Blount Island complex
and its role in supporting U.S. national security interests?
Answer. The mission of the Blount Island Complex focuses on
attainment, maintenance, and sustainment of all requirements in support
of the Marine Corps' Maritime Prepositioning Ships (MPS). Maritime
Prepositioning Force (MPF) Maintenance Cycle operations conducted at
Blount Island are vital to maintaining the readiness and continued
capability of the MPF program. Blount Island is recognized by DOD, the
Joint Staff and the Commanders-in-Chief (CINCs) as a vital national
strategic asset, through its role in support of the MPF program. Since
1986, the MPF Maintenance Cycle for prepositioned equipment and
supplies has been conducted at Blount Island. Blount Island is part of
the Strategic Enabler entitled ``Strategic Mobility'', and is an asset
that is critical to the worldwide application of U.S. military power
and our military strategy, under the strategic concepts outlined in the
National Military Strategy of Forward Presence and Crisis Response.
Under these concepts, the MPF program provides rapid and efficient
strategic deployment options through strategic siting around the globe
for the geographic and combatant CINCs. This enables MPF to be
especially responsive to regional crises and disaster relief.

SUBCOMMITTEE RECESS

Senator Inouye. The subcommittee will stand in recess until
June 27, when we will hear from the Secretary of Defense, the
Honorable Donald Rumsfeld. Thank you very much.
[Whereupon, at 11:37 a.m., Wednesday, June 20, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2002

----------

WEDNESDAY, SEPTEMBER 5, 2001

U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Daniel K. Inouye (chairman)
presiding.
Present: Senators Inouye, Hollings, Leahy, Feinstein, Kohl,
Stevens, Cochran, Specter, Domenici, Bond, Shelby, and
Hutchison.

DEPARTMENT OF DEFENSE

Office of the Secretary of Defense

STATEMENT OF HON. DONALD H. RUMSFELD, SECRETARY OF
DEFENSE
ACCOMPANIED BY DR. DOV ZAKHEIM, COMPTROLLER

OPENING STATEMENT OF Senator DANIEL K. INOUYE

Senator Inouye. Mr. Secretary, General Shelton, we welcome
you here this morning to discuss the Department of Defense's
(DOD) budget request for fiscal year 2002.
General Shelton, we recognize that this is likely to be
your last appearance before the subcommittee, and so on behalf
of the committee I want to thank you for your service to our
Nation. You have been a great military leader, a soldier's
soldier, and a true defender of military personnel. Your
initiatives to reform military pay and health care will serve
as your legacy for many, many years the men and women of the
Armed Forces will remember what you have done for them. Thank
you.
General Shelton. Thank you, Mr. Chairman.
Senator Inouye. Mr. Secretary, although I cannot truly say
I remember, I would suspect this is not your first appearance
before this committee.
Secretary Rumsfeld. No, sir.
Senator Inouye. Well, I do believe it is the first time in
25 years. We will welcome you this morning, and look forward to
hearing your candid assessments of the state of our military
forces, and justification for your budget request. The fiscal
year 2002 amended budget request before this subcommittee is
for $319.4 billion in budget authority. This is $26.3 billion
more than that was provided in 2001, and $18.2 billion more
than what was requested in February.
Unfortunately, the budget resolution did not provide the
increased funding requested in your amended budget. Instead, it
stipulated that the additional $18 billion in defense funding
could only be provided if funds remained above and beyond the
Medicare and social security surpluses. According to the
Congressional Budget Office (CBO) and the Office of Management
and Budget (OMB), since the Bush administration took over, a
slumping economy, a large tax cut, have eliminated all the
available funds.
Mr. Secretary, this leaves this committee and the Senate in
an untenable position. The allocation for this subcommittee is
$20.8 billion below your request. If we are to abide by this
allocation, we must cut your request by this amount. The only
way for us to live within this level would be to decimate your
modernization budget or gut your readiness funding and
eliminate the pay raises and some force structure, and Mr.
Secretary, I want you to know that I will not be a party to
that.
I have served on this subcommittee for nearly 30 years. I
have shared the responsibility for chairing it with Senator
Stevens for the past 13 years, and Senator Stevens has been
doing the same for the past 21 years. Together, we saw the post
Vietnam drawdown, the Carter cuts and then his reversal, we
witness the Reagan build-up, when much good was done for
defense, but a great deal was wasted as the administration
failed to make careful choices. We saw the post cold war
drawdown and procurement holiday begun by President Bush and
continued by the Clinton administration, and then we saw return
to minimal growth at the end of the last administration, but at
a level much lower than what was needed.
Now we are faced with an administration that says it wants
to increase defense, but allocated all the available resources
from a large tax cut, so we are told. If we want to provide
what is needed for defense, we must do so by cutting social
security and Medicare revenues. Mr. Secretary, many of our
colleagues are going to be reluctant to cut into Medicare and
social security to pay for defense. Politically, they worry
that the voters will penalize them for raiding social security.
I, for one, believe it is essential that we provide the
resources necessary for defense. I am old enough to remember
what happens when we fail to take care of defense. I saw the
attack on Pearl Harbor. I remember June 25, 1950, when the
North Koreans attacked. There is one lesson I will never
forget. If we want to prevent war, we must be prepared for war.
It would be easy to play politics on this issue, but this
is too important, and so I will not take part in any effort
which would short-change national defense for political gain.
Today, fewer than 1 percent of all Americans serve in the
military. They protect the remaining 99 percent. It is the duty
of the Congress and the administration to make sure they are
well-paid, trained, and ready, and equipped with the finest
weapons to serve as a warning to any potential adversary that
we will defend freedom throughout the world.
Mr. Secretary, as we receive your testimony today, we hope
not to focus on the political debate of spending social
security for defense, but rather on the nuts and bolts of your
request. Many of my colleagues believe your request is
excessive. They argue that 9 percent is too much growth. They
question why you need to increase missile defense by $3 billion
in 1 year. They want to know why you have requested a 55-
percent increase in the defense health program. They wonder why
a 5-percent across-the-board pay raise for the military is
necessary when the services have met their recruiting and
retention goals during each of the past 2 years.
Mr. Secretary, I pledge to you that we will do everything
we can to get you the funding that you need, but we need your
help. In your words today, you need to convince these skeptics
that the $319 billion request before us is essential to
maintain readiness, and that it invests in the right mix of
programs for the future.
So Mr. Secretary, General Shelton, this is a challenging
assignment, but we are confident that you are up to the task,
and we look forward to your testimony.
With that, I want to defer to my dear colleague from
Alaska, Senator Stevens, for any comment he wishes to make.

STATEMENT OF Senator TED STEVENS

Senator Stevens. Thank you very much, Mr. Chairman, and I
apologize for not being here on time. I do join the chairman in
welcoming you here today, gentlemen, Mr. Secretary, Chairman of
the Joint Chiefs, and Under Secretary Zakheim. We have long
followed this practice of asking the Secretary to come before
us prior to our markup of the bill to give the Secretary the
last word. I do think we ought to start off by commending you,
Mr. Secretary, for having the courage to take the time to
closely examine and assess the programs of the past and to try
and see what we can do to determine what the future
requirements of our country will be for defense.
No one welcomes that tough scrutiny, but I believe a
challenge to the status quo is always in order, and it was the
right decision to make at the right time and for the right
reasons, and we welcome your assessment.
General Shelton, I join the chairman, of course, in
thanking you for your service and regretting that this may be
the last time you are here. God only knows what is going to
happen this fall. You may be back, but I hope not. Not that I
do not want you back, but I just do not want to continue this
process for too long.
We are at a very strange time now. I applaud the statement
the chairman has just made. I do believe it is the time for us
to assess the needs of the Nation in the future. I think we all
have to keep in mind the enormous time that it takes now to
deploy systems or make changes in the military structure. The
decisions that we will make, based upon your request and your
findings, will affect generations to come. As a matter of fact,
I would predict that less than half of the members of this
panel will be here when we deploy the systems that you are
working on now. It is taking as long as 20 years now to get
some of the major systems to our forces. Since the end of the
cold war, Senator Inouye and I have urged a successive number
of administrations to pay close attention to the Pacific. I
commend all of you gentlemen for the emphasis you have placed
on that portion of the world, and look forward to hearing your
views and priorities for defense in that region.
Many are quick to point to China as the potential adversary
should we develop new military concepts. As one who served in
China, and watched China for many years now, I do not think we
should come to that automatic conclusion that they will
necessarily be an adversary of our country in the future, but
the systems that we are going to review here today are
important not only for the concept of the Pacific, but for our
whole global role now as a nation, and from India to North
Korea, to Australia, throughout the world, the complexities of
our future require that we work together without regard to
politics, as the chairman has said.
I join everyone in regretting that we are in a situation
where the budgets are going to be tight.
Mr. Secretary, I had the honor to be present on Monday in
Berlin, the meeting of what they call the Atlantic Bridge. A
group of our military officers and the officers and former
officers of the German Army meet together annually to assess
the future, and it was really a sobering time to review the
problems of Europe as they affect our future, and to try and
comment upon our view of what is going on over there now.
We have never really shied away on this subcommittee from
tough choices, and we welcome the opportunity you are going to
give us to make some. I think that the need to recast our
military for the future is obvious. The need for really tough
decisions on what weaponry we must prepare to assure that we
meet the future needs of our country is also obvious, but I
hope that we can have the working relationship with you and
your colleagues that will assist us in developing this budget
now on a bipartisan basis.
My last comment would be that I do sincerely join the
chairman with regard to his comments concerning the surplus
problem. We are dealing with estimates, and the margin of error
on any estimate of the complexity that we are dealing with here
in terms of defense is such that the differences between OMB
and CBO are immaterial, and the statistical comparison of those
estimates could lead us just as easily to a conclusion that
there still is a surplus, as well as the conclusion that we may
face the problem of whether we should invade it in order to
assure that our defenses for the future are secure.
I intend to support the chairman in his comments, and to
work to try and make sure that we do set off now in this first
budget after--you know, this was our year for the goal of a
balanced budget, Mr. Secretary, but if we go forward now in
2002 on a basis of continuing the decline in moneys that are
available for our defense, I think it will be a sad mistake for
future generations.
I welcome the opportunity to work with you, Mr. Chairman,
and with you, Mr. Secretary, and the Joint Chiefs, and the
Under Secretary and Comptroller. It is going to be a tough
call, but I look forward to working with you.
Thank you, Mr. Chairman.
Senator Inouye. Thank you very much, Senator Stevens.
Senator Leahy.

STATEMENT OF Senator PATRICK J. LEAHY

Senator Leahy. Thank you, Mr. Chairman. I want to welcome
Secretary Rumsfeld here. Looking around, Mr. Secretary, this
committee, I see of course both Senator Inouye and Senator
Stevens as well as Senator Hollings and Senator Domenici. We
were all serving here when you were first Secretary of Defense.
You have not aged, but some of us have, so I welcome you back.
And I would say General Shelton, you have done this country
proud in your service as Chairman of the Joint Chiefs, not only
here in the United States, but we always look to the military
for the best, especially at your level, but just by the nature
of your role you are in effect a worldwide ambassador.
I know you have traveled all over the world. You are what
many other countries from their leaders on down see as the
reflection of the military when they see the Chairman of the
Joint Chiefs come, and that reflection has been a very good one
from all the services, and I appreciate the amount of time and
commitment you have made, and your family has made in your
career, a long and distinguished career. I want to say it on
the floor, but I did want to say that with you here, how much I
appreciate it.
General Shelton. Thank you, sir.
Senator Leahy. I am also going to have a number of
questions, Mr. Chairman, on the budget, land mines and military
modernization. I should say initially I was troubled by the
reports which came out on Sunday that the administration may
turn a blind eye to China's nuclear weapons modernization for
the sake of selling its missile shield plans. Mr. Secretary, I
hope you will clarify the administration's policy on possible
Chinese nuclear buildup. I would also ask the chairman's
consent that an editorial from the Rutland Herald in Vermont on
Tuesday, September 4 be included.
Senator Inouye. Without objection.
[The information follows:]

[From the Rutland Herald, Sept. 4, 2001]

Bizarre Thinking

The Bush administration is considering a policy shift with
regard to China that raises Kissinger-style realpolitik to a
new level.
The New York Times reported on Sunday that Bush was willing
to set aside its objections to a Chinese missile buildup in
exchange for acceptance by China of a U.S. missile shield.
The logic of this position is so bizarre that it can be
explained only by the confluence within the Bush administration
of two dangerous ideas. The first is Bush's idea that missile
defense must trump all other foreign policy and defense
priorities. The second is that acquiescing in the
militarization of China will make for stable relations, which
would be in America's economic interest.
This policy shift was revealed to the press by ``senior
administration officials.'' Such revelations usually occur
either as an attempt to torpedo a policy by making it public or
as a trial balloon to test public reaction. Another motive may
be to send a signal to China that the Bush administration is
really its friend even if public opinion in America is not yet
ready to go along.
It's not clear whether the administration will try to
advance this new policy in the open. On Monday, Bush's press
spokesman said it was still U.S. policy to discourage the
development of nuclear weapons. In other words, Bush hasn't
officially changed his policy yet, but he may be preparing to
do so.
It is peculiar logic, however, to encourage the development
of nuclear weapons by China in order to gain approval for the
defensive shield designed to shoot down nuclear weapons. The
unnamed senior officials explained the logic this way: China is
going to develop its missiles anyway, so it doesn't do us any
good to make the Chinese angry by resisting. Besides, the
missile shield is meant for missiles from rogue nations such as
North Korea or Iraq, not China, which is what we want China to
understand.
The logic of that assertion is bizarre as well: We intend
to build a missile defense system against nations who lack
threatening missiles, rather than against a potentially hostile
power that actually has missiles and plans to build more.
Bush's friendliness toward China raises a different
question. China has become a favorite of America's business
community because of the efficient and oppressive rule of the
Beijing government. It creates a climate where business can get
done.
Increasingly, China's government is being compared to that
of General Pinochet in Chile, which is to say a quasi-fascist
military regime joined at the hip with business interests that
benefit by the murders and oppression enacted by the military
to nurture a profitable business climate.
China is a major power, and there is no reason the United
States needs to revert to the attitude of the 1950s when China
was anathema and all ties were severed. But neither should the
United States be sending love letters to the autocratic rulers
of China.
The United States cannot stop China from developing its
missile program. But it ought to be U.S. policy to use all its
diplomatic and economic power to discourage a nuclear arms race
that would also involve India, Pakistan, and perhaps Taiwan.
Realpolitik in American foreign policy of the Kissinger era
gave us the shah of Iran and Pinochet in Chile--both of them
disasters. Bush's obsession with missile defense has worked a
screw loose in the thinking of his foreign policy specialists.
It doesn't make sense.

Senator Leahy. I would also like to mention, Mr. Secretary,
that Senator Hagel and I met with General Shinseki and
Commandant Jones to discuss the administration's policy on land
mines. I know there's a policy review underway. I sent copies
of correspondence that I have had with the President and with
Secretary Powell, and Condoleezza Rice to you, Mr. Secretary,
and I will make sure we give your staff copies, again, of those
letters.
I think that we have got to look at where our opportunities
are. The Pentagon is preparing to spend hundreds of millions of
dollars on an alternative program of land mines. When you look
at the design, many within the Pentagon will state very frankly
it is not going to go anywhere.
There are some existing smart weapons and sensor technology
that could offer a more cost-effective solution to the problem,
but also could put us back into a leadership role, a worldwide
leadership role on this whole issue of land mines, and that the
rest of the world--it says is suggesting we are not being
positive, acknowledge not only a positive role but also start
to acknowledge what we have done, everything from land mine
clearing to things like the war victims fund.
So there is a lot of things in here, Mr. Chairman. I am not
going to belabor it further, but those are the areas of
questions that I will have.
Thank you very much.
Senator Inouye. Senator Shelby.

STATEMENT OF Senator RICHARD C. SHELBY

Senator Shelby. Thank you, Mr. Chairman.
Mr. Chairman, I, too, want to join in the chorus and
welcome Secretary Rumsfeld back here, he is no stranger, and I
do not want to take all morning because I want to hear from
him, and also have an opportunity, Mr. Chairman, to ask him a
few questions.
General Shelton, everybody has been saying you served this
country well. We are proud of your record. You have earned it.
You might be back here and you might not, but wherever you are,
we wish you the best.
Mr. Secretary, there are a couple of things that I will get
into later. One has to deal with the chemical demilitarization
program that I am very concerned about, because it affects not
just my State and Anniston Army Depot, but some other States,
and we had a hearing on this here in this committee back in the
spring, and I have written to you about this, and I will get
into it later, and the other is, as we talk about the budgets
and the weapons, future weapons, I would be interested in your
comments and also General Shelton on the future modernization
of the services, and what role the rotor craft, the helicopter
will play in this transformation effort, and why will they play
it? What role do you see helicopters playing on the battlefield
of the future, in light of the talk about the increasing
likelihood of urban operational environments and a push for
greater emphasis on joint operations. I will get into that a
little later.
Mr. Chairman, I would ask that my complete statement be
made a part of the record.
Senator Inouye. Without objection, so ordered.
[The statement follows:]

PREPARED STATEMENT OF SENATOR RICHARD C. SHELBY

I would like to join Chairman Inouye and my other
colleagues in welcoming both of you here today to discuss the
fiscal year 2002 defense budget and the posture of our military
forces--Secretary Rumsfeld for the first time and General
Shelton for the last time. I would like to take a moment to
join the chorus of members who have expressed their
appreciation to you General Shelton for your service to our
country. I have enjoyed working with you and wish you the best
in all your future endeavors.
We are here to discuss the fiscal year 2002 defense request
of $328.9 billion sent to us by President Bush for the
Department of Defense. Comments on the way you conducted your
``strategic review'' for President Bush and the adequacy of the
fiscal year 2002 request have been very freely offered. I would
have loved to have seen a higher number for defense. I believe
many more critical requirements exist than can be met with this
budget or those proposed in the future years. Mr. Secretary,
being experienced and having done this before, you possess a
keen understanding of the political realities that exist in
Washington right now with a divided Congress. While
unsatisfied, I agree that the fiscal year 2002 budget request
represents a reasonable and feasible approach to providing for
the near-term and most immediate needs of our military
services. Given recent news about budget surplus projections,
much remains to be done if we hope to put the Department on a
glidepath that will result in your being able to meet out-year
R&D, Personnel, Procurement, Modernization and overall
Transformation goals.
The budget is very tight. Many competing interests and
issues of varying priority are fighting for scarce dollars. I
want to be very clear how I feel about the work we are here to
do on this subcommittee. I believe that providing for the
National Defense is our number one responsibility as a
Congress. The defense budget blueprint we have been presented
with is a good first step. I continue to be troubled by what
I've seen both on a regional scale and by activities of a
number of foreign countries in terms of the threats we face. I
am also concerned with the state of health of many of our
critical military bases. If you have been to even the best of
our military bases recently, you know exactly what the real
needs are facing our military commanders and the soldiers,
sailors, airmen and Marines they lead.
I look to President Bush and you, Secretary Rumsfeld, to
show the kind of leadership we need to meet the challenges we
face. I, along with many others, eagerly await the completion
of the 2001 Quadrennial Defense Review. With its completion,
answers to the big questions surrounding how to modernize and
transform our military forces should become clearer. I want to
work with you to take this first step this year and am very
interested to see how big a step will be prescribed for fiscal
year 2003. Just as we must act to keep our men and women in
uniform ready and equipped to meet and defeat any threat in any
theater of operations, I believe this fiscal year 2002 budget
represents the perfect vehicle to resolve as a Congress, as a
government and as a nation to make the defense of our country
and our allies a national priority by fielding theater and
national missile defenses as soon as possible.
Thank you Mr. Chairman. I look forward to your testimony,
and I have some questions to ask when my time comes.

Senator Inouye. Senator Hollings.

STATEMENT OF Senator ERNEST F. HOLLINGS

Senator Hollings. Thank you, Mr. Chairman. Let me commend
General Shelton on the outstanding job you have done for the
country, General.
Secretary Rumsfeld, we are back at the old BMD, ballistic
missile defense. When you were the Secretary under President
Ford and they had General Danny Graham in charge of it down at
Huntsville, Alabama, so they call come and talk about a new
initiative. The fact of the matter is, there are not as many
Americans as there are Russians, or as there are Chinese. We
cannot match them man for man, but we maintain the security of
our country with the superiority and technology, and I am glad
you understand this, while we have got world peace generally.
Otherwise, I am worried about Colombia. They have yet to
learn the lesson that in a country there has got to be one
military force, and that has got to be in the hands of the
Government.
David Ben Gurion admonished Menachim Begin of just that, in
the early days when Israel had been recognized by the United
Nations. Begin was ready to receive a ship off-shore full of
arms and run his own military, and David Ben Gurion said, ``In
a country, there has got to be but one military force, and that
is going to be in the hands of the Government.''
The Colombians never have really agreed to that in their
minds. They are trying to make peace. They are trying cooling-
off periods, they are trying to give demilitarization zones,
and unless and until they agree on their own to clean the drugs
and militants out, I am opposed to anymore military assistance.
I have been there, and it is just like another Vietnam, and we
are headed right down that road.
Otherwise, I thank you, Mr. Chairman.
Senator Inouye. I thank you very much. Senator Domenici.

STATEMENT OF Senator PETE V. DOMENICI

Senator Domenici. Mr. Chairman, fellow Senators, I
appreciate an opportunity just to make a couple of statements
about your numbers--and I understand you are supporting the
White House, the President's request--and whether the numbers
will fit in this budget. I believe they do.
I believe a point of order should not take precedence over
your request, because according to the numbers, the
Congressional Budget Office had assumed an increase in its
baseline of $7 billion. And, then what you have left over gives
you enough to cover the outlays that are attributable to the
increased funding. It is outlays that impact the surplus, be it
social security's assumed surplus, or Medicare, so I believe
for this year you can get by with, 18, and we can have a nice
debate about whether it fits.
On the other hand, I believe there is a far more important
issue, and I think that is the issue of the American economy.
As a matter of fact, we are now talking about using the
surpluses of this great American economy for one thing.
Everybody is talking about debt service. As a matter of fact,
we have reduced debt in the past 2 years more than any country
in civilized history, and we are on that path again. As a
matter of fact, with the pessimism that is being expressed by
the budget chairman on the Democratic side, we will pay down
the debt and accumulate a surplus of $165 billion.
All of that is now earmarked for debt service, but what
happens to education during a slump in the American economy? Do
we say we cannot fund it because we want to put all of our
money on the debt service? What do we say when defense comes
forward with a proposal? The economy is gobbling up our
surpluses. It is gobbling it up fast. How fast? $46 billion in
outlays for next year will be gobbled up not by this budget,
not by an increase in the Department of Education, all because
the American economy is in the fifteenth month of a recession,
not a technical recession, but from 5.1 percent growth, down to
less than 1 percent now, on a gradual 15-month path.
Incidentally, Mr. Chairman, I listened to your remarks
about worrying about social security and the Medicare surplus.
Let me just suggest to you that the truth of the matter is that
yesterday we had a witness before us from the Congressional
Budget Office. I said to him, Mr. Crippen, did the President of
the United States have anything to do with the current
recession in the United States economy? Answer, a simple no.
Did the Congress of the United States do anything that brought
on this recession? Answer, no.
What has happened is that a readjustment in the world and
in America on the capital side of the equation. As a result, we
have $46 billion of the surplus we counted on gobbled up by one
thing, the American economy being in recession. Everything we
do ought to be, how do we get the American economy to come
back?
I do not believe you cut spending. I do not believe you cut
spending when you have this kind of a recession. As a matter of
fact, I might join with those who say you should increase
spending; that may be my personal view, but in this case I
believe that it is pure folly to talk about the United States
is doing something to social security or Medicare, when we are,
as a matter of fact, paying down the debt, which is all you do
with the social security surplus. That is all you do with it,
is pay down the debt.
We are paying now the second largest amount in American
history. Which was the largest? Last year.
So I submit there is room for this budget. There is room
for what we think, in both Houses, should do the job. Is it the
entire budget that they have asked for? I do not know. I have
some serious questions about why they have ignored some of the
nuclear weapons needs as they produce this budget, but frankly,
I intend to support you on either count. If you want to waive
what I consider to be a fictional impact on social security or
Medicare, a fictional impact, if you want to waive that, I will
be with you. I will do whatever you say. I will do as much as
you think you need.
If, as a matter of fact, you are worried about the 2002
budget, you can fit it in. You can fit it with the outlays.
When will the American economy turns back up and starts
yielding the revenues that we need to pay for education
increases, to pay for military increases, and all of the other
things that we need.
So Mr. Chairman, I think it is relevant that we find out
what is needed in this budget, but I do not believe we ought to
be terribly frightened about the fact that we are $3 billion or
$4 billion, or $5 billion over, as I indicated a while ago,
some fictional line, when as a matter of fact the on-budget
surplus is huge, huge at this point.
I thank you.
Senator Inouye. Thank you very much. Senator Kohl.

STATEMENT OF Senator HERB KOHL

Senator Kohl. Thank you, Mr. Chairman, and Secretary
Rumsfeld, we all welcome you here today. I just briefly make
the point to you that I believe the American people need to
hear from you why, at a time when we are basically at peace
with the world, and cannot make the case that there is some
extreme urgency about considerably increase defense spending,
why you feel that with money being in short supply, as it is,
and with all agree with that, no matter where we sit we all
understand and recognize that we do not have a great deal of
money to spend this year beyond our needs, which exist in
virtually every category, and which, I am sure many people
would argue, are equally as important as defense--why, in light
of all of this, you would like for us to allow the military a
significant an increase as what it is you are asking for,
whether it is force modernization or the missile shield defense
system, or all the other items you have which you believe are
well-justified.
Looking at it from the big picture, which of course you are
very capable of doing and have always done, we need to hear
from you why it is that defense in its largest aspects deserves
such a large chunk of our total expenditures, and particularly
when it is so much more than it has been in recent years. I
think that when we come out from this hearing we need to hear
from you what the justification is for that, and I thank you
for being here.
Senator Inouye. Thank you very much. Senator Cochran.

STATEMENT OF Senator THAD COCHRAN

Senator Cochran. Mr. Chairman, I am very pleased to join
you in welcoming the distinguished witnesses we have before the
committee today. I am especially glad to have the opportunity
to welcome General Shelton in his final appearance here, and
commend him for his 38 years of dedicated service to our
country.
I am pleased the budget request attempts to address some of
the concerns this subcommittee has raised in the past,
including restoring military morale and improving readiness, as
well as a robust development and deployment program for missile
defense systems, but I am troubled that in some areas we are
still falling short of the mark, particularly in ship
construction.
I realize the quadrennial defense review (QDR) will not be
completed until the end of the month, and discussions of force
structure requirements might be premature at this time, but I
am deeply concerned about the continued downward trend in
shipbuilding, and its potential negative impact on our Navy's
and our Nation's ability to maintain a credible forward
presence. I am concerned about the harm that the construction
rate is having on our shipbuilding industrial base, and its
ability to meet future requirements.
Furthermore, I am skeptical of the proposed General
Dynamics acquisition of Newport News Shipbuilding. Even though
it has the potential to create a short-term savings in the
construction of nuclear powered ships and submarines, the
resulting monopoly could have a long-term crippling effect on
the rest of the industrial shipbuilding base. If this merger is
allowed to proceed, I believe we will be paying significantly
more per ship in the future.
Additionally, I think a commitment should be made as soon
as possible to begin the DD-21 program. It will provide
operating efficiencies and stealthy power projection that will
enable us to prevail in future conflicts with less risk to our
sailors and marines.
Mr. Chairman, I look forward to the testimony of our
witnesses.
Senator Inouye. Thank you very much. Senator Feinstein.

STATEMENT OF Senator DIANNE FEINSTEIN

Senator Feinstein. Thanks very much, Mr. Chairman, and
welcome, Mr. Secretary. Welcome, General Shelton. It is good to
see you both again.
I want to just make a few off-the-cuff comments, if I
might, on the missile defense issue. I am greatly concerned
about the testing, the cost, and the strategic and arms control
implications of proceeding with the plan you want to proceed
with involving missile defense. The bottom line of a program it
seems to me, is: is the world going to be safer because the
United States has an overarching ballistic missile defense
system, or is the world going to be a more dangerous place?
When I read that the administration may well support
additional nuclear testing, allow China additional nuclear
tests, would not object to China's moving ahead with the
development of a missile program, I see where the world may be
a much more dangerous place.
I would also suspect that the $60 billion put forward as
the cost is just the first down-payment on what is likely to
cost literally hundreds of billions of dollars, and when I talk
to men in uniform, yes, even the heads of services, as I did
last night, they do not believe this is a number one threat.
They are much more concerned about the asymmetrical threat, and
one I spoke with was even more concerned about the concept of
homeland defense, because they believe that the asymmetrical
threat to the United States is much more dangerous and should
be a much higher priority.
As a member of the Intelligence Committee, chairman of the
Terrorism Subcommittee of the Judiciary Committee, Senator Kyl
and I have held three hearings on the commission reports with
respect to terrorism. Intelligence has been looking at how we
manage our counterterrorism effort. We have asked the
administration, Senator Kyl and I, in writing, for advice as to
a program. We have not yet had a response, and yet to me this
is a much more significant threat to the United States of
America than the very remote possibility that Kim Jong II is
going to commit suicide by putting a TAEPODONG III in the air.
And yet we are faced with a budget that begins to put some
deployment mechanisms into an untested ballistic missile
defense, and I must tell you I have a major concern about it,
so I think--and I will be asking some precise questions about
that.
What is circulating on the Hill, and let me be very
precise, is that this administration is going to use China to
essentially justify a missile defense program. I very much hope
that is not the case. I do not believe--and I am a China
watcher too. I studied Chinese history in college, have tried
to read everything that has been written, have been to China
literally dozens of times, have had discussions with the
leadership.
I do not believe that China wants to be our enemy. We could
make China an enemy. I do not doubt that. But I have very deep
concerns about the wisdom of violating, or abrogating, or
pulling ourselves out of the Anti-Ballistic Missile (ABM)
Treaty, and I would like to know whether that is really the
intent that is behind this program as well, so that is where my
questions will be.
Thank you, Mr. Chairman.
Senator Inouye. Thank you. Senator Bond.

STATEMENT OF Senator CHRISTOPHER S. BOND

Senator Bond. Thank you very much, Mr. Chairman, and I very
much appreciate the opportunity to join with you in welcoming
our old friend and new Secretary of Defense again. Secretary
Rumsfeld, we appreciate having you here.
I join with my colleagues in saying a sincere thanks to
General Shelton. We have certainly appreciated the great work
that he has done, and service to the United States, as well as
his work with this committee.
Mr. Chairman, as a member--and I would say that let me add,
I concur with Senator Domenici. As one of his team on the
Budget Committee, I believe he has stated it well, and I will
join with him in supporting the budget, as he outlined.
But as a member of this committee, and as cochair with
Senator Leahy of the Senate Guard Caucus, I believe that our
defense policy and the role of the Guard and Reserve in
supporting our national military strategy is of the utmost
importance. It is important to me, it is important to the
people I serve in Missouri, and I think it is important to this
Nation, and frankly, I have been very disappointed that we in
Congress have not been consulted on many of the issues that
concern our Armed Forces, and that the Guard and Reserve in
particular have not been more fully engaged in the process of
evaluating our national military strategy. These issues have
significant implication to our national security in our Nation.
Mr. Secretary, we are your strongest allies. We want to be
your allies, but in order to help, as the chairman so aptly
stated, we needed to be included in the discussions.
Communication and coordination would suffice. After all, we are
all working in the same direction.
As you look for necessary savings within the Department of
Defense, it is clear to me that we will fail to maximize
potential savings if you fail fully to leverage the myriad
numbers of capabilities residing within the Guard and Reserve.
We have seen an increased use of Guard and Reserve capabilities
in past regimes, and they have enabled us to do a lot more with
less. However, we have yet to see a clear signal from this
Department of Defense, and you and your team, that this
philosophy will continue, and that this reliance will continue
to be there, and I am nervous. I hope you can assuage our
concern.
Having commanded the Guard in Missouri, as Commander-in-
Chief for 8 years, and having worked with them in the Reserve
over the years, I know they bring tremendous capabilities,
often at a great cost-savings, savings above what you can get
from full-time forces. We need to address and assess adequately
the depth and the breadth of these capabilities as we develop
our military strategy and shape our military forces.
Furthermore, I think it is critical that we acknowledge the
value of our citizen soldiers, sailors, airmen, and marines in
sustaining America's own involvement in support for a strong
defense. Our Guard and Reserve forces forge a link, a bridge
between our active forces and our citizens, and I saw that, Mr.
Secretary, in the aftermath and during Desert Storm. The people
of America were aware of and they were mobilized, and they were
vested in our efforts because units were called up from their
home towns, and I joined in greeting them when they came back
as conquering heroes and heroines as they should have been
welcomed back.
This involvement, this citizen participation in our
Nation's military commitment is something that has a value much
higher than any dollar amount we can put on it, and I just call
your attention, and I hope we can see the Guard and Reserve
fully involved in the military strategy, both for the sake of
our defense, and for the sake of saving dollars.
Thank you, Mr. Chairman.
Senator Inouye. Thank you very much. Senator Specter.

STATEMENT OF Senator ARLEN SPECTER

Senator Specter. Thank you very much, Mr. Chairman. I thank
you, Secretary Rumsfeld, for returning to the Department of
Defense and undertaking the prodigious job, and the way you are
tackling it, and I thank you, General Shelton, for your great
service to the country.
My questions will focus, among the many, many issues which
this subcommittee is looking at, on the issue of missile
defense and the ABM Treaty. I personally support missile
defense, but I want to see the particulars as to how much it is
going to cost, what the realistic possibilities are and the
plans on deployment.
Back in the mid-eighties when I was part of the Senate
observer team in Geneva, we had long debates about the narrow
versus broad interpretation of the ABM Treaty. I participated
in the floor debate which was characterized by some as historic
at that time, and I am very much concerned as to what is going
to happen with the ABM Treaty. I am hopeful that we will be
able to work it out with Russian President Putin and the
Russians, because it is such a major matter.
During the August recess, I had occasion to travel to
China, where our missile defense and the ABM Treaty was very
much on the minds of the Chinese leaders. The same concerns
were expressed in South Korea, where the South Korean president
was hopeful that we would take a little different tone toward
North Korea. He hopes we will not depict North Korea as a major
threat, even though they may be, and instead, try to work
something out on diffusing that problem.
I think it is very important that there be an unequivocal
statement from the administration denying, which I think is the
fact, a policy of permitting, or not objecting to, a Chinese
buildup on nuclear defense in exchange for not opposing our
missile defense. China is the coming Colossus, 1 billion 250
million people, and if they have a nuclear build up, that will
encourage India as an offset, which will encourage Pakistan as
an offset, and cause all sorts of problems.
Finally, Mr. Secretary, I will be interested in your views
concerning abrogation of the ABM Treaty, if it comes to that,
the role of the Congress. There has been a historical policy of
congressional resolution on abandoning treaties.
Constitutionally, there has to be a two-thirds ratification by
the Senate. However, that policy was changed by President
Carter by the Taiwan treaty of 1978. That change led to a
curious lawsuit which was brought to the Supreme Court, with
Senators Goldwater, Helms, Thurmond and Hatch all arguing that
the executive could not unilaterally terminate a treaty. We are
far from that situation, but it is something which I think is
worth exploring at an early stage.
Thank you for being here, and thank you, Mr. Chairman.
Senator Inouye. Thank you very much. Senator Hutchison.

STATEMENT OF Senator KAY BAILEY HUTCHISON

Senator Hutchison. Thank you, Mr. Chairman, and I want to
thank you for taking your time to come here, and I think this
is a very important time for us. First, I want to thank you,
Mr. Secretary, for taking on the mammoth task of saying that
the security threats of the 21st Century are different from
those we have faced in the last century, and I applaud you for
being very bold, because I do not think the United States has
established what those security threats are in the past, and I
do not think that we have even established our rightful place
in the world in the post cold war era, so I applaud that, and I
know you are going to be very deliberate and I want to say that
of the things that I have seen in the paper, I am very open to
a change in our strategy of two major regional conflicts, but I
hope you will have intense briefings for us if that is what you
are going to recommend, and tell us why you think the threats
should be different.
Secondly, I have talked to you about this, and I hope that
part of your overall strategy for building our force will
include assessing our overseas deployments and making sure that
we are in full force where we need to be, but where we also
pull back from perhaps the numbers that we have had. Just
because we have been there for 20 or 30 or 40 or 50 years does
not mean that in this new assessment it will be the same.
Third, I just want to say that I appreciate what the
President and your support of the President are doing for
missile defense, that you are being very deliberate, but I
cannot imagine the United States of America seeing the
potential threats and not addressing those threats, and it is
not as if we could all of a sudden 10 years from now say, oh my
goodness, there is a rogue nation that has an intercontinental
ballistic missile, and immediately have a missile defense
system for that. We have to plan ahead. That is our
responsibility. That is our duty, and it is yours, and you are
taking it, and I appreciate it.
So I am going to be very supportive of your missile defense
needs, your assessments, and it would be unthinkable to me that
we would not do the necessary things to prepare for the long
term for a missile defense, not only theater, which protects
our troops in the field wherever they may be in the world, but
intercontinental, to protect our people who live in our
country.
So I thank you for your boldness. I look forward to a lot
more discussion and briefings from you, and I think once we
have all the facts and your assessments, then you will find the
support that you need in Congress to prepare us for the 21st
Century and the security of our people.
Thank you.
Senator Inouye. Thank you very much. I have a statement
from Senator Reid that I would like to put in the record.
[The statement follows:]

PREPARED STATEMENT OF SENATOR HARRY REID

Mr. Chairman, let me begin by saying how pleased and honored I am
to serve on this prestigious committee entrusted with appropriations to
meet the nation's defense needs. Clearly, the beginning of the 21st
century is a time of profound change for our military. We must provide
for the immediate personnel, readiness and modernization needs of our
armed forces, with a clear emphasis on quality-of-life issues for our
servicemen and their families. At the same time, we must transform our
military to meet new threats and take advantage of enabling
technologies to ensure that America's fighting forces are second to
none, now and in the decades ahead. This balance between short- and
long-term needs is a difficult one, and I look forward to hearing
Secretary Rumsfeld's thoughts on setting priorities in a challenging
budget environment.
Perhaps no other state in the Union played a more significant role
than Nevada in winning the Cold War. The Nevada Test Site is a high-
technology engineering marvel where the United States developed,
tested, and perfected a nuclear deterrent which remains the cornerstone
of America's security and leadership among nations.
In this post Cold-War era, Nevada's military bases and industry are
poised to make a continued contribution to ensure America's armed
forces will prevail in any armed conflict. For example, Nevada's Nellis
Air Force Base is slated to play an increasingly important role in
testing and evaluating new and upgraded Air Force weapons systems.
Nellis Air Force Base has a solid infrastructure, cutting edge
technology, some of the most talented personnel in the U.S. armed
forces, and is one of the only air bases where planes have the ability
to take off with live ordinance. This March, Nellis will also become
the premier training base for pilots of the F-22 Raptor, a plane that
provides an asymmetric fighting advantage to protect U.S. interests the
world over for the next 20 years.
The Naval Air Station at Fallon is the Navy's premiere tactical air
warfare training facility. The associated Fallon Range Training Complex
is a national treasure that offers our military services the very
finest conditions in which to conduct critical training exercises. Put
simply, the facilities at Fallon define the airborne battle tactics
that lead to victory in battle. Fallon's future is bright among Naval
shore activities. A new hangar, ramp and academic building were built
in 1995 to accommodate the move of the Navy Fighter Weapons School,
popularly referred to as TOPGUN.
The Hawthorne Army Depot has been at the forefront of Army
logistics for the past 70 years, serving as the government's premier
resource, recovery, and recycling facility for munitions numbering in
the tens of thousands and ranging from small arms and fuses to rocket
propellants and tactical missiles. To demonstrate its leadership at the
forefront of military logistics, Hawthorne is seeking alternatives to
the open burning and detonation of munitions. Open burning and
detonation generates pollutants, raising serious concerns about adverse
health effects on populations sited down range from these facilities.
This year's defense appropriation will hopefully include funding for
the development of a rotary furnace technology at the Hawthorne Army
Depot to dispose of munitions in an environmentally friendly manner.
In closing, I want to pledge my support to the Secretary of Defense
and General Shelton, and to the men and women of America's armed
forces. Finding the right balance between present needs and future
musts is indeed a challenging task, but we will find that balance
point. As a new member of this committee, I'm committed to proving the
necessary funding for the defense of this great nation and its people.

Senator Inouye. Mr. Secretary, now that you have heard the
accolades of this committee and the concerns, I am pleased to
have you here, sir.
Secretary Rumsfeld. Thank you very much, Mr. Chairman,
Senator Stevens, members of the committee. I have with me also
Dr. Dov Zakheim, the Comptroller of the Department of Defense.
I would like to submit my prepared testimony for the record----
Senator Inouye. Without objection.
Secretary Rumsfeld (continuing). And then make some summary
comments.

TRIBUTE TO GENERAL SHELTON

First I want to join with you, Mr. Chairman, and the
members of the committee, in commenting on General Hugh
Shelton's service as Chairman of the Joint Chiefs of Staff. It
has been remarkable. He is a courageous and talented
individual. Two tours in Vietnam, a Purple Heart, leadership of
infantry and special forces units all over the world, leading
the 101st Airborne Division into battle in Iraq, commanding the
Joint Task Force in Haiti, leading U.S. Special Operations
Command, and then serving as our Nation's highest ranking
military man.
General Shelton is, indeed, a model soldier, and an
outstanding leader of men. It has been my privilege to serve
with him these past months. I must say that I have benefitted
from his wise counsel as we have worked together to fashion a
new defense strategy that we hope will help guide our forces
into the 21st Century.
General Shelton, America is grateful to you for your
dedication and your service, and I feel fortunate to work with
you.
General Shelton. Thank you very much, Mr. Secretary.
Secretary Rumsfeld. I would very much have liked to comment
on the very thoughtful comments and questions that were posed
as we began the meeting today. There are two I think I should
respond to immediately before making my remarks, just in case
someone leaves the room with the wrong impression.

NUCLEAR TESTING

Senator Feinstein, I believe you said something to the
effect that you have heard that the United States is talking
about nuclear testing, and I do not know quite what you said,
but if you said that, it would be not correct. The President
has indicated that he supports the moratorium. There have been
no utterances by anyone that I know of in the administration
about the subject of nuclear testing, and I would not want
someone to leave the room with the impression that that is
under debate or consideration, because to my knowledge it is
not.

NO CHANGE IN CHINA POLICY

Second, with respect to the People's Republic of China, and
the things that are in the press on that subject, I had the
benefit of being out in Senator Domenici's home State for a
little vacation over the week and returned back to find the
press filled with stories about this.
I have checked with Secretary Powell and I have checked
with Dr. Rice, and the suggestion that the United States has or
is poised to approve of China's military and nuclear buildup
for some reason in exchange for something is simply not the
case, notwithstanding what people are reading in the press, and
I think, Senator Specter, you asked the question, and I know
Senator Feinstein, you asked the question, and all I can say
is, I have talked to the two people in foreign policy who work
very closely with the President on those issues, and that is
not the case.

OVERVIEW OF FISCAL YEAR 2002 BUDGET REQUEST

Mr. Chairman, when President Bush took office 7 months ago,
he made clear that one of his highest priorities would be to
address and arrest the decline in our Armed Forces and begin
working to build the 21st Century military that can help deter
aggression and extend peace and prosperity. To begin reversing
the effects of close to a decade of overuse and underfunding,
the President first submitted the 2001 supplemental budget
request which was approved by Congress earlier this year, and
we thank you for that, and a 2002 budget request followed. It
includes the largest increase in defense spending since the
mid-1980's.
This is an important step in getting the Department out of
a hole that a long period of underfunding has put us in, and it
is a significant investment of taxpayer's money, as the members
of the committee have pointed out.
The 2002 budget includes funding for military quality of
life, increases in miliary pay, housing, and health care, for
training, for readiness, for maintenance and repair of aging
equipment, for modernization and transformation in the research
and development (R&D) area, and Mr. Chairman, we need every
nickel of it.
The budget request does not solve the problems of the
Department. It begins to repair the damage that has been done
by a long period of underfunding and overuse. In addition, it
lays the foundation for the effort to transform the Armed
Forces for the 21st Century, and as we work to transform the
Armed Forces, we are working at the same time to try to improve
the way the Department of Defense functions, and to encourage a
culture of greater innovation, to turn waste into weapons, to
show respect for the taxpayer's dollars, and to speed the
utilization of new technologies to help keep the peace into the
decades ahead.

BUDGET PRIORITIES

As you consider the 2002 budget, let me briefly share some
of our priorities with you and how they relate to the request
that is before you. As we prepare for the new challenges that
have been mentioned in some of the opening comments, certainly
U.S. homeland defense takes on an increasing importance, and I
quite agree with Senator Feinstein's comment that the so-called
asymmetrical threats are the more likely threats in the period
ahead, and they run across the spectrum, from terrorism, cruise
missiles, to ballistic missiles, to cyber attacks, and
certainly the Department needs to address all of those issues.
The proliferation of weapons with increasing range and
power in the hands of multiple potential adversaries means that
the coming years will see an expansion of the risks to U.S.
population centers, as well as our allies and friends. We will
face new threats, as has been pointed out.
Today, we are vulnerable to missile attack. That is a fact,
and as has been suggested by the chairman, weakness is
provocative. It invites people into doing things that they
otherwise would avoid.
If a rogue State, and you can pick any one you might like,
has that capability and demonstrates that capability, there is
no question but that a terror weapon has the effect of
terrorizing and altering behavior, regardless of whether or not
it is used, and simply its existence forces people to change
their behavior.
Think, in trying to forge an international coalition and
stop an act of aggression, by--for example, when Iraq went into
Kuwait, if we had known beforehand that Iraq had a nuclear
capability and a ballistic missile capable of reaching Europe
and the United States, it would have been difficult, if not
impossible to fashion such a coalition.
The alternatives a country is faced with, absent the
ability to defend, are several. One is to acquiesce, and allow
a country to take over their neighbor. A second is to preempt,
and that is a very difficult decision for a country, and a
third is to put your population at risk and then retaliate
after you have lost a large number of people, if that happened
to be the case.
What is at stake here is not only protecting the American
people and our allies from attack, although that is critical.
What is also at stake, in my view, is the ability to project
force to defend peace and freedom in this world. Winston
Churchill once said, I hope I shall never see the day when the
forces of right are deprived of the right of force, and that is
precisely what rogue States intend, to deny the forces of right
the ability to stop aggression and defend freedom in the 21st
Century.
The President's request for missile defense is less than 3
percent of the 2002 budget. For so-called national missile
defense, that is to say, separating theater missile defense
from it, it is something like 1\1/2\ percent of the budget.
More than 98 percent of the budget is for other priorities,
including the other so-called asymmetrical threats.
But let there be no doubt, the threats are real. President
Bush is committed to ensuring that we develop the capability to
contribute to peace, stability and freedom, and without such
capabilities the United States could be driven inward, at great
risk to the world economy.
Senator Kohl mentioned the reason why a budget request with
an increase in a time of peace makes sense. If you think about
it, the world economy is what enables the American people to go
about their business and have economic opportunities and
provide for their families, that we are a participant in that.
If we see an instability injected into the world economy,
because of war or conflict or because of the fear of war or
conflict, the American people lose that. We lose that, all the
things that we value, and that our fellow citizens value.
We have to remember that what underpins a prosperous
economy is peace and stability, and what provides peace and
stability at this time in the history of the world is the
United States of America's capabilities. We are spending less
than 3 percent of the gross national product of the United
States on defense.
When I came to Washington in 1957, President Eisenhower was
President, and during that period, my early years in Congress,
we were spending 10 percent of the gross national product on
defense, and we could do it just fine. Today, we are down below
3 percent of the gross national product, and the idea that we
cannot afford to spend 3 percent of the gross national product
to provide the peace and stability that makes prosperity and
economic opportunity across this globe possible I think is not
debatable. We can.
As you know, we are working to reach an understanding with
Russia by the time our development programs begin to bump up
against the constraints of the ABM Treaty. I do not know if we
will be able to reach an agreement or not, but certainly
everyone is working on it. The President is, Secretary Powell
is, I am. I have had meetings, and will have more this month,
and that is our hope.
The question as to whether or not they will be successful I
would submit partly depends on the perceptions that the
Russians have, and to the extent the Russians develop a
perception that the United States is not interested in going
forward and providing defense against ballistic missiles, or
that we are split on that issue, obviously it is in their
interests to not come to any agreements with us, and so I would
hope that we would go through this period strengthening the
President's position in his negotiations with the Russians so
that we can move beyond and establish a new framework for the
relationship between the United States and Russia, a
relationship that is based not on the cold war, and not on
mutual assured destruction, but is based on the future and the
relationship that makes the most sense between two countries
that are, indeed, not enemies.
The 2002 amended budget moves us on a path towards
transformation by undertaking urgently needed immediate repairs
on our existing force, and by investing now in some of the
transformational technologies and R&D that will be needed.
Regrettably, we can't build the 21st Century force unless we
first begin repairing the damage that has been done by
overdrawing the peace dividend in the 1990's. We spent much of
the 1990's living off investments of the 1980's, and we allowed
our military capabilities to be slowly degraded, as we overused
a shrinking and underfunded force.
To their enormous credit, America's dedicated servicemen
and women dutifully did more with less, putting off needed
investment in training, infrastructure, maintenance,
procurement, to keep up with the proliferation of missions. A
number in Congress and certainly on this committee have worked
hard to give them the resources they need, but notwithstanding
those efforts, the reality was that they were overworked and
underfunded over a sustained period, and the result has been a
serious backlog in maintenance, deferred procurement, a
deteriorating infrastructure, and lost opportunities for
transformation.
For example, basic research funding has declined 11 percent
since 1992, research, development, test and evaluation (RDT&E)
funding levels have declined by 7.4 percent in the same period,
the deferred maintenance for DOD facilities, which is the
cumulative amount that has not been funded from year to year,
currently stands at $11 billion, DOD is failing to meet the
current standard to maintain a steady state of 310 ships, as
Senator Cochran mentioned. Without added ship construction, it
is headed towards an unacceptable steady state of 230 ships,
which is obviously unacceptable.
Every year the U.S. Government puts off addressing these
problems the cost of catching up grows worse. We need to change
it. In addition to the various risks associated with our
ability to execute war plans, the Department must also develop
the ability to take into account the risk to personnel, the
risk to modernization if we fail to transform. We have to
develop the skill and the ability to weigh an expenditure today
for modernization of a weapon against the risk of being in a
conflict 3 years from now and being struck deaf, dumb, and
blind because we did not make the proper investments in
information technologies and interoperability and antijamming
capabilities. That is not easy to do, but that is the process
we are going through.
In February, the President proposed a $310.5 billion
baseline budget that includes $4.4 billion in new money for
military pay, housing, and R&D. The request before you raises
that investment to a total of $328.9 billion. That is an
increase of $18.4 billion in budget authority. Taken together,
this is $22.8 billion in new money for the Department in 2002.
Among other things, the request increases spending for
military personnel level of $75 billion in 2001 to $82 billion,
an increase of 9 percent, including funds for needed targeted
pay raises and improved housing allowance. It requests $4 plus
billion to improve the quality of family housing, a 12 percent
increase. It requests the congressionally required increased
spending on defense health from the 2001 level of $12 billion
to $7.9 billion, an enormous 48 percent increase of $5.8
billion.
I was asked, why such a large increase in health? The
answer is, the Congress passed legislation providing for a set
of health provisions in one case, for example, for the over-65
lifetime health, and the estimates are very difficult to make,
but the cost of that program, while difficult to estimate, is
clearly enormous, and it is going to have a significant effect
on the defense budget over the coming period.
The budget before you begins to reverse the neglect of
maintenance and repair requested increased spending on
operations and maintenance from a 2001 level of $107 billion to
$125 billion, a 16-percent increase. It fully funds the Navy
and Air Force op tempo costs. The Army made a decision to be
slightly below full funding with respect to tank hours and
helicopter hours.
The reality is that we cannot transform the Armed Forces
unless we also transform the way we do our business in the
Department. The Department used to be a technological leader in
innovation. Today, with few exceptions, the Department can
barely keep up with the pace of technological change, much less
lead. Since 1975, the Department has doubled the time it takes
to produce a weapons system at a time when new generations of
technology have shortened the years down to just 18 to 24
months. This virtually guarantees that many of DOD's newest
weapons will be one or more technology generations behind the
day they are fielded. The combination of internal
inefficiencies and external constraints on the Department
together ensure that DOD operates in a manner that is too slow,
too ponderous, and too inefficient, and that whatever it does
ultimately produce tends to be late and not respectful of
taxpayers dollars.
The situation really cannot continue, in my view. In the
coming weeks, we will be laying out a plan to address the waste
and duplication of effort in the Department. We will undertake
initiatives to encourage cost savings to foster the culture of
intelligent risk-taking and begin applying modern business
practices to the way the Department does its business. We will
outline specific cost savings that we are undertaking
unilaterally, as well as some structural reforms that will help
lay the groundwork for further savings in the years ahead.
While there are many things we are doing unilaterally in
the Department, we will also need some help from Congress. For
example, we will need support for our so-called efficient
facilities initiative, requesting congressional authorization
for a single round of miliary base closures and realignments in
2003.
Since the end of the cold war, the number of men and women
in uniform has come down 40 percent, but there has not been a
parallel reduction in facilities. People who have studied the
problem conclude that we have from 20 to 25 percent more
infrastructure than we need to support the force. That excess
infrastructure is costing us unnecessary billions of dollars
every year in unneeded rent, utilities, and maintenance. We
estimate that after the first few years, this program could
save us as much as $3.5 billion annually, money that could be
better spent on high priorities like readiness, modernization,
and quality of life for the troops.
We also need your support for the proposed revitalization
of the B-1 bomber fleet. By reducing the fleet from 93 to 60
aircraft, and concentrating the remaining aircraft in two of
the largest B-1 bases, rather than in the five bases where they
are currently scattered around today, we can free up funds for
the Air Force to rapidly modernize the remaining 60 aircraft
with new precision weapons, self-protection systems, and
reliability upgrades, so that they can remain viable for use in
future conflicts.
There has been a good deal of opposition to this proposal,
but it is the right thing to do, and we need to get on with it.
By undertaking both unilateral reforms, and reforms in
cooperation with Congress, we can bring the Defense Department
to a more effective institution.
Mr. Chairman, we need to do it because of the harsh reality
that the unmet needs of the U.S. Armed Forces exceed the funds
available to address them, so unless, together, we can turn
waste into weapons, we will have to come to you next year and
the year after that asking you to appropriate still more of the
taxpayer's dollars to meet unmet needs, many of which could
have been paid for by trimming and cost savings from within.
Neither the transformation of the Armed Forces nor the
transformation of the Department is going to be easy. Change is
hard, and if anyone does not believe it, just look at the
turmoil that it can cause when one proposes change. A
philosopher once wrote that there is nothing more difficult to
plan or more dangerous to manage than the creation of a new
system, for the initiation has the enmity of all who would
profit by the preservation of the old institution, and merely
the lukewarm defense of those who would gain from the new.
We really have no choice. We are entering a world where new
threats can emerge suddenly. We need to have a military that is
sized and structured to meet those challenges. We need a
Department that is innovative, flexible, and forward-thinking
if we are to meet those new and different threats. The time has
come to reinvigorate the morale and readiness of the force and
prepare for the new and different challenges in this new and
still dangerous and untidy world.

PREPARED STATEMENT

Mr. Chairman, I thank you for the opportunity to be here,
and look forward to responding to questions.
[The statement follows:]

PREPARED STATEMENT OF HON. DONALD H. RUMSFELD

Mr. Chairman, members of the Committee, I thank you for this
opportunity to meet with you this morning.
When President Bush took office some seven months ago, he made
clear that one of his highest priorities would be to arrest the decline
of our armed forces and begin building a 21st Century military that can
help deter aggression and extend peace and prosperity well into the new
century.
To begin reversing the effects of close to a decade of overuse and
under-funding, the President submitted first a 2001 supplemental budget
request, which was approved by Congress earlier this year, and more
recently, a 2002 budget request that includes the largest increase in
defense spending since the mid-1980s. This is an important step in
getting the Department out of the hole that long period of under-
funding has put it in, and a significant investment of the taxpayers'
money. But it is a step desperately needed by the men and women in
uniform.
The 2002 budget includes critical funding for military quality of
life--increases in military pay, housing, and health care. It includes
funding for training and readiness, for maintenance and repair of our
aging equipment, for modernization and transformational R&D.
Mr. Chairman, we need every nickel of it.
This budget request not only begins to repair the damage done by a
long period of under-funding and over use, it lays the foundation for
the effort to transform our Armed Forces for the 21st Century.
Earlier this year, the President asked the senior civilian and
military leaders of the Department to review the U.S. defense strategy,
to propose ways we could reinvigorate the morale of our men and women
in uniform, improve readiness to meet current threats, and achieve
transformation of the forces to meet the new and different security
challenges of the 21st Century.
That effort is nearing completion:
--The Congressionally mandated Quadrennial Defense Review will be
finished this month. It has been the subject of extensive and
fruitful discussion by the senior DOD civilian and military
leadership. The report will be presented to the President and
the Congress in the coming weeks.
--The annual Defense Planning Guidance (DPG) was issued last week. It
will help guide the Department as work goes forward to prepare
the President's 2003 budget.
--A new National Defense Strategy has been developed and discussed
with the President, along with a new approach to planning for
and sizing forces. This new approach focuses less on specific
regional conflicts, and more on building a portfolio of U.S.
military capabilities to meet the wide range of contingencies
we are likely to face in the future. Because we cannot
anticipate who might threaten us in the future, but can predict
with some confidence the means an adversary is likely to
employ, we will likely be shifting from a ``threat-based'' to a
``capabilities-based'' approach to long-term planning.
--The new force-sizing construct we have developed and discussed with
the President will replace the two Major Theater War construct
that has guided us since the end of the Cold War. The new
construct would prepare forces to defend the U.S., deter in
four critical regions, prevail in two overlapping conflicts,
while leaving the President the option to commit forces in
either of those conflicts to impose our will on the adversary--
including regime change and occupation.
--The Congressionally-mandated Nuclear Posture Review is well along,
and will be issued this fall. It will recommend a path to
fulfill President Bush's pledge to achieve a strong, credible
deterrent with the lowest number of nuclear weapons consistent
with U.S. national security needs and U.S. alliance
commitments.
--We have re-focused and revitalized the missile defense program,
shifting from a single-site ``national'' missile defense
approach, to a broad-based research, development and testing
approach that will explore many previously untested
technologies and approaches, and lead to the development and
deployment of defenses able to intercept missiles of various
ranges in various stages of flight. This will include the
capability to defend not only the American people, but our
friends, allies and deployed forces as well, from limited
threats.
--At the same time, we are working with Russia to develop a new
strategic framework for the 21st Century--one that will put
behind us the hostilities and institutions of the Cold War,
including the nuclear balance of terror and the ABM Treaty that
helped enshrine that balance of terror as the foundation of our
relationship.
--And, as we work to transform the Armed Forces for the 21st Century,
we are working at the same time to transform the Defense
Department--to encourage a culture of greater innovation, to
turn waste into weapons, to show respect for the taxpayer's
dollars, and to speed the utilization of new technologies to
help keep the peace into the decades ahead.
Mr. Chairman, these efforts will help us transform our Armed Forces
for the 21st Century. But let me be clear: we cannot wait until the
2003 budget cycle to get started--the needs are too great and too
urgent to delay.
We need your support for the President's 2002 budget. We need your
support for critical funds to repair aging planes, tanks and ships, to
fix collapsing roofs and fund training and readiness for our troops.
The budget before you lays the foundation for the transformation of
U.S. Armed Forces, while at the same time providing immediate and much
needed funding for critical priorities contained in the new defense
strategy--including funds to address risks to people, modernization and
transformation that have been neglected.
So as you consider the 2002 budget, allow me to briefly share some
of those priorities with you, and how they relate to the 2002 budget
request before you.
As we prepare for the security challenges of the 21st Century, U.S.
homeland defense takes on increasing importance. For most of U.S.
history, we have been blessed with the security advantage of excellent
geography, friendly neighbors and a vast ocean buffer. But the Cold
war, with its threat of missile and bomber strikes against our
territory, ended our geographic advantage. The end of the Cold War has
not restored it.
To the contrary, the proliferation of weapons with increasing range
and power into the hands of multiple potential adversaries means that
the coming years will see an expansion of the risks to U.S. population
centers--as well as those our allies. We will face new threats--from
satchel bombs, cruise missiles, and ballistic missiles of varying
ranges.
This is a major change in our circumstance. We can no longer count
on future conflicts remaining largely contained within their region of
origin far from our shores. States unfriendly to the U.S. are working
aggressively to develop nuclear, chemical and biological weapons of
mass destruction and a variety of means to deliver them. They are doing
so because they want to have the ability to blackmail us by having the
capability to strike our people where they live and work--as well as
U.S. friends, allies and deployed forces around the world.
If we remain vulnerable to missile attack, a rogue state that
demonstrates the capacity to strike the U.S. or its allies could have
the power to hold our people hostage to nuclear or other blackmail.
Forging an international coalition to stop an act of aggression by such
a state would be difficult if not impossible. Without missile defense,
the alternatives would be to do nothing and thereby let aggression
stand, to repel the aggression (and thereby put our populations at
risk), or to attempt to preempt, a difficult decision for any country.
What is at stake here is not just protecting the American people
and our allies from attack--although that is critical; what is at stake
is the U.S. ability to project force to defend peace and freedom in
this new century.
Winston Churchill once said: ``I hope that I shall never see the
day when the forces of right are deprived of the right of force.'' That
is precisely what rogue states intend--to deny the forces of right the
ability to stop aggression and defend freedom in the 21st Century.
If we are to remain engaged in the world, the capability to defend
the United States from a range of new asymmetric threats must be a high
priority.
This is why the President has requested $8.3 billion for all types
of ballistic missile defense. We need Congress to fully fund the
President's budget request--a budget that also contains critical funds
to deal with terrorism, force protection, cruise missile and protection
of our space assets. The safety of our people, our friends, allies, and
deployed forces--and our ability contribute to the peace and stability
that underpin world prosperity--depend on your approval of these funds.
The President's request for missile defense is less than 3 percent
of the 2002 amended budget. More than 97 percent of the defense budget
goes to other critical priorities. It is a modest, but prudent,
investment--especially when compared to the significant investments
that rogue states like Iran, Iraq, Libya and North Korea are making.
Let there be no doubt: The threats are real. President Bush is
committed to ensuring we develop the capability to contribute to peace,
stability, and freedom. Without such capabilities, the U.S. could be
driven inward at the great risk to the world economy; for without peace
and stability, the world economy is threatened.
As you know, we are working to reach an understanding with Russia
by the time our development programs bump up against the numerous
constraints of the ABM Treaty.
Mr. Chairman, I recently returned from Moscow, where I met with my
Russian counterpart and others discussing these matters. I believe that
we may be able to reach an understanding with Russia--but let there be
no doubt, doing so will be difficult and success is by no means
assured.
Our discussions with Russia will continue in the months ahead.
Secretary Powell will meet with his counterpart next month in
Washington. I will meet with my counterpart later this month in Italy.
And President Bush will be meeting with President Putin in China in
October and in Crawford, Texas, in November.
Congress can help determine the success or failure of these
discussions. If Congress shows the same resolve as the President to
proceed seriously with research, development, testing and deployment of
missile defense, it will significantly improve the prospects to achieve
a cooperative outcome with Russia.
If Congress does not approve the President's request for missile
defense--if funding is cut or restrictions attached--Russia could get
the mistaken impression that by dragging its feet it will be able to
prevent development of U.S. missile defenses. This would harm our
chances of achieving a cooperative solution.
We may or may not succeed in these discussions with Russia. But let
us not fail because we send them signals of disunity or lack of
resolve.
Mr. Chairman, The 2002 amended budget starts us on a path toward
transformation by undertaking urgently needed, immediate repairs to our
existing force, and by investing now in some of the transformational
technologies and R&D that we will need for the 21st Century force. We
cannot build that 21st Century force unless we first begin repairing
the damage that was done by overdrawing the peace dividend of the
1990s.
We spent much of the 1990s living off the investments of the 1980s.
We allowed our military capabilities to be slowly degraded as we
overused a shrinking and under-funded force. To their enormous credit,
America's dedicated servicemen and women dutifully did more with less--
putting off needed investment in training, infrastructure, maintenance,
and procurement to keep up with a proliferation of missions. A number
in Congress--and on this Committee--worked hard to give them more
resources. But notwithstanding those efforts, an imprudent policy of
overworking and under-funding our troops continued.
The result has been a critical backlog in maintenance, deferred
procurement, a deteriorating infrastructure and lost opportunities for
transformation.
For example, basic research funding has declined by 11 percent
since 1992, and RDT&E funding levels have declined 7.4 percent in the
same period. The deferred maintenance for DOD facilities--the
cumulative amount that has not been funded from year to year--currently
stands at some $11 billion. DOD is failing to meet the current standard
to maintain a steady state of 310 ships, and, without added ship
construction, is headed towards a clearly unacceptable steady-state of
230 ships. Every year the U.S. government puts off addressing these
problems, the costs of ``catching up'' grow worse.
We need to change this. In addition to the various risks associated
with our ability to execute war plans, the Department must also take
into account the risks to personnel, to modernization and to
transformation when determining how we allocate resources. And we need
the cooperation of Congress in this effort.
The President's 2002 budget proposes immediate investments to
address the neglect of these critical areas and to begin stabilizing
the force.
In February, the President proposed a $310.5 billion baseline
budget that included $4.4 billion in new money for military pay,
housing, and R&D. The request before you raises that proposed
investment further to a total of $328.9--an increase of an additional
$18.4 billion. Taken together, President Bush has proposed $22.8
billion in new money for the Department of Defense in 2002.
Among other things, the President's budget:
--Requests increased spending on military personnel from the fiscal
year 2001 level of $75.4 billion to $82.3 billion--an increase
of $6.9 billion--including funds for a needed targeted pay
raise, and an improved housing allowance.
--Requests $4.1 billion to improve the quality of family housing--an
increase from $3.6 billion in the fiscal year 2001 budget.
--Requests the Congressionally required increased spending on defense
health from the fiscal year 2001 level of $12.1 billion to
$17.9 billion--an enormous 48 percent increase of $5.8 billion.
--Begins to reverse the neglect of maintenance and repair, requesting
increased spending on operations and maintenance from the
fiscal year 2001 level of $107.9 billion to $125.7 billion
today--an increase of $17.8 billion.
--Fully funds Navy and Air Force OPTEMPO costs.
--Plants signposts for 21st Century transformation, proposing an
increase in spending on RDT&E from the fiscal year 2001 level
of $41 billion to $47.4 billion--an increase of $6.3 billion.
This budget also includes a commitment ``realistic budgeting'' in
order to stop the pattern of annual ``emergency'' supplementals. For
example, health care costs in the country are increasing at an annual
rate of 13 percent. But the fiscal year 2001 budget provided just $12.1
billion for military healthcare--falling short of what was needed to
cover that rate of increase by $1.4 billion.
By contrast, this 2002 budget proposes $17.9 billion for defense
health--a $5.8 billion increase--that should allow us to cover a
probable 12 percent growth in the costs of medical care and a likely 15
percent growth in the cost of pharmacy purchases. This means that, for
the first time in years, the fiscal year 2002 budget should fund a
realistic estimate for military health care costs.
Mr. Chairman, these are important investments. But let me be clear:
this budget won't get us out of the hole we are in. Today, we are
proposing a $328.9 billion defense budget for fiscal year 2002. But to
keep the department going next year--fiscal year 2003--on a straight-
line--no improvements, just covering the costs of inflation and
realistic budgeting--we will need a budget of $347.2 billion. That is
an $18.3 billion increase before including the additional investment
that will be needed to modernize and transform the force for the
future.
The point, Mr. Chairman, is that it took the U.S. government years
to drive the Department of Defense into this hole, and, I regret to
say, it is going to take us years to get out. It is a lot easier to do
things right in the first place than it is to straighten things out
after they've been done badly. But, that is the hand we've been dealt,
and we need to get about the task of fixing it.
We need your support for the President's proposed increases in pay,
housing, health care and quality of life for our men and women in
uniform. We need your support to fund the increased cost of flying
hours, tank miles and steaming hours for our forces. We need your
support to begin to work off the backlog of facilities maintenance and
repair, for weapons system maintenance and repair, for modernization,
and for transformational research and development. These important
investments will help lay the groundwork for 2003 transformation
budget.
But we cannot transform our Armed Forces for the 21st Century
unless we also transform the way the Department of Defense does
business.
This Department used to be a technological leader--an engine of
innovation. Today, with few exceptions, DOD can barely keep up with the
pace of technological change, much less lead.
Consider: Since 1975 the Department has doubled the time it takes
to produce a weapons system--at a time when the pace for new
generations of technology has shortened from years to just 18 months.
This virtually guarantees that many of DOD's newest weapons will be one
or more technology generations old the day they are fielded.
The combination of internal inefficiencies and external constraints
on the Department together ensure that DOD operates in a manner that is
so slow, so ponderous, and so inefficient that whatever it ultimately
does produce is late and wasteful of taxpayer dollars.
At the same time, DOD's processes and regulations have grown so
onerous, that a number of commercial businesses--developing needed
technologies--prefer not to do business with the Department.
If DOD is no longer the engine of innovation in the 21st Century,
and if many of the private sector companies that are the engines of
innovation prefer not to do business with us, how can we effectively
transform to meet the challenges of the 21st Century?
This situation cannot stand. That is why, in the coming weeks we
will lay out a plan to address the waste and duplication of effort at
the Department. We will undertake initiatives to encourage cost
savings, to foster a culture of intelligent risk taking, and to begin
applying modern business practices to the way the Department does its
business. We will outline specific cost savings that we are undertaking
unilaterally, as well as structural reforms that will help lay the
groundwork for further savings in the years ahead.
Our efforts will be guided by a new Senior Executive Council that
includes the Undersecretary of Defense for Acquisition, Technology and
Logistics Pete Aldridge, and the three Service Secretaries: Secretary
of the Army Thomas White, Secretary of the Navy Gordon England, and Air
Force Secretary James Roche. They are leading a new effort to bring the
Department and its business practices into the 21st Century.
But while there are many things we are doing unilaterally to
transform the Department, we cannot succeed without help from Congress.
For example, we need your support for our Efficient Facilities
Initiative of 2001 (``EFI''), requesting Congressional authorization
for a single round of military base closures and realignments in 2003.
Since the end of the Cold War, the number of men and women in
uniform has come down over 40 percent. But there has not been a
parallel reduction in facilities. People who have studied the problem
conclude that we have roughly 20-25 percent more infrastructure than we
need to support the force. That excess infrastructure is costing
unnecessary tens of billions of dollars every year in unneeded rent,
utilities, and maintenance. We estimate that after the first few years,
EFI could save as much as $3.5 billion annually--money that could be
better spent on priorities such as readiness, modernization, and
quality of life improvements for our troops.
We need your support for the proposed revitalization of the B-1
bomber fleet. By reducing the fleet from 93 to 60 aircraft,
concentrating the remaining aircraft in the two largest B-1 bases
(rather than the five bases where they are scattered today), we can
free up funds for the Air Force to rapidly modernize the remaining
aircraft with new precision weapons, self-protection systems, and
reliability upgrades so that they can remain viable for use in future
conflicts. There has been a great deal of vocal opposition to this
proposal, but it is the right thing to do and we need to get on with
it.
This reform will add some $1.5 billion of advanced combat
capability to today's aging B-1 fleet over the next five years--without
requiring additional dollars from the taxpayers. It would revive the B-
1 force, so that it can provide America with the kind of all-weather,
long-range strike capabilities that will be critical in the 21st
century.
Mr. Chairman, this is the kind of efficiency we owe the American
taxpayers. Congressional support for this plan is needed to send an
important signal to all of the Services, and give them an incentive to
find further cost savings by telling them that such efforts will be
rewarded with freed up funds to improve capabilities, rather than
simply being bombarded with complaints for their efforts.
The failure of this proposal, by contrast, would send a harmful
signal across the defense establishment that if the Services do step
forward to find innovative ways to save money and to increase
efficiency, not only it will be a waste of their time and effort, but
it will lead to hostility to them and to the Department. That is not
the message we want to send if we want to be respectful of the
taxpayers' dollars and if we truly want to strengthen our national
security.
We also need your support for the proposed elimination of the
Peacekeeper missile. The previous Administration's 2002 budget included
$100 million to fund operations, maintenance, and personnel support for
the Peacekeeper, plus $5 million more for procurement support in 2002--
but then it included not a dollar for follow-on funding for 2003 or
beyond, either to sustain the missile squadron, or to retire them.
Rather than continue spending taxpayer's money on an unneeded
system, we have proposed deactivating the Peacekeeper system over a
five-year period. Doing so should avoid costs of $320 million during
the deactivation, and then an additional $150 million annually
thereafter.
Another area where we may also come to you with proposals for
reform is in officer and enlisted career lengths. We're losing good
people sooner than we need to. Today, we have policies that have the
effect of uprooting enlisted personnel and families every few years to
move them to new assignments--and then, after training them and
benefiting from their fine services, half of them leave the service
when they still have so much to offer. Similarly, we bring in
commissioned officers, train them, bounce them around from assignment
to assignment every two or three years, that they end up skipping
across the top of the waves so fast they don't have time to learn from
their mistakes. And then we have them retire in their late 40s and
early 50s--while still in their prime. No private enterprise could
survive functioning this way.
By undertaking both unilateral reforms, and reforms in cooperation
with Congress, we can and will bring the Defense Department into the
21st Century. As President Bush told the Veterans of Foreign Wars two
weeks ago, ``We're not only going to spend more money on national
defense--we're also going to spend it more wisely.''
Mr. Chairman, we need to do so because the harsh reality is that
the unmet needs of the U.S. Armed Forces far exceed the funds available
to address them. So unless together we can turn waste into weapons, we
will have to come to you next year and the year after that, asking you
to appropriate still more of the taxpayers money to meet urgent needs--
many of which could have been paid for by trimming cost savings from
within.
Neither the transformation of U.S. Armed Forces nor the
transformation of the Department will be easy. Change is hard. A
philosopher once wrote: ``there is nothing more difficult to plan . . .
or more dangerous to manage than the creation of a new system. For the
initiation has the enmity of all who would profit by the preservation
of the old institution and merely the lukewarm defense of those who
would gain by the new.''
We have no choice. We are entering a world where new threats can
emerge suddenly. We must have a military sized and structured to meet
those challenges. And we must have a Department that is innovative,
flexible and forward thinking if we are to meet those new and different
threats.
To accomplish this, we need your help. As I said at the outset, we
are in a hole. And the first rule of holes is; ``when in a hole, stop
digging.'' But each year we put off these critical investments, every
year we ``kick the can down the road'', we are digging ourselves deeper
and deeper into that hole. Each year we put off these investments, it
will be vastly more difficult--and certainly much more expensive for
the taxpayers--to fix the problems. It's like having a credit card--if
you pay only the minimum every month, the interest will accumulate and
the cost of digging out of debt gets bigger and bigger every year. That
is what we have been doing to our Armed Forces.
Changing that requires a new strategy, a new force sizing
construct, and new investments. We've been living off the investments
of the 1980s for too long, to the detriment of our men and women in
uniform. We have given insufficient attention to the risks to
personnel, to modernization and to transformation.
The time has come to change that--to reinvigorate the morale and
readiness of our force, and to prepare for the new and different
challenges of this new and still dangerous century. The necessary first
step to doing that is for Congress to approve the President's 2002
defense budget.
Thank you.

Senator Inouye. I thank you very much, Mr. Secretary. May I
now recognize General Shelton?
STATEMENT OF GENERAL HENRY H. SHELTON, USA, CHAIRMAN,
JOINT CHIEFS OF STAFF
General Shelton. Thank you, Chairman Inouye, Senator
Stevens, and other distinguished members of this committee.
Once again, it is my privilege to appear before you today and
report to you on the state of America's Armed Forces. I would
like to highlight some key priorities from the written
statement that I have provided for the record, and then move
right into your questions.
Mr. Chairman, I have been a soldier now for 38 years, and
as I reflect on the state of the military today, I am reminded
of three important lessons that I have learned over those 38
years. The first is that in this legal profession of ours, our
profession of arms, there simply is no substitute for being
ready when the Nation calls, as you pointed out so eloquently
in your article that appeared in Defense News this past week.
The second is that the military is about people, about our
great men and women in uniform and their families. They have
never let America down, and they never will. We must properly
take care of their needs.
And third, we must always anticipate the threats of
tomorrow, even as we deal with the challenges of today.
I share these lessons with you because we must not let the
spirit of relative peace, as Senator Kohl commented on a while
ago, and also relative period of prosperity, lead us down the
path of complacency and blind us to a fundamental truth, and
that is that the furies of history will return, and they will
produce destruction and violence at a time and at a place and
in a manner that we probably will not expect. We must therefore
remain vigilant, and we must remain prepared.
Today, our military forces, and I refer to active, Guard,
and Reserve, remain the best trained, best equipped, and most
capable in the world, but before we congratulate ourselves, let
me also say about our readiness that our people and our forces
are experiencing some challenges which, if not addressed
quickly, may erode our present-day advantage, and I would like
to bring a number of these pressing issues to your attention.
First, if we should have to fight tomorrow, I am confident
that our frontline troops are trained and ready. However, it is
important to note that many other operational units are not as
ready. These include our combat service support units, our
strategic airlift fleet, our intelligence surveillance and
reconnaissance aircraft and assets, and our training bases, all
of which provide critical capabilities to our war-fighting
forces.
These units are in some cases suffering the consequences of
high op tempo, and the diversion of resources to sustain the
near-term readiness of our first-to-fight forces.
We are also a very busy force. Since 1995, DOD has
experienced a 133 percent increase in the number of personnel
that are committed around the globe, and these are real-world
operations, not exercises, and we are doing it with 9 percent
fewer people than we had in 1995. This high operational tempo
on segments of our force has increased the strain on our
people, and has highlighted the imbalance that we have today
between our strategy and our force structure.
Fixing this imbalance is part of the ongoing work in the
QDR, and of course one of the top priorities for all of the
Joint Chiefs, because the challenge will only increase over
time, and we owe it to our people to get it right. In fact,
through the QDR process, we are struggling to reconcile a
number of competing demands, near-term readiness, recruiting
and retaining our high-quality forces, long-term modernization
and recapitalization of our aging systems, transformation, and
yes, the infrastructure investments that are essential to
preserve the world's best war-fighting capability.
Secretary Rumsfeld commented on the fact that we have been
living off our procurement accounts from the 1980's, and the
smart reduction that we have had in the 1990's in our
procurement accounts means that the average age of most of our
major weapons systems continues to increase. Of course, many of
these systems have already exceeded their planned service life,
or are fast approaching it. Let me give you just a few
examples.
Our frontline air superiority fighter, the F-15, averages
17 years, only 3 years away from the end of its original design
service life. Our airborne tanker fleet and our B-52 bomber
force are nearly 40 years old. Our intelligence, surveillance,
reconnaissance, and our electronic warfare aircraft such as the
RC-135, the Rivet Joint, the EP-3's, the P-3's, and our EA-6B
Prowlers, all critical to our war-fighting capabilities,
average between 19 and 38 years of service, and finally,
numerous helicopter platforms, going back to Senator Shelby's
comment, in all of our services have passed or are approaching
their original designed service life, and of course these
helicopters are a key part of our war-fighting capabilities in
each of the services.
In fact, most of the war-fighting platforms that I just
mentioned were fielded at a time when most of our kids were
listening to a group called Three Dog Night, they were
listening to it on the latest in technology, an 8-track tape
deck, while sitting in the seat of their Ford Pinto. Technology
has come a long way since then, and just like the 25-year-old
Pinto, our aging fleets of aircraft, ships, and vehicles are
requiring increased numbers of parts, and they are requiring
increased maintenance support.
Let me give you a few examples that have been provided by
our services, reflecting a recent trend with regards to our
aging fleets. Between 1995 and the year 2000, the Air Force's
F-15C model has seen a 38 percent increase in cost per flying
hour, and a mission-capable rate that has dropped from 81 to 77
percent. The Navy EA-6B Prowler has seen a 55 percent increase
in cost per flying hour, and mission capable rates that have
dropped from 60 percent to 56 percent, and the Army's M-1 tank,
at an average age of 14 years, has seen a 22-percent increase
in cost per operating mile, and a mission-capable rate drop
from 91 percent to 85 percent.
Now, while we have been successful, and I would even say
highly successful, in meeting the demands of current
operations, we have also been unable to significantly increase
our investment in procurement, as Secretary Rumsfeld mentioned,
in part due to the increasing costs associated with these
platforms. If we do not increase our efforts in procurement,
then we are left essentially with two choices. We can either
retire these aging systems, or we can continue to maintain the
old systems, resulting in increased costs, along with reduced
operational capability.
The bottom line is, I do not believe we can efficiently
sustain our current capabilities for much longer, much less pay
for ongoing efforts to modernize and transform without an
increase in resources.
But it is also important to remember these readiness issues
have a tremendous impact on our people as well, requiring them
to work harder and essentially do more with less, so let me now
turn to a discussion on how we can better support our greatest
asset, our men and women in uniform. Mr. Chairman, I believe
that we have made real progress in the past 4 years providing
long overdue support for our people, as well as for our
families, and I would like to express my personal thanks and
appreciation to the Congress and to this committee in
particular for your outstanding role in helping take care of
our troops.
Consider the following that we have accomplished: increases
in pay and allowances, pay table reform, Tricare improvements,
increased funding for housing, and making good on our health
care promise to our active force as well as our retirees. But
let me also say that I believe we need to sustain this momentum
to preserve the long-term quality and readiness of the force.
An important first step in this regard is a renewed effort to
eliminate the significant pay gap that still exists between the
military and the private sector.
A second related quality-of-life issue is the condition of
our vital infrastructure, which continues to decay at an
alarming rate. For quite some time now, budget constraints have
forced us to make some hard choices, and we have had to
redirect funds from military facilities and infrastructure
accounts to support readiness requirements.
A quality force deserves quality facilities, and that is
why I believe it is essential that we provide the resources
that are necessary to stop and reverse the deterioration at our
posts, our camps, our bases, and our stations. One way that
Congress can directly help is to support DOD's efficient
facilities initiative, to dispose of excess bases and
facilities.
Third, I would ask your support to help ensure that all of
our men and women in uniform, single, married, or
unaccompanied, are provided with adequate housing.
Unfortunately, this is not the case today. In fact, currently,
62 percent of our family housing units are classified as
inadequate, which means that an astonishing percentage of our
families are living in substandard housing. We simply cannot
let this situation continue.
Finally, the other program that will greatly enhance the
quality of life for our people is quality health care. Today,
one of the most valuable recruiting and retention tools that a
corporation can offer a workforce or a potential employee is a
comprehensive medical package. Our Armed Forces are no
different. For that reason, the Chiefs and I strongly urge the
Congress to fully fund the defense health program as a strong
signal that we are truly committed to providing health care for
our troops. I cannot think of a better way to renew the bonds
of trust between Uncle Sam and our service members and retirees
than this commitment to military health care, and to quality
health care.
With your continued support of these initiatives, I believe
we can sustain our quality force and ensure that America's best
and brightest continue to answer the Nation's call. They truly
represent our present and our future security.
Since my last testimony, we have been reminded of the human
element of national security in several profound ways. Last
December, two U.S. Army helicopters crashed during a nighttime
training mission in Hawaii, in Senator Inouye's home State.
Nine soldiers perished in that crash. Some asked, why would the
Army put their soldiers in harm's way, doing a dangerous
training mission in the black of night. The answer is, that is
what we do. We train for the most difficult missions that we
may be asked to carry out. We must know that when America's
interests are at stake, or when America's interests are
threatened, we will be ready to go, day or night, and that
failure is not an option.
Last March, five of our soldiers and one New Zealander were
killed during a nighttime training incident that took place at
Udori range in Kuwait during a close air support training
mission. Some may ask, why would you schedule such an event?
Why would aircraft be dropping live ordnance on a range in the
Kuwaiti desert? The answer is, because that is what we do. We
train our troops to launch their aircraft 24 hours a day, often
in unfamiliar surroundings, often with night-vision goggles,
and often in difficult weather, precisely because we do not
know where the next fight may take place and under what
conditions. We will ask that of our great soldiers, sailors,
airmen and marines.
We must know, however, that when America's interests are
threatened, we will be ready to go any time, day or night,
because failure is not an option, and that, in fact, is the
legacy of the honored dead that I have just mentioned.
We must work hard to minimize the risks to our great
volunteer force, but we must train the way we anticipate
fighting, and we will fight at night. I am very proud of the
performance of these men and women, and many thousands of other
individuals who proudly wear the uniform of our country. They
are, as they have always been, America's decisive edge. Indeed,
they are so good at what they do that unless there is an
incident or an accident, we rarely take notice of their daily
contributions to our national security. They sail their ships,
they fly their aircraft, they go on patrol quietly and
professionally, and America is safe and enjoying great
prosperity in part because of them.
Mr. Chairman, as we consider new budgets and new national
security strategies, and new ideas of transforming the force,
it is important that we always remember that the quality of
people in our military are critical to all that we hope to
accomplish, and if we take action today to ensure that our men
and women in uniform are properly taken care of, I am confident
that we will prevail, regardless of the challenges that we face
in the future.
We have an opportunity in the succeeding weeks and months
to build a foundation that will sustain the U.S. military
supremacy in the decades ahead. Our professional, highly
trained and motivated young Americans in uniform are counting
on us to make the right decisions. If we are successful, we
will help underwrite the continued peace and prosperity that
our Nation currently enjoys well into the future, and I would
submit that your support is needed now more than ever.
As this could be, Mr. Chairman, and I emphasize could be,
my last appearance before this committee, I would like to
express my profound gratitude for the opportunity to work with
all of you during the past 4 years, and I thank each of you and
Secretary Rumsfeld for your very kind words, and I can tell you
that coming from such outstanding public servants, as they did,
and such strong advocates for our troops, they mean a great
deal to me.
I have a great feeling about what we collectively have
achieved, and I also feel great about turning over the reins to
General Dick Myers, a superb warrior, and a visionary leader.
It has been my great honor to represent the hopes, the needs,
and the aspirations of our great American servicemen and women,
and I thank you for making your priorities their priorities.

PREPARED STATEMENT

Thank you very much, Mr. Chairman, and we look forward to
your questions.
[The statement follows:]
Prepared Statement of General Henry H. Shelton
It is an honor to report to the Congress today on the state of
America's Armed Forces. As every member of this committee knows, our
Nation is blessed with an unsurpassed warfighting force that has been
actively engaged over the past year supporting America's interests
around the globe. I am extremely proud to represent the young men and
women of our Armed Forces. They serve our country selflessly, away from
home and loved ones, and are frequently put in harm's way. They
personify America at its very best.
It is those young soldiers, sailors, airmen, and marines who will
fight tomorrow's wars with the strategy, force structure, doctrine, and
equipment that we develop today. For them to do what we ask--to remain
the best in the world--we must give them the best tools. This means
ensuring that they always have the resources necessary to be trained,
armed, and ready. It means properly compensating them today and
tomorrow. And, it means recapitalizing our weapon systems and
infrastructure, and modernizing the force to meet tomorrow's
challenges. As we consider the choices ahead, may we always remember
that our great people have the most at stake in the decisions that we
make here in Washington.
In this Posture Statement, I will address two broad topics: (1)
Sustaining a Quality Force, concentrating on those programs that are
critical to maintaining the force; and (2) Building Tomorrow's Joint
Force, what we are doing today to prepare for tomorrow's
challenges. deg.

SUSTAINING A QUALITY FORCE

America's best and brightest must continue to answer the clarion
call to serve if our Nation is to remain the strongest force for peace
and stability on the planet. It is the quality of our people that gives
us a decisive edge over our adversaries and to sustain this qualitative
edge we must support our personnel with continued investments in pay
compensation, health care, housing, and other quality of life programs.
Compensation Gains
A robust economy coupled with intense competition from the private
sector continues to challenge our ability to attract and retain the
very people needed to operate our increasingly sophisticated military
equipment. With Congressional efforts to bring military pay in line
with the civilian sector, the Employment Cost Index plus 0.5 percent
initiative, and the President's $1 billion plus-up to military pay, we
are moving in the right direction.
Indeed, as a result of compensation gains in fiscal year 2000 and
fiscal year 2001, we have made great strides toward improving the
standards of living for members of our Armed Forces. With the
significant support and help of this Committee, Congress, and the
Administration, the Fiscal Year 2000 National Defense Authorization Act
(NDAA) provided one of the largest pay raises in recent history,
instituted retirement reform, and implemented pay table reform.
That same level of outstanding support was evident in the fiscal
year 2001 NDAA which included a 3.7 percent pay increase and allowed us
to replace out of pocket (OOP) costs for off base housing to less than
15 percent. Moreover, the opening of the Thrift Savings Plan to
military members, the implementation of a monetary allowance for
military members currently receiving food stamps, and revising the
enlistment/retention bonus authority have also demonstrated to our
forces a commitment to their quality of life. Again, this helps us
attract and retain quality people.
It is important to emphasize, however, that we need to sustain the
momentum of the past two years. The pay raise slated for fiscal year
2002 and your continued support of our efforts to reduce OOP expenses
for housing to zero by fiscal year 2005 will further improve the
quality of life for our servicemembers and their families. This is not
only important for their well being, it is also critical to our efforts
to recruit and retain a quality force.
Military Health Care
One of the most valued recruiting tools any major corporation can
offer a potential employee is a comprehensive medical package. DOD is
no different. Congress and the Administration have done much over the
last year to address the health needs of our active duty and retired
servicemembers and their families. As in the civilian sector,
healthcare costs for the military community have continued to rise
rapidly. Passage of the fiscal year 2001 NDAA demonstrated Congress'
commitment to honor the promise to those currently serving and to those
who served honorably in the past. I appreciate the support of Congress
for this effort.
We are pursuing full funding of healthcare costs as a strong signal
that we are truly committed to providing quality healthcare for our
active duty military members, retirees and their families. This
commitment will have a profound impact on all who wear our uniform, and
will encourage those who are considering a military career. It is also
imperative that we fund healthcare benefits for retirees and their
families in such a manner that this funding no longer competes with
operations, force structure, and readiness. This will honor the
national commitment we made long ago to our military retirees, without
impacting the readiness and military capability of today's force.
Additionally, the Joint Chiefs are working with the Assistant
Secretary of Defense for Health Affairs in seeking business practice
improvements and implementing the new benefits identified in the fiscal
year 2001 NDAA. And, beginning in fiscal year 2002, TRICARE will pay
costs not covered by Medicare for over-65 retirees and their families.
Housing
Housing continues to be a core element in our efforts to improve
the quality of life for our service members. All our men and women in
uniform deserve adequate housing. The Services remain on track with
plans to eliminate inadequate housing for unaccompanied enlisted
personnel by 2008. The situation for family housing is more
challenging. Last year, the Service Family Housing Master Plans deemed
almost 61 percent of family housing units inadequate. The Services are
revamping their respective Family Housing Master Plans to revitalize,
privatize, or demolish these inadequate units by 2010.
Congressional support for DOD's three-pronged strategy to improve
family housing has been outstanding and is greatly appreciated. First,
the initiative to raise housing allowances to reduce out-of-pocket
expenses for our servicemembers has provided welcome relief to the
force. Second, creating smart partnerships with the private sector
makes defense dollars go further and effectively frees up resources to
revitalize existing housing. Finally, your continued efforts to fund
our construction and privatization programs will pay great dividends by
ensuring our servicemembers and their families can live in respectable
accommodations.
There is an inseparable, direct link between personal and family
readiness and our total force combat readiness. Your continued support
of these and other quality of life programs will provide substantial
returns in retaining not just the member, but also the family.

BUILDING TOMORROW'S JOINT FORCE

In this section, I present some of my thoughts on those actions we
are taking today, to build tomorrow's joint force. In my view, these
are the critical enablers for any new defense strategy designed to
confront the challenges of this 21st century.

Modernization
While recent funding increases have arrested the decline in current
readiness, our modernization accounts, which are critical to future
readiness, remain under funded. Solving this problem has become my most
urgent priority.
Modernization will help reduce our capability concerns by
leveraging advanced technology to improve interoperability. Also,
newer, technologically advanced Intelligence, Surveillance, and
Reconnaissance (ISR) collection assets, communications systems, and
logistics support systems will help reduce manpower requirements while
simultaneously improving the CINCs' warfighting capabilities.
Modernization is also necessary for improved operational flexibility
and to ensure that we retain a technological and qualitative
superiority on the battlefield.
We must modernize our force; however, we must not sacrifice current
readiness to do it.

Recapitalization of Force Structure
After the Cold War, we made a conscious decision to cut procurement
and live off the investments of the eighties as we reduced force
structure. Between fiscal years 1993-98, approximately $100 billion was
taken out of DOD procurement accounts. The 1997 QDR Report identified a
potentially serious procurement problem if we did not increase
investment in new platforms and equipment. A goal of $60 billion in
procurement was established as an interim target to recover from the
sharply reduced procurement spending in fiscal year 1993-98. Last year,
for the first time, this interim goal was achieved.
However, several recent studies, to include one by the
Congressional Budget Office, have concluded that $60 billion is not
sufficient to sustain the force. Since the QDR will determine the
strategy and size of the force, I cannot give you a precise
recommendation on the additional amount required. What is clear today
is that we must accelerate the pace of replacing our aging and worn
systems if we are to deliver the right capability to meet future
challenges. We simply cannot continue to defer procurement and continue
our usage at existing rates if we expect our force to meet all of our
21st century commitments.

Recapitalization of Infrastructure
Our vital infrastructure is decaying. The understandable desire for
a post-Cold War peace dividend forced us to make hard choices that
redirected funds from military facilities and infrastructure accounts
to support immediate readiness requirements. Years of belt-tightening
have increased the risk of facility failures and have added to the
costs of upkeep.
Within civilian industry, the replacement, restoration or
modernization of physical plant assets is accomplished in roughly a 50-
year cycle. The rate of investment in DOD infrastructure has fallen to
a level that requires over 100 years for recapitalization. We must find
the resources to accelerate the recapitalization of our infrastructure
to avoid further damage and degradation. A sustained period of
increased funding is required to develop a modern infrastructure
capable of supporting our 21st century force and the next generation of
weapon systems.
In its current state, the DOD infrastructure is still capable of
supporting the National Military Strategy; however, in some locations,
we face a high risk of operational limitations that may affect mission
success. Throughout DOD, installation readiness is at an all-time low.
In fact, 60 percent of our infrastructure is rated C-3 (some failures)
or C-4 (major problems). It is particularly alarming that the current
condition of training and operational facilities is lower than any
other facility category in DOD. Usage restrictions and the shortage of
required training ranges and operating areas slowly but inevitably
degrade the readiness of our operational units. The poor material
condition of facilities also directly contributes to lost or degraded
training opportunities.
In sum, our deteriorating infrastructure continues to impair
readiness and detract from the quality of life of our service members
and their families. I ask you to support our efforts to fix this
problem, because it effectively reduces the efficiency of our uniformed
and civilian workforce and further lowers retention rates for highly
qualified and otherwise motivated personnel. A world class fighting
force requires mission-ready facilities.
Additionally, we sorely need further base closure rounds as part of
our overall recapitalization effort. According to the April 1998 DOD
BRAC Report, we have 23 percent excess base capacity in the United
States, a situation that directly impacts the ability of the Service
Chiefs to provide, train, maintain, and equip today's force. By
removing validated excess capacity, we could save $3 billion per year
in the long-term. This money would then be available to fund
appropriately our remaining bases and help fix the remaining
infrastructure.

TRANSFORMATION

Joint Vision 2020
Our future force must be a seamless joint force and our roadmap for
achieving this joint force is detailed in Joint Vision 2020 (JV 2020).
Although the Services are busily engaged in the transformation of their
respective forces, in my view these individual transformations will be
most effective operationally only if they mesh fully with the more
encompassing joint transformation called for in JV 2020.
A key feature of this transformation will be the implementation of
dominant maneuver, precision engagement, focused logistics, and full
dimensional protection in the context of Joint Task Force (JTF)
operations. Today, we successfully execute JTF operations when they are
needed. But, in my view, we will be more responsive and agile in the
future with JTF operations as our ``national military core
competency.'' This goal will not be achieved through technology and
materiel solutions alone. It will also require intellectual innovation
and the development of doctrine, organizations, training and education,
leaders, people, and facilities that effectively make use of new
technologies.
Using JV 2020 as a conceptual template, the goal of our joint
transformation effort is a force that is dominant across the full
spectrum of military operations. DOD is seeking to transform its forces
to meet future challenges through a comprehensive plan that integrates
activities in several areas: Service concept development and
experimentation efforts; joint concept development and experimentation
designed to integrate Service capabilities where possible and develop
joint solutions where necessary; implementation processes in the
Services and joint community to identify rapidly the most promising of
the new concepts; and Science and Technology efforts focused on areas
that can enhance U.S. military capabilities.
This overall transformation effort is not focused solely on U.S.
military capabilities. USJFCOM has developed an aggressive plan for
outreach to multinational partners as well. Our objective is to bring
allied perspectives into the concept development process to facilitate
our future ability to operate effectively within a coalition
environment.
Based on joint experimentation and implementation programs, we
expect to see some new capabilities that will be operational well
before 2020, while other promising concepts will continue to be
explored and developed. Our overarching goal is to bring these various
capabilities together in a coherent and synchronized fashion.

OTHER TRANSFORMATION ISSUES

Logistics Transformation
Our goal for logistics transformation is to provide the joint
warfighter real-time logistics situational awareness by leveraging
technology and optimizing logistics processes. The Defense Reform
Initiative Directive #54, Logistics Transformation Plans, establishes a
framework of objectives and a means to measure progress toward
accomplishing this goal.
Ultimately, we must create a network-centric environment in which
data can be accessed in real time at its source. This network-centric
environment will provide the warfighter with operationally relevant
logistics information necessary to make accurate, timely decisions and
to maintain our military advantage into the next decades.

Mobility
We are making significant improvements in our ability to deploy
forces. Our fleet of 35-year old C-141s is being replaced with C-17s,
and numerous conventional break-bulk cargo ships are being replaced by
Large Medium Speed Roll-on Roll-off ships. However, we foresee
increased challenges and stresses to the mobility system. These
challenges were carefully examined in the comprehensive two-year
Mobility Requirements Study 05 (MRS-05). The study determined that
programmed strategic lift capability falls short of requirements for
both CONUS and inter-theater missions. MRS-05 also determined that
increased capability is needed within theaters to move equipment and
supplies forward from pre-positioning sites, airports, and seaports.
Consequently, we are aggressively pursuing policy changes, host-nation
agreements, and, where necessary, considering new equipment as part of
the 2001 QDR to ensure timely force deployment. More than ever,
Congressional support of strategic lift is needed if we are to build a
national mobility capability sufficient for our current and future
needs.

Joint Interoperability
We have made progress in the area of interoperability with an
overall effort focused on creating a force that is ready to fight as a
coherent joint unit, fully interoperable, and seamlessly integrated.
Our long-term goal is to require that interoperability be ``designed
in'' at the beginning of the development process rather than ``forced
in'' after the fact. We intend to achieve this goal through
improvements in the requirements generation process, including
establishment of interoperability Key Performance Parameters (KPPs) and
Information Exchange Requirements (IERs) in systems development. A
requirements-based Joint Operations Architecture, well grounded in
joint doctrine, will provide a roadmap for addressing interoperability
issues across the full spectrum of capabilities. These efforts will
enable DOD's senior leadership to focus more on interoperability and
integration of the joint force.

INTELLIGENCE AND COMMUNICATIONS TRANSFORMATION

Intelligence, Surveillance & Reconnaissance
Achieving and maintaining a decisive advantage in our ability to
access, gather, exploit, and act on information remains a critical
aspect of our combat capability and readiness. A full spectrum ISR
capability is the mainstay of that concept. To achieve this, we need to
place more emphasis on the capability to ``watch'' or ``stare at''
targeted objectives with collection systems able to monitor, track,
characterize, and report on moving objects and dynamic events as they
occur in the battlespace. In other words, a constant rather than
periodic sensor access is required.

Intelligence Interoperability
Intelligence interoperability is the foundation of our capability
for dominant battlespace awareness. Our goal is to ensure that our
forces retain an information edge over potential adversaries. To be
fully interoperable, intelligence must be produced and delivered in a
fashion that immediately supports command decision making and mission
execution. We are gradually tearing down barriers to interoperability
between intelligence and operations systems to ensure we provide the
Common Operating Picture essential to future command and control. The
Common Operating Picture will provide a unified view of the battlespace
for the soldier in the field, the pilot in the cockpit, and the
commander, regardless of location.

Intelligence Federation
The Intelligence Federation is a new concept wherein designated
commands and units provide specified intelligence support to an engaged
CINC during a crisis or contingency operation using a pre-planned
methodology tailored to that CINC's area of responsibility and
operational requirements. The concept evolved from the growing need to
ensure the collective resources of the intelligence community function
as a ``system of systems,'' so that users are able to receive
information tailored to their unique requirements, and with the
necessary fidelity. To do this effectively, we need to create a
federation among intelligence components using Joint Tactics,
Techniques, and Procedures.

Global Information Grid (GIG)
The CINCs testified last year that a major warfighting deficiency
in some theaters is the inability to plan quickly and execute
decisively because of C4 deficiencies. I wholeheartedly agree. Simply
put, our C4 infrastructure falls short of what is needed to support
properly our decision makers and the men and women on the front lines.
To help alleviate this shortfall, we must ensure that our warfighters
have full and reliable access to the GIG from any point on the globe.
The GIG is the globally interconnected, end-to-end set of information
capabilities, associated processes, and personnel that we are
developing to manage and provide information on demand to warfighters,
policy makers, and supporting personnel. I believe that our ongoing
efforts to bring the GIG online will provide the foundation for
information superiority on the battlefield in the decades ahead. To
that end, it is necessary to continue to invest in and upgrade the GIG
infrastructure. Satellites, fiber optic cables, support of network
operations, information assurance programs, and DOD's use of the radio
frequency spectrum, are all tremendously important to achieving this
goal.

Radio Frequency Spectrum Access
There is an important debate ongoing concerning the proposed
reallocation of a segment of the DOD radio frequency spectrum to
commercial users, an initiative with the potential to disrupt our
transformation effort. In the last 8 years, 247 MHz of the RF spectrum
for Federal use, primarily used by DOD, has been reallocated for
commercial use by the private sector. I am concerned that further
reallocation of frequency spectrum for commercial use, without
comparable spectrum to execute DOD's critical functions, will have a
major impact on our ability to execute our missions. Our success on the
battlefield largely depends on our ability to use advanced
communications technology to exchange vital information between
decision-makers, commanders, and deployed forces.
One of the principal areas of interest to the private sector is the
1,755-1,850 MHz band. This band is currently used for tactical data
links; satellite telemetry, tracking, and control; precision guided
weapons; air combat training systems; and the delivery of voice, video,
and data information to warfighters and commanders in the field. These
systems are indispensable to our national defense. Some industry
advocates have suggested that DOD share segments of this frequency band
or relocate to another operationally suitable spectrum. I believe this
proposal is problematic for two reasons. First, according to our
analysis, sharing with commercial users is not possible due to
interference over large geographical areas and metropolitan centers.
Second, moving DOD communications to a different, but comparable,
spectrum could be problematic due to the lengthy transition period
required. Some national security satellites will use this frequency
band well into the future. If directed to move, a more detailed cost
and transition timeline will be required to ensure continuity of our
nation's defense capabilities. It is imperative that we strike a
reasonable and informed balance between commercial needs and military
requirements. I understand that there is a White House process, led by
the National Security Council and the National Economic Council, which
is reviewing this issue to achieve this balance, critical for national
security. We anticipate that suitable solutions will be found that are
acceptable to all parties.

CONCLUSION

Today, even as we seek to transform our force to face an evolving
security environment, our goals remain firm. We must protect America's
interests, deter aggression, support peaceful resolution of disputes
and most importantly, to be ready to intervene or respond to a conflict
and win decisively.
This is a critically important time for our Nation as we move
further into the new millennium as the only global superpower. It is
clear that we have a great deal of work to do with the Administration
and Congress as we develop a new NSS and support the requirements of
the QDR. Our professional, highly trained, and motivated young
Americans in uniform are counting on us to make the right decisions. We
have an opportunity in the months ahead to build on successes, address
the challenges, and sustain and support our dedicated forces. We must
provide our warfighting forces with the best tools available as they
defend America's interests, and we must shape a future force that will
help us achieve our national security objectives well into the 21st
century. Together, I am confident we can capitalize on this
opportunity.

Senator Inouye. I thank you very much, General Shelton.
Once again, thank you for your service to our Nation.
General Shelton. Thanks, Mr. Chairman.
Senator Inouye. I will be asking all members to limit their
questioning to 5 minutes, because of the limitation of time.

NEED FOR ADDED DEFENSE SPENDING

Mr. Secretary, as several of us have indicated, the budget
resolution states very clearly that we may allocate the
additional $18.4 billion if this would not use up the Medicare
surplus. OMB and CBO have both indicated that it will use up
the Medicare surplus. If that circumstance continues to the
moment we consider this measure, we have a few terrible
options, one, a general reduction, one going back to the
drawingboard and looking at priorities, another declaring an
emergency, which I think would be a farce, and seeking a waiver
of the budget provision, which I have recommended to this
subcommittee, and that would require 60 votes. What would you
suggest that we do, sir?
Secretary Rumsfeld. Mr. Chairman, I am here to present the
budget for the Department of Defense, and of course your
questions, and the important questions that others have raised,
relate to the Federal budget overall, which is the purview of
this committee and this Congress, as well as the President of
the United States.
All I can say in response is that there is no question but
that the Department of Defense needs every nickel of this
budget. You are correct in your opening statement. The
President has been unambiguous on this subject. He has been
very forthright. It is not possible, given the totality of the
budget, to say which Department's budget is the one that is
pushing against the self-imposed constraints of this Congress.
What we do know is that the President said his priorities
are defense and education, and he has said it repeatedly, and I
certainly agree with him.
Senator Inouye. In other words, you would not suggest any
reduction in defense spending?
Secretary Rumsfeld. Absolutely not, Mr. Chairman.
Senator Inouye. That would mean you would reject a general
reduction across the board?
Secretary Rumsfeld. That is, of course, not for the
Secretary of Defense to even opine on. That is a presidential
decision as to what he wants to do, but what he has said thus
far is very clear, that his priority is defense and education.
Senator Inouye. Would the Secretary of Defense and the
administration object if the Congress decided to waive the
restrictions set forth in the budget resolution and allocate
the funds, notwithstanding the fact that the Medicare surplus
has been depleted?
Secretary Rumsfeld. Well, Mr. Chairman, as I have
indicated, that is a presidential decision and not one that I
can make myself.
Senator Inouye. And you have received no indication from
the White House?
Secretary Rumsfeld. Other than what I have stated, that his
priority is defense and education.

BASE CLOSURES

Senator Inouye. Mr. Secretary, in your prepared testimony,
you mention efficient facilities initiative of 2001. Am I to
assume this covers base closures?
Secretary Rumsfeld. Yes, sir.
Senator Inouye. What are your thoughts on base closures,
sir?
Secretary Rumsfeld. My thoughts are several, first that it
is the last thing in the world anyone with any sense would like
to propose to the Congress, that they go to their House and
Senate Members and suggest that they have to close some bases
in their districts when they do not want to close them, so I
did not do this willingly. I do it out of necessity. There is
no question, everyone who looks at this, every one of the
Chiefs of Staff, the Chairman, the Vice Chairman, every single
one comes and says, we simply must close some bases.
The estimates by the experts, I am no expert, but the
experts suggest that somewhere between 20 and 25 percent of our
base structure is not needed.
I certainly agree that we ought to address the base
structure around the world as well, but we have to address it
in the United States in my view, and that is why we have come
forward with it.
Senator Inouye. Are you recommending that certain bases be
closed?
Secretary Rumsfeld. I am recommending that the initiative
that has been put forward to Congress, which is for an
additional round of the existing legislation, be approved by
the Congress so that a proposal can be made ultimately to the
Congress for base closures.
Senator Inouye. The committee has been advised that there
are--I notice that my time is up, sir, so may I now call upon
Senator Stevens.

POSTPONED PROCUREMENT PROGRAMS

Senator Stevens. Mr. Secretary, there are a great many
examples of systems that have been in R&D since the 1990's that
have not come out of R&D because we have stretched them out.
Both the administration and the Congress agreed the Comanche
and the Crusader artillery systems in the Army, the B-22, the
advanced amphibious assault vehicle for the Marine Corps, the
pressures that we have had in the past, that also applies to
the LPD-17 for the Navy, originally funded in 1996, and yet
construction only began in the year 2000.
You have inherited a lot of postponed programs. I assume
that you have reviewed them as part of your current review.
Have you come to a conclusion about any of those that ought to
be terminated, or what to do about getting into position where
we can move them from R&D into production and deployment?
Secretary Rumsfeld. Senator Stevens, the way this process
is working is that the quadrennial defense review is coming
towards a close. The defense planning guidance has been given
to the Department and the components, along with some specific
guidance as to things that the administration believes that
they ought to budget for and fund for.
The services and the components are then asked to come back
in the normal budgeting process, and that will take place later
this month, and in October and in November, in preparation for
the 2003 budget.
The services will be making their recommendations to me and
to Deputy Secretary, and to the Department officials, senior
officials, as to what they think their priorities ought to be.
In that process, they will recommend, I am certain, some things
be discontinued and some things be brought forward, but you are
quite right, it is not unusual with research and development
that a number of things get started and only some of them
eventually are fully funded and deployed.

NAVY SHIPBUILDING

Senator Stevens. We will await that report. Let me move on
to another thing that I have been working on for sometime, but
unsuccessfully. The current rate of production of new vessels
for the Navy will sustain only a fleet of about 250 ships by
2010. The rate of replacement is woefully low, and the process
of acquisitions is really almost stalled. We have had poor
performance on several of the shipbuilding programs. Your
budget request before us now has $800 million solely to pay for
cost overruns in ship procurement.
I have tried to get the Navy to adopt the procedure
followed by the Coast Guard for a long time. It is called
advanced appropriations. It deals with putting into play the
acquisition of multiple ships and not fully funding each one as
we get the authorization.
The Navy now tells us they are going to have another one-
half billion dollars needed to pay for cost overruns on ships
prior to construction contracts for 2002. It is my
understanding the administration has turned down the concept of
advanced appropriations and allowing us to go forward with
multiple ship acquisition through a concept of annual
appropriations. Why?
Secretary Rumsfeld. I may ask Dr. Zakheim to comment on
this, but it is correct that at the present time the Office of
Management and Budget does not favor the idea of advanced
appropriations for ships. It has a number of advantages,
obviously, from our standpoint, from the Department of
Defense's standpoint, because you can begin the process of
moving along with a more robust shipbuilding program than you
can without advanced appropriations.
The argument they make, I suppose, is that it creates a
mortgage for the future that concerns them, and it is something
that is being discussed within the administration.
Senator Stevens. I think the current system encourages cost
overruns. I cannot think of one single Navy ship that has been
built since I have been here that did not have cost overruns,
but if you turn around and look at the fixed price contracts
for the Air Force or for the tanks, we have been able to have
some sort of cost control.
The problem is that they get the money, they put it in the
bank, and they do not care when the ship comes off because they
have already got the money. Now, I think there ought to be
something done about that, and I hope that you will take
another look at it.

INTERIM BRIGADE COMBAT TEAMS

I am running out of time, so I will run along. We
accelerated the deployment of the second interim brigade combat
team, the so-called IBCT. This is General Shinseki's
transformation initiative approved by the Chairman of the Joint
Chiefs, which we think offers a great opportunity for us to
move the Army into their full needs for the 21st Century.
We have--well, first, do you support the whole concept of
these interim brigade combat teams? They are interim because we
still have a transition out there for the future, but do you
support the creation of them?
Secretary Rumsfeld. I think that the approach that the Army
is taking has been a good one, yes.
Senator Stevens. Will your budget fully fund the expansion
of the concept announced by the Army?
Secretary Rumsfeld. As I indicated earlier, those are the
kind of tradeoffs that take place. I do not even know if the
Army will propose that when they come back to us, but those are
the kinds of tradeoffs that get taken care of and addressed
during the budget bill which is in the September-October
period.
Senator Stevens. I am done. I have a lot of other questions
I would like to ask. I do hope we will have a chance to confer
with you along the line before we face the proposition of
confrontation at the very last minute on this 2002 budget.
Thank you, Mr. Chairman.
Senator Inouye. Thank you. Senator Leahy.

CHINESE MILITARY CAPABILITIES

Senator Leahy. Thank you, Mr. Chairman. I appreciate the
fact that you responded to the concerns that I and Senator
Feinstein and others raised about China. I must tell you, on
Sunday I was in Europe when this article came out. I know you
said you have talked to others, including Dr. Rice, although
her quotes in the New York Times article did not give a great
deal of comfort to those of us who are concerned about China
expanding their nuclear capability, and a number of European
allies I talked with were also concerned.
The articles at least give the impression that the
administration feels that China needs to increase their nuclear
stockpile to accommodate their comfort level about a possible
nuclear shield, or missile defense system here in the United
States. Now, I think the future Chinese nuclear stockpile is
one of the more worrisome aspects of all international
security, and frankly the concern about a missile from a rogue
State, one that would come here with a return address on it, is
a lot less worrisome to me than an international nuclear arms
race. I think we sometimes bend over backwards to look at a
small problem and ignore a much bigger one.
If you are really into nuclear proliferation, I mean, I do
not see how that helps us, especially when our defenses are
more and more contingent on the ability of our intelligence to
counteract serious terrorism threats. I am not so concerned
about the missile being lobbed by a rogue State coming wobbling
over the horizon at us, when we will know where it is coming
from, than I am about the small ship that comes into New York
Harbor or off the coast of California and loaded with a large
nuclear weapon, just as I am concerned about a McVeigh or
somebody like that in our own country that might bring about a
terrorist attack.
So can you assure us, categorically, Mr. Secretary, that we
are not, directly or indirectly, giving a green light to China
to increase their nuclear arsenal without any concern being
expressed by us?
Secretary Rumsfeld. Well, Senator Leahy, I suffer from not
having read all of the articles about this. As you, I returned
to town and saw the flurry of all these articles, and
statements, and counterstatements, and what have you.
Senator Leahy. Well, resuming from the articles, is it the
administration's position to give either indirectly or directly
the signal to China that we are not going to resist their
increasing of their nuclear arsenal?
Secretary Rumsfeld. I am told that there is no one in a
position of authority in the Bush administration in the foreign
policy area, which I am not, but Secretary Powell and Condi
Rice are, who has any intention of giving a green light to
China, period, or in exchange for anything. Now, that is what I
know.
You mentioned the risk of an international nuclear arms
race. I mean, quite the contrary, it seems to me, the President
of the United States has indicated he wants to significantly
lower the number of nuclear weapons, offensive nuclear weapons
in the United States stockpile. He has me engaged in a
congressionally mandated nuclear posture review, which I am
well along on and should complete well before the deadline at
the end of the year. It is his announced intention to reduce
the number of weapons. I know that from my meetings with the
Russians, that their intention is to reduce the number of
weapons, and I think that the risk of a nuclear arms race is
really not something that is likely.
There is no question but that China has been increasing its
defense budget in double digits, and in not just ballistic
missiles, longer range and shorter range, and nuclear, but
mostly nonnuclear, and they are doing what they are doing. I
also agree with you that it is unwritten exactly how China is
going to engage the rest of the world and its neighbors.
Certainly we ought to be doing everything we can to see that
they engage the world in a peaceful and rational way.
Senator Leahy. There are some aspects of this that maybe I
should discuss with you or your staff, because it would require
going into some highly classified areas that I do not want to,
would not discuss here in an open session, and we just have to
set up a time with some of your staff to do that.
Secretary Rumsfeld. Good.

MODERNIZATION AND THE RESERVE COMPONENTS

Senator Leahy. I also would like to hear more about the
plans to modernize our Armed Forces, but especially the
National Guard. Senator Bond made some reference to this. He
and I chaired the National Guard Caucus here in the Senate,
doing more and more on the efforts to carry on our national
defense, especially as we go on to other parts of the world,
sometimes for short-term, sometimes for long-term, where they
are using a lot of aging equipment. I think of the F-16,
beginning to develop cracks in its airframe and so on.
How will the soon-to-be-released defense strategy address
the National Guard modernization? I mean, will there be an
increased transfer of equipment to them, more modern equipment,
the purchase of new equipment? I mean, how are they going to
figure in this? If they are going to be part of our strategy,
are they going to do it with equipment that works, or old
equipment?
Secretary Rumsfeld. Those kinds of decisions, of course,
are the ones that are being considered now by the service
components, and will be coming out over the coming weeks.
In answer to you and Senator Bond, let me say that I
certainly believe in the Guard and the Reserves and in the
total force concept. As a matter of fact, after I left the Navy
as a naval aviator I was a weekend warrior in the Reserves for
the Navy.
As you also probably know, one of the brigades of the new
transformational interim brigade combat teams is a Guard
brigade, in Pennsylvania, as I recall, so the Guard and
Reserve--and they are active in Bosnia and Kosovo, the Guard
and Reserve, so they play a very important role, and the
quadrennial defense review did not have the time to address
them in a thoughtful way, so it will be done as a subset, and
we will proceed over the coming weeks and months, very likely,
in a more thorough way than the QDR was able to address them.
Senator Leahy. Thank you.
Senator Inouye. Thank you very much. Senator Shelby.

CHEMICAL DEMILITARIZATION

Senator Shelby. Thank you, Mr. Chairman.
Mr. Secretary, a $1 billion chemical incinerator stands on
the Anniston Army Depot in my State. Big issues like buying F-
22's and fielding a missile defense are very important to our
national security, I believe, and because of their budget
implications they tend to dominate our discussions here and out
in the halls, but a very important issue, Mr. Secretary, to
some of us is the chemical demilitarization program. You are
very familiar with this, and I know General Shelton is.
While I think most observers were pleased when you acted
earlier this year, Mr. Secretary, to elevate the chemical
demilitarization program to what you call an acquisition
category 1 defense program under the control of Secretary Pete
Aldrich, that cloud of distrust remains in the communities in
the United States, including my State, where the chemical
stockpiles are.
I believe, Mr. Secretary, that Secretary Aldrich has
assumed the central leadership role, and so far has shown a
willingness to reach out to the communities in my State and
others. I hope he understands the problems which exist in
Alabama and these other States with the chemical stockpile
emergency preparedness program. They call it, I believe, CSEP.
The recent General Accounting Office (GAO) report on the
program should serve as a guide to fixing these problems, I
believe. This program has not turned the corner, and continues
to be in need of deep organizational reform.
We are quickly approaching our burn date in my State of
Alabama, and burn, as you well know, they start burning the
chemicals, and the people that live in these neighborhoods get
nervous, as you would and I would. It is a point where I
believe maximum protection must be in place for the community,
and I do not believe it is today.
Meanwhile, Mr. Secretary, agreement on whether the right
safety measures are in place is anything but unanimous. The
facility in Alabama, I can tell you, I cannot wait myself until
the last chemical round is destroyed, as you would be, at the
depot, and I am very concerned about where this program is
right now in my State and some other States.
Mr. Secretary, as the person, the Secretary of Defense,
with the ultimate responsibility for the program, could you
share your thoughts with us about where the chemical
demilitarization program is as a whole, and take a moment or
two to comment on the health of the CSEP program, the
preparedness, because a lot of people, when they start
operating that $1 billion incinerator in my State of Alabama,
Anniston, Alabama, are going to be nervous. Should they be
nervous? I know that is a lot of it.
Secretary Rumsfeld. It is a lot.
Senator Shelby. But it is an important issue, too, though.
Secretary Rumsfeld. It is something that I recognize, from
the standpoint of any community, is enormously important, and
it is the responsibility of the Department of Defense to see
that we are as attentive as is humanly possible to the proper
safety measures, and the appropriate protections for the people
in the region. It is a program that has had its difficulties,
as you point out, not only from the standpoint of timing.
It is also the kind of a program that I think is inherently
going to generate a variety of views and opinions and
controversy.
Senator Shelby. And concerns.
Secretary Rumsfeld. Concerns, legitimate concerns. It is
just inevitable, but also debate as to what is the appropriate
safety measure, and what is the appropriate approach, just as
most things scientific and technical do.
Pete Aldrich is on top of it. I am told that the program is
going to be addressed tomorrow at the Defense Acquisition Board
by Secretary Aldrich, and he is a very talented and competent
person who I know shares your respect for the sensitivities.
Senator Shelby. Sure, but the people who live in these
communities, 150, 200,000, in that area, are concerned, and
should be concerned. Would you not agree?
Secretary Rumsfeld. You bet. I mean, there is no question
but that we are dealing with some very dangerous chemicals.
Senator Shelby. Absolutely.

INTEROPERABILITY WITH ALLIES

General Shelton, I just have a minute, but I am concerned
about what General Ralston has called basically, to paraphrase,
the growing gap of technology between the United States and our
European allies. You are very familiar with all of this. Lord
George Robertson said, and I will quote him, ``we have a
glaring Transatlantic capability gap, and interoperability
problem between the allies.''
What initiatives are underway to address this
interoperability problem with our allies, because since our
allies' for the most part current military structure's military
budgets do very little to narrow this interoperability gap, and
if the technological and budgetary trends remain the same, do
you not think the service unfunded requirements, the huge cost
of modernization, become even more critical if we hope to be
able to execute further contingencies and defend against
threats? Is that real, and is it a growing concern? Obviously
it is for the Europeans.
General Shelton. Well, yes, sir, and I think, as we saw
during Operation Allied Force, and this is when it was really
brought to light. I will not say first came to light, because
we had started working on this issue even before Allied Force,
which was the Kosovo operation, but Allied Force highlighted
the growing gap between our allies and the United States
forces, and really got our attention focused on the way ahead,
and how we ensure that in this world of interoperability, that
we can keep that gap as narrow as we possibly can through
tactics, techniques, procedures, et cetera.
But also simultaneously kind of a dual track approach
through the defense capabilities initiative that was initiated
was to bring them into the fold, if you will, show them the
direction in which we are headed, and solicit their voluntary
participation in some of these programs as well as continuing
to stress the need to place adequate funding in their own
budget to not let this gap get too large.
Senator Shelby. But if it continues, the trend continues,
they are going to fall further behind. That is just common
sense.
General Shelton. And that has been a concern, but at the
same time that we see this developing, we do not want to send
our people into harm's way with second class technology in any
way, shape, or form, and so while we continue to modernize and
try to stay on the leading edge of technology, we also look for
ways that we can, through nontechnical means, if you will,
reduce that interoperability gap between us and our allies
through either tactics, techniques, procedures, and work-
arounds, if you will, and we have been successful in a number
of areas in that regard.
Senator Shelby. Thank you.
Senator Inouye. Thank you very much. Senator Hollings.
Senator Hollings. Thank you, Mr. Chairman. I will use my
minute just to comment.
General Shelton, with no reflection on General Myers, if I
were the President I would reappoint you. We are lucky to have
had you.
And Secretary Rumsfeld, we are more than lucky to have you.
I have been getting disillusioned. I have been listening to
Secretaries up here for almost 35 years, and you have given us
a very, very comprehensive, visionary presentation of the needs
of Defense, and I am going to support you in every regard that
I possibly can.
Your problem is your Commander-in-Chief is running around
hollering, cut spending, hey, watch that Congress, they are
spending, they are spending, Congress. That is outrageous
nonsense. He favors $7 billion more we are going to need on
agriculture, he favors and in fact sponsored the $7 billion
more over 3 years that we need in education, and now you are
coming asking for the $18 billion more, or whatever, and I am
trying to help you, and you are trying to get it, and you are
saying every nickel is needed, and I know everybody is going to
vote for the farm, and I know everybody is going to vote for
education, but you can tell from the questioning everybody is
not going to vote for every nickel, and that is going to cut
you back, so just ask the Commander-in-Chief to cut that shabby
political charade out so that we can get to work and really
provide the money you need.
Thank you, Mr. Chairman.
Senator Inouye. I thank you, sir. Senator Domenici.
Senator Domenici. Mr. Chairman, might I say to Senator
Hollings I think I have been heard in the last couple of weeks
that I think in a time of recession, which we are now in, that
it is better to spend more money than cut programs. That may be
translated into agreeing with what you have been saying, what
you are just saying, but I have not had a chance to ask the
administration how they feel about these other add-ons. There
are going to be add-ons, and there are going to be add-ons in
this one.
First I want to say to the General. I did not congratulate
you. Since I am here, I want to say congratulations.
General Shelton. Thank you, sir.
Senator Domenici. And Mr. Secretary, I want to say I am
glad you come to New Mexico frequently. I cannot be up there as
often as you of late, at least, because I have a little more
work to do in other parts of the State than you do up in the
Taos area. You live in a beautiful part of our State part-time.
We are glad to have you.
Now, let me see if I can explain this a little bit
different one more time, very quickly. First, Senator Inouye,
there is no point of order for breaching the social security
accumulation as part of the surplus, and there is none on
Medicare.
There may be a point of order arise at a point in time on
the total of the budget of the programs that the appropriators
do. We might exceed the budget allocation to the various
committees, in which event there will be a point of order
against the last bill through, which would probably be this
one.
Now, let me see if I can explain a little differently what
has happened to the Defense Department. We produce a budget
resolution. We have had 10\1/2\ years of prosperity, which
means we have been collecting enormous amounts of revenue. So
we are estimating in this budget resolution that we are going
to continue to grow by about 2.7 percent, and so what we say
is, there will be plenty of revenues to pay for what the
Defense Department needs.
Then, members of the committee go out and prepare the add-
ons that they want for the budget. Everybody knows the $18.3
billion is less than they need, less than they want. They said,
we will live with it.
Now, what happens? You can talk about the President's tax
cut all you want. It is the right thing, but what really
happened is, that economic estimate that you are operating on
went down, through no fault of the military, through no fault
of anyone, as I just said. That means that the surplus went
down. That means that today we are telling you, after you have
gone to the trouble of making this fit a 4-month-old budget,
and try to build into it continuity, we are going to ask you to
cut it because somebody is saying the economics have changed.
So I would ask the members here, and I would ask the
Congress, do you really want to treat the military as a roller
coaster, depending upon what the economists say the state of
growth of the American economy is? I do not believe so. I think
what they need, they need, and we ought to give it to them.
This economy is going to come back. Do we want them to be
anxiously awaiting for an economic recovery so that they will
have money to fund their budgets? I think that is ludicrous.
What we have to do is, fit in an honest budget that was
changed by economic downturns. That would be a terrible mistake
to send them back and say, do it over again, for what reason?
Because the economy faltered somewhat, but it will be back in a
year, 2 years, and then what do they do, try to build back and
make harmony out of confusion. That is my assessment.

SAFETY AND RELIABILITY OF U.S. NUCLEAR STOCKPILE

Now, let me say to both you and the General, I am very
worried about the way the military and the Defense Department
treats nuclear weapons activities. Our good friend from
California raised the issue, are we going to do nuclear
testing. Senator, we are not going to do nuclear testing
provided we get sufficient money to keep that part of the
United States research effort in defense nuclear security,
headed by General Gordon, so we can have enough money to do the
research to do what, to tell Congress and the President that
the weapons are safe and secure. That is called science-based
stockpile stewardship.
Now, whenever the military gets tight, they put more in the
regular defense and less for nuclear weapons. I submit that the
nuclear weapons compound of America, including the three
national laboratories, including a big laboratory in Tennessee,
are in desperate state of repairs. You did not put any money in
for this, in this $18.3 billion for that, and we must begin to
have you worry about that just like you worry about tanks, or
readiness. General Gordon has reached the end of the rope in
trying to put together his new semiautonomous agency that will
protect us in the science-based stockpile stewardship.
I do not expect an answer, other than, Mr. Secretary, are
you aware of this problem?
Secretary Rumsfeld. Senator, I am very aware of the
problem. I have had at least three or four meetings with
General Gordon. I have worked with OMB and the President on
General Gordon's budget. As you know, his budget is in the
Department of Energy and not in the Department of Defense.
Senator Domenici. That is true.
Secretary Rumsfeld. But you are absolutely right, the worst
nightmare would be to receive a phone call and say, Secretary
of Defense Rumsfeld, I am very sorry to report, but the nuclear
stockpile, we have just been examining it and reviewing it, and
it simply is not safe or reliable, some element of it, and we
need to make the kinds of investments you are talking about to
assure that we do not have that situation.
Senator Domenici. Mr. Chairman, might I ask if the
Secretary will be a little more involved right now? They are
cutting next year's more than this year's. Right now, your
budget does not cover any reconstruction of these buildings,
including the dilapidated one in Tennessee, where the ceiling
is falling in on the workers so they have to wear helmets, even
in service-type jobs. You put no money in for that. This
committee did. You put none in. It is a very serious problem,
and I hope you will look at it.
Senator Inouye. Your time has expired. Senator Kohl.
Senator Kohl. Thank you, Mr. Chairman.
Secretary Rumsfeld, getting back to nuclear missile
defense, which theoretically would make us invulnerable to the
rogue State's missile, what about chemical weapons? What about
biological weapons? Are we invulnerable to that, and if we
cannot address that satisfactorily, then why are we addressing
this as if to suggest that this protects us against rogue
States?
Is it not true that during the gulf war, that Saddam
Hussein, had he wished, could have released biological warfare
against us, and that he did not because he recognized that we
would destroy his country in an instant, so unless we can deal
with nuclear, with chemical and biological weapons, how are we
offering the American people any sense of protection by dealing
with this missile shield defense?

WEAPONS OF MASS DESTRUCTION

Secretary Rumsfeld. Senator, you are quite right, if one
looks at the world, the number of countries that have active
nuclear programs and/or active chemical programs, weaponized,
and active biological programs that they weaponize, is growing.
All three are serious. All three are considered weapons of mass
destruction, and terror weapons. They can be delivered in a
variety of ways. They can be delivered on ballistic missiles,
they could be delivered on cruise missiles, they could be
delivered by terrorists.
So to the extent countries that want to impose their will
on their neighbors know that they really cannot compete with
the western armies and navies and air forces, they not
surprisingly look for terror weapons, and terrorism, and the
use of weapons of mass destruction, and a variety of means of
delivering them.
We are spending, I think, something like $10 or $11 billion
to deal with terrorism, Government-wide and force protection.
We have funds in our budget to address subjects like chemical
and biological weapons. They are very serious, and very
worrisome.
However, to go then to the next step and say, well, if we
cannot defend against everything, why should we defend against
anything, is really a leap in logic that I cannot make. The
advantage of a terrorist is, they can attack at any time at any
place, suing any technique, and it is not possible to defend in
every time, in every place, against every technique, but simply
because we cannot defend against everything at every time in
every technique, does not mean we should not defend against
that which we can defend against, and that is why we are
investing the money we are for antiterrorism, it is why we are
proposing money for missile defense, it is why we are investing
money for cruise missile defense.
Senator Kohl. But would you not agree that developing a
missile defense system to render ourselves invulnerable
encourages other countries to then develop chemical and
biological weapons to make themselves effective in defending
themselves against us?
Secretary Rumsfeld. I think the history of mankind----
Senator Kohl. And I have to ask this question.
Secretary Rumsfeld. Yes, sir.
Senator Kohl. Why would we then deny other countries the
right to defend themselves with chemical and biological weapons
if they cannot afford and do not have our missile defense
system? Why would not they then argue, if you are going to
develop a missile defense system, and we cannot prevent you, or
you will not allow us to prevent you, then you must also allow
us to develop our own system of chemical biological weapons,
and do not tell us we cannot have them?

RATIONALE FOR MISSILE DEFENSE

Secretary Rumsfeld. Senator, first let me say that there is
no missile defense system that is going to make us invulnerable
in terms of, there is no weapons system, defensive or offensive
either one, that has ever been perfect, that has ever worked
100 percent of the time. That is just not in the cards.
Second, the whole history of mankind has been that because
there are people who want to impose their will on their
neighbors and deny them freedom, and occupy their lands, that
we have seen an offense and then a defense, and a new offense
and a new defense, and a new capability, so it has always been
evolving and changing.
It would not really matter whether the United States told
these countries they should not have chemical or biological
weapons. We have told them not to, and they still go right
ahead and do it. They have them. They exist. There are
countries that have weaponized those weapons in a way that they
can today impose enormous damage on their neighbors and on
others.
Senator Kohl. So then, why missile defense?
Secretary Rumsfeld. The advantage of missile defense is the
same thing as the advantage in looking at force protection for
your forces in the Middle East, for example. One might say,
gee, U.S.S. Cole was just hit. Why do we worry about that?
Well, we worry about it because we would prefer to be able to
take the U.S.S. Cole and steam it in the Persian Gulf and not
have it blown up by a terrorist.
We lost, I do not remember the exact number, but in Dharain
in the gulf war 19 to 23 were dead, and some 60, 80, 90, 100
were wounded, Americans, by a ballistic missile fired by Saddam
Hussein, and anyone who has lived in Israel and seen the
ballistic missiles come raining down on them ought to have a
good sense of why it is that people do not like to have
ballistic missiles raining down on them, and would prefer to
have a defensive capability to defend them.
Senator Kohl. I hear you, and you know a lot more about
this than I do, and you are a smarter man than I am, but I do
not understand it. It is to me an effort to make this country
invulnerable in that respect, but totally not taking into
account that any country wanting to respond to us can just go
beyond or go around missiles and deal with mass warfare in
other ways, and until you can address, or until we can address
these other ways, it seems to me it does not make sense to
start moving down this path, as long as there are other paths
that other countries can use, a lot cheaper and just as
effectively.
If the goal is to kill several million people, which a
missile would do, they could do it with biological and chemical
weapons and ensure their disruption as quickly from our
country, just as would be the case if they rained a missile
down on us, so unless, it seems to me, we can proceed in all
three ways in a convincing manner, it does not make any sense
to go down just one road.
Senator Inouye. Thank you very much. Senator Cochran.
Senator Cochran. Mr. Chairman, I think I will take just a
few seconds to say that my impression is that in the Department
of Defense budget there are requests for funding of other
programs that deal with the biological threat and that deal
with other terrorist activity. Is that not correct?
Secretary Rumsfeld. Absolutely correct.
Senator Cochran. And are we not trying our best to marshall
all the technologies and the best, scientific minds we have
available to us to come up with the answers to the challenges
posed by these other kinds of threats?
Secretary Rumsfeld. We have, indeed, invested a good deal
over the years. For some reason, missile defense has become
almost theological, and separated out from the others. While I
tend to deal with them all across the spectrum, as Senator Kohl
suggested, from terrorism to cruise missiles to ballistic
missiles, and any of the asymmetrical methods that one can use
to get around a country that has powerful armies, navies, and
air forces.
Senator Cochran. It may be helpful, actually, for our
debate when this comes up on the floor, to have a comparison
between the amount of money that is being requested, or has
been spent, dealing with these other threats that are described
by Senator Kohl, and compare that with the investments that we
are making in missile defense, technology development and
possible deployment of systems. Can we do that? Would that he
possible to submit that for the record? Mr. Zakheim--is it
something that can be done?
[The information follows:]

DOD SPENDING

No, such a cost breakdown cannot be provided because the
Department of Defense does not organize its budget or programs
according threats. Ballistic Missile Defense is the only
program that comes close to doing such a thing. But even there,
DOD spending to protect the United States and its forces
against missile attack entails more that BMD accounts. For
broader threats--like terrorism or attacks on our DOD
information systems--the fact is that the bulk of our defense
spending gives us the forces, capabilities, infrastructure,
intelligence, and more, to counter these and other threats.
Yes, we have specific programs--like Chemical and Biological
Defense--that would seem to define DOD spending to counter a
certain threat. But even in these cases, DOD has other spending
that contributes as well. DOD has not invested the time or
money to aggregate total costs per type of threat because that
simply is not how we plan, program and budget. We assess full
panoply of threats and design a complex of capabilities to
counter these threats.

NAVY SHIPBUILDING

Senator Cochran. Let me go back to the shipbuilding. I am
glad to hear the Secretary say that this is a major concern of
his as well. One thing that happened earlier this year that was
a jolt was that there was a delay in the selection of the DD-21
program. It was scheduled for May. It has now been postponed so
that the quadrennial defense review can be completed.
Then there was some concern, even though in June the
testimony from the Commander of Naval Operations (CNO), Admiral
Clark, and the Commandant of the Marine Corps, General Jones,
indicated that this program provided very important new
technological advances, modernizing war-fighting capability,
force projection, with support from naval forces that would be
very, very important in the years ahead, and then there was a
news conference by somebody at the QDR, a former Air Force
General, talking about how they were not certain at this point
that there was sufficient evidence that the DD-21 program would
be a truly innovative advancement in Navy war-fighting
capability.
So it leaves one with the concern that the Department of
Defense has publicly described differences of opinions between
very high-ranking officials and people who are given
responsibilities for helping make these decisions.
So what I am saying this for is to put an emphasis on the
importance of this program to the future of shipbuilding, for
the future of our Navy's capabilities to fight the wars of the
future, and if we abandon this effort at this time, it is going
to deal a death blow to not only the industrial base, but also
the capability of the Navy to deal with the challenges of the
future in a way that would avoid risk and make us more
efficient in our effort to discharge our defense
responsibilities.
Secretary Rumsfeld. Well, Senator, I can say two things.
One is, no decision has been made that I know of on the DD-21,
and I think I would know. It is something that the Navy is
considering in their priorities, and then it will be brought up
in the budget cycle.
Second, the fact that there are repeated news articles
where someone in the Pentagon or someone outside the Pentagon
in the contracting community, or someone in the Congress who
has an interest in the subject opines on this or opines on that
is something that is part of our free press and First Amendment
to the Constitution.
There is nothing we can do about it. It happens, and I know
it can be disorienting and confusing, because frequently the
articles are written in a way, as though they sound
authoritative, as though something has been decided, and in
fact what generally is the case is exactly what you said,
somebody comments on something and says that is their view, and
it may be a person who works in the building, or it may be a
person who works outside the building.

CONTRIBUTIONS OF GUARD AND RESERVE

Senator Cochran. One of the recent experiences I had back
in my State, I was visiting Camp Shelby, which is a National
Guard training facility. They had created there a training
program for soldiers and guardsmen who were going to be going
to Bosnia to participate in peacekeeping operations there. I
think it indicates the importance of our training for Reserve
and Guard personnel, that they are being brought into the mix
now of some real live experiences that are important to our
Nation's security and also our commitments that we have around
the world.
In addition, C-17's are being stationed down in Jackson at
the Air National Guard facility that we have in Mississippi,
the first National Guard unit that will be given the C-17's; we
had a celebration event the other day in that city. The State
welcomes the opportunity to be involved.
In many cases the Air Force Reserve personnel are asked to
volunteer for missions, to provide airlift, and support for
troops in the field, as they did in Desert Shield and Desert
Storm and other conflicts as well, and now are taking part in
training exercises so they will be able to add and supplement
the Air Force capability in this area.
I am just curious, General Shelton, if so far the
activities of the Guard and Reserve personnel are proving to be
confidence well-placed, are they doing their jobs, and are they
being trained so that when they are sent out here into the
field to do these missions, they can take care of themselves,
they can do their jobs, and come home safely?
General Shelton. Senator Cochran, first of all I do not
think there is any question that the tremendous value-added
that our great Guard and Reserve units are in fact--you might
say their motto would be, try fighting without us, because when
you look at our--and you mentioned the tanker fleet as an
example during Allied Force, a tremendous number of our
reservists, and if you look at the Balkans, we are involved in
that particular operation, airlift as well, and do a superb
job.
If you look in the Balkans on any given day, we will have a
25 percent to 30 percent of our force in the Balkans will be
from Reserve or Guard units, and they have done a great job,
and I believe that we have gone to great extents in recent
years to make sure that they are funded properly so that they
can be trained, they can be ready for the mission that we
assign them.
The vignette type training that you saw at Camp Shelby,
which is great training for those that are deploying into
Bosnia, is just one example, I think, of a myriad of types of
programs we have to make sure that when they are called, that
we have them properly prepared before they are deployed into
the theater of operation, but again they make a tremendous
contribution day-in and day-out, and a lot of our specialties
are predominantly in the Guard and the Reserve.
If you look at the Guard and the Reserve, 96 percent of our
civil affairs capabilities, which are in heavy use in most of
the types of operations we are involved in today, are in the
Reserve components, and it varies by type of specialty, but my
biggest concern today, and part of what we are looking at as a
part of the study that the Secretary mentioned, is how much
more could they absorb, or do we have them overtaxed?
Certainly, as we look at the numbers we are calling up, and
the frequency, that is our major concern today, is to make sure
we have got the balance right in the various types of units.
Senator Inouye. Thank you very much. Senator Feinstein.
Senator Feinstein. Thanks very much, Mr. Chairman.
General Shelton, I do want to say congratulations. I want
to wish you well on everything you do, and I want to say one
more thing. I remember well, and will remember you for your
classified briefings during military engagements. Unlike some,
you were always direct. You were to the point. Your briefings
were easily understandable. They were well-ordered, and I think
your team was excellent.
And from those briefings, it really gave me a great deal of
faith in our military, and I think it is really your
contribution, and I think one of the reasons that we had,
really, no opposition to what was happening was the way you
relayed it to us. So I want to say congratulations, and this
Senator will miss you very much.
General Shelton. Well, thank you very much, Senator, and
let me say quickly that as you said, I was supported by a great
team and was proud to be a part of it.
Senator Feinstein. Yes, you really were.
General Shelton. Thank you.
Senator Feinstein. Thank you. Now, you mentioned that 62
percent of the housing is substandard. I am glad Senator
Hutchison is present. She is Ranking and I am chairman of
Milcon, and I am going to look at the budget tomorrow. It would
be very useful if I could have before tomorrow your priorities
with respect to those requests that you believe are most
important to upgrade the housing. I think it is extraordinarily
important.
I have talked to General Meigs about his need to move a
division south of the Alps. I understand that. I talked to
Admiral Blair about some of his concerns, and I think Senator
Hutchison would appreciate it, too, if we could have some of
your priorities.
I have talked to the chairman of the House committee, and
he feels similarly about doing what we can to upgrade the
housing, so I think that will be the thrust of this Milcon
budget, and we would love to have your priorities.
Mr. Secretary, you mentioned additional base closures. I
want to just share one thing with you. The environmental
remediation dollars provided with base closure are remarkably
short. California alone could use the entire Nation's total.
The shortness of those dollars is truly responsible for why
some of these bases cannot be transitioned into civilian use,
and so in California, the process has really been stymied
because of that. I will not use more of my time, but it is a
real problem out there, and want you to know it.

SOURCE OF DEFENSE BUDGET INCREASE

The other thing is, there are many of us that feel that the
administration has an obligation to say where the $18 billion
additional in the defense budget should come from, and what the
administration's recommendation is with respect to what items
we cut to provide that money. I would hope we would have a
recommendation.
Secretary Rumsfeld. If you are referring to the total
Federal budget, and where the money for defense should come
from----
Senator Feinstein. That is correct.
Secretary Rumsfeld. The President's answer is, he has
repeated several times in the last month, is that his priority
is defense and education, and that that is the place that he
believes the Congress should put their priorities.
Senator Feinstein. But he has also said he does not want it
coming from social security, he does not want it coming from
the Medicare trust fund, ergo, it has to come from something
else that is cut, and all I am saying----
Secretary Rumsfeld. Or not increased.
Senator Feinstein. All I am saying is, what are his
recommendations? I think this is his budget, I think he has an
obligation to tell us, then, what he would cut, so in any
event, that is that.

MISSILE DEFENSE DEPLOYMENT

Now, let me go back to missile defense. The New York Times
on its web site had an article, and there are two articles in
the Washington Post under the byline of Michael Allen on the
subject of perhaps some games being played around the issues
that we discussed earlier. If you have not seen them, I will
make them available to you. I would like to know whether these
are totally false, essentially, and I will do that in writing.
Secretary Rumsfeld. I would be happy to take a look at it.
One thing I do want to comment on is, in your earlier comments
at the opening of the session, you said that you were concerned
that ballistic missile defense deployment would go forward
untested, and I would not to--I think that is roughly what you
said. I want to assure you that we are not deploying ballistic
missile defenses. We are engaged in a research and development
and testing phase of ballistic missile defense, and we have not
arrived at an architecture, because these tests have never been
done.
Second, with respect to going forward with something
untested, there is no question but that the goal would be to
complete the testing and then make a decision as to the
architecture, and then make a deployment decision. The reality
about most things is, most complicated technological things, is
that they evolve over time, and they are continuously changing.
I mean, the F-16's of today are not the original F-16's.
The M-1 tank is not the original M-1 tank. It has got the same
number, but a new model, new block number, and that would be
the case, and the suggestion that has appeared in the press
that the intention of the administration is to rush out with
something that has not been tested is simply not correct.
Senator Inouye. I am sorry, the time has expired.
Senator Feinstein. Oh. I would like to then ask in writing
a follow-up on this, if I may. Thank you.
Senator Inouye. Senator Specter.
Senator Specter. Thank you, Mr. Chairman. Mr. Secretary,
you can see at this session the considerable concern from the
subcommittee on the issue of missile defense and all of its
ramifications. When we were debating the broad versus the
narrow interpretation of the ABM Treaty back in the mid-
eighties, there was some thought that there might be some
defenses allowed to the Soviets. At that time it was considered
too expensive, too complicated, and too unworkable to have the
massive defense program, so it was restructured to a
considerable degree on the potential threat from North Korea.
There have been some signs in recent months that we may be
able to deal with North Korea. I want to cover just two
questions with you in the brief time allotted to me. If, in
fact, there is some opportunity to negotiate with North Korea,
and to be satisfied that there is a verifiable system in
effect, would there be concerns about the other so-called rogue
nations--Iraq, Iran, Libya, or any other state--to cause the
development of a missile defense system?
And the second question--let me put it on the table before
the time expires--is the issue that I raised in my brief
opening comment with respect to abrogation of the ABM Treaty,
if it comes to that. There is a long history in many instances
where the executive branch has come to Congress, which of
course has the responsibility to ratify treaties with a two-
thirds vote for congressional joinder in abrogating treaties.
That was changed, as I noted earlier, by President Carter in
1978. A large group of Senators, Goldwater, Helms, Thurmond,
Hatch, and others, joined with the position that it required
congressional assent to terminate a treaty.
I would like to have your comments on those two questions.

SO-CALLED ROGUE NATIONS

Secretary Rumsfeld. Well, Senator, with respect to the
first question the answer is yes, there are a number of other
countries that are sufficiently worrisome that have been active
in developing ballistic missile technologies and weapons of
mass destruction, and you named some of them.
One of the interesting things about life, if you think back
to Iran under the Shah, within a year the Shah was gone, and
the Shah had been a regional power, very friendly to the United
States. Within a year, it was the Ayatollah, a total change in
that country.
When the Senate confirmed Dick Cheney for Secretary of
Defense some 10 years ago, no one in the room raised the word
Iraq, and within a year, we were at war with Iraq.
If we know anything from history, it is that we cannot
predict the future. The nature of our world is that there is so
much proliferation of these technologies that we cannot know
from exactly what country or at what moment a threat will come.
What we can know is that those technologies are proliferating.
Therefore our strategies are looking more at threat-based
strategies, which is historically normal in the near-term, but
in the mid to far term, you are forced to look at capabilities-
based strategies, and look at the kind of capabilities that
exist in the world that are going to pose a threat to the
United States.
So the answer to that question is, absolutely, there are
any number of countries that we can see that are worrisome, and
there are any number, like in the case of Iraq and Iran, that
can shift in a matter of a few months.
With respect to the treaty, I am not an attorney, and I
think I will leave that question for the Department of Justice.

ABM TREATY

Senator Specter. Well, that is something that is going to
come before you, Mr. Secretary, because you are asking for very
substantial appropriations on missile defense. The ABM Treaty
is an integral part, and I can understand the legalisms
involved, but there is a question of public policy in dealing
with this committee, in dealing with Congress. Would you not
suggest a position on it?
Secretary Rumsfeld. Well, I will certainly say this. The
President has announced that his goal is to find an approach
with Russia where the treaty will be mutually agreed to no
longer inhibit the kinds of missile defenses which the
President has announced he believes are in the best interests
of the United States, and if he is able to achieve that kind of
an understanding and either set aside the treaty or move beyond
it with a new framework arrangement between the United States
and Russia, that would be his first choice.
Senator Specter. I see my red light is on, but of course I
have a very brief concluding comment. If there is an agreement,
then you will have the automatic concurrence of the Congress. I
think this is really not a legal issue for the Department of
Justice, Mr. Secretary. I think it is a public policy issue
which is going to involve the Department of Defense and the
Department of State.
Thank you very much.
Senator Inouye. I thank you, sir. Mrs. Hutchison.
Senator Hutchison. Thank you, Mr. Chairman.
Mr. Secretary, I wrote you very early in the year to say
that I have visited a number of our bases overseas, and at the
time you were also talking about the need to lessen the number
of bases in America, and I thought it was very important before
we took any action lowering the number of bases in our country,
that we know what our future force strength would be, what
would be the numbers, what would be the numbers based in
America for training purposes, what would be the numbers based
overseas. I asked you to consider doing an assessment of our
overseas deployments and report back.
The letter that I received back said that the Chairman of
the Joint Chiefs would be providing a master-basing concept
after the QDR results came in. I wanted to ask you what your
impression is at this point, if you have an idea of what we
would be looking at, when you think the QDR and then the
master-basing concept would be able to be brought forward, and
if you would suggest that we do any base closures in America
before we know what our troop strength and our strategy and our
QDR results will be?

QDR AND FORCE STRUCTURE

Secretary Rumsfeld. Senator, the QDR is going to be
concluded September 30. There will be some pieces of it, as I
mentioned, like National Guard and Reserves, which will follow
on, but the force decisions for the United States are going to
be made in the 2003 budget cycle, which is, as I say,
September, October, November, so that the President can present
his 2003 budget.
Dr. Zakheim is going to Europe, I believe next week, to
look at the European base structure situation, and you are
quite right, we clearly need to have a good understanding of
what our force structure is to be for the period ahead. We have
to know with respect to that force structure which portions of
it are likely to be based outside the continental limits of the
United States, and then we have to review the base structures
to see to what extent it fits that, and that is the process we
are going through.
Senator Hutchison. One of the things that struck me as I
was visiting some of our bases overseas is the training
constraints in some of those bases, whether air space
constraints or constraints on missile ranges on the ground.
Will that be a factor also in how you decide where the best
training would be for our troops?
Secretary Rumsfeld. It clearly would have to be, yes,
ma'am.
Senator Hutchison. General Shelton, did you have anything
to add to what the master base concept would be and when it
would be available?
General Shelton. It will take a while, Senator Hutchison. I
do not have a time on that right now. A lot of that would be
driven, of course, the magnitude of it, depending on what the
decisions are that came out of the QDR, but certainly the
capabilities with each of the bases would be something that
would have to be considered, and that is becoming, as you
indicated, in some areas more and more of a challenge for us
not only overseas, but here in the continental United States as
well.
Senator Hutchison. I think if you put that issue on the
table together with the fact that we have closed some bases in
our country which we then, 2 years later, determined that we
actually needed, and with the astronomical cost mentioned by
Senator Feinstein of the environmental cleanup, I would just
hope that all of that would be a part of the equation before we
go into making final decisions that could be more costly if we
have to reverse them or try to seek another base because we
have closed one that we actually needed.
The second question that I would ask you, General Shelton,
is regarding a piece of legislation that Senator Inouye and I
and Senator Stevens have introduced that allows anyone in DOD
who dies in the line of duty to be fully vested in the
retirement system. Today, you have to have 20 years before you
get fully vested in your retirement, and yet people can be
killed even in combat--and in training situations before the 20
years and not receive their full vesting of retirement benefits
for their families, so I just ask you if you do think that it
is important that we pass that legislation, and will it have a
big impact on the military budget if we do?
General Shelton. Senator Hutchison, from my standpoint it
certainly would be the right thing to do. As we have talked a
lot about here today, in tight times where we have, as the
Secretary and I have indicated, in many places metal on metal
contact, so to speak, in terms of the requirements versus the
amount of funding available to carry them out, anything that
adds an increase to the service budgets that is not currently
projected causes great concern on their part.
Without knowing what the magnitude--I have not seen any
studies that show what it will be. Certainly, from my best
military advice, it is the right thing to do for our people.
Again, we would have to be careful that we look at the amount
of funding required and identify a source for that funding
before we implement it, but again, I would recommend that we
proceed in that manner, and I fully support the legislation
that would provide it for our servicemen and women.
Senator Hutchison. Well, I think the number of training
accidents that we have is fortunately very few, and we know we
will keep it that way, so I would think it would have a minimal
impact, but it certainly is the right thing to do. We
appreciate your support.
Thank you, Mr. Chairman.
Senator Inouye. I thank you very much, Senator.

ADDITIONAL COMMITTEE QUESTIONS

Mr. Secretary, General Shelton, on behalf of the committee
I thank you very much for your presence here today. Your
comments and your responses to our questions have been most
helpful.
I am certain from the questioning and comments you have
gathered the concern about the challenge before us, balancing
of defense needs and the budget situation, so I hope that we
can continue to work together to come forth with a solution
that all of us can agree upon.
And once again, General Shelton, I must say that we are
most grateful to you for the service you have rendered to the
people of the United States over the years. You have made your
career one that all of us could be very proud of, and we thank
you very much, sir.
General Shelton. Thank you very much, Mr. Chairman.
Senator Inouye. We wish you much success and happiness as
you retire from this career.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]

Questions Submitted to Hon. Donald H. Rumsfeld

Questions Submitted by Senator Tom Harkin

IOWA ARMY AMMUNITION PLANT (IAAP)

Question. Secretary Rumsfeld, can you tell the workers at IAAP
today that they can talk about exposures at the plant with their
doctors, with environmental cleanup officials, and with health
researchers without violating any secrecy oaths or policies?
Answer, Yes. Neither secrecy oaths nor policies prohibit any
citizen from discussing exposures to radioactive and hazardous
materials with their healthcare professionals or other appropriate
officials. Individuals bound by secrecy oaths at former defense nuclear
weapons facilities, therefore, may respond to questions regarding
possible exposures at the plant provided they do not reveal classified
information.
Question. The workers on the Army side of IAAP were exposed to many
of the same toxic high explosives and radioactive materials as those on
the AEC side of the plant, sometimes worked in the same buildings and
areas, and were employed by the same contractor. Do you think they
deserve the same treatment?
Answer. I do, which is why I have authorized the development of a
plan to identify, notify and provide security guidance to former and
current personnel who worked at former Department of Defense nuclear
weapons facilities that they may discuss possible exposures to
radioactive or hazardous substances associated with nuclear weapons
with health care providers and other appropriate officials, as long as
they do not reveal classified information.
Question. Currently the locations of former nuclear weapons storage
sites within the United States are unclassified, but are still covered
by the so-called ``neither confirm nor deny'' policy. When Army
officials can't say the word ``nuclear'' in connection with a plant
that everyone knows was a nuclear weapons facility, it sends the wrong
signal to former workers who are afraid to talk about it. Now, I don't
see why the function of a plant that closed in 1975 would be a security
risk, so why can't you talk about it?
Answer. Security classification is not the issue regarding the
activities at the Iowa Army Ammunition Plant (IAAP). Classification has
no direct bearing on a response to a question regarding the presence,
or absence, of nuclear weapons. As long as there are, however,
classified locations of nuclear weapons, official spokespersons for the
U.S. government are prohibited from confirming or denying the presence
of nuclear weapons at any general or specific location. The basis for
this requirement is to deny militarily useful information to potential
or actual enemies, to enhance the effectiveness of nuclear deterrence,
and to contribute to the security of nuclear weapons, especially
against threats of sabotage and terrorism. This is a policy that acts
to protect individuals from inadvertently revealing classified weapon
locations stemming from a series of media queries and responses to
them. In response to public affairs questions concerning the general or
specific location of nuclear weapons, the response--Neither Confirm Nor
Deny (NCND)--will always be given, even when the location is thought to
be known or obvious.
Question. Do you think it makes the government look foolish when
the Energy Department says a plant assembled nuclear weapons, but the
Defense Department won't admit the weapons were there?
Answer. Former nuclear weapons sites within the United States are
unclassified. However, it is the policy of the U.S. Government to
neither confirm nor deny the presence or absence of nuclear weapons at
any location independent of the classification. The basis for the
security requirement inherent in the U.S. policy of neither confirming
nor denying the presence or absence of nuclear weapons is to deny
military useful information to potential or actual enemies, to enhance
the effectiveness of nuclear deterrence, and to contribute to the
security of nuclear weapons, especially against threats of sabotage and
terrorism.
Question. A document recently released by the Pentagon stated that
the United States had nuclear weapons in Alaska, Cuba, Guam, Hawaii,
the Johnston Islands, Midway, Puerto Rico, the United Kingdom, and West
Germany. After the document was released, a Department spokesman said
on television that the United States never had nuclear weapons in
Iceland. Why can the Pentagon talk about nuclear weapons in Alaska and
Iceland but not in Iowa?
Answer. In response to public affairs question about the general or
specific location of nuclear weapons, the response, neither confirm nor
deny, will be given even when such location is thought to be known or
obvious. The purpose is to deny militarily useful information to
potential or actual enemies, to enhance the effectiveness of nuclear
deterrence, and contribute to the security of the weapons. Documents
released through the Freedom of Information Act (FOIA), 5 U.S.C.,
Sec. 552, follow the classification procedures established under EO
12958, Classified National Security Information, 17 April 1995, and the
security guidance mandated for Formerly Restricted Data.
Question. In 1999 the Army asked for former nuclear weapons storage
sites to be excluded from the ``neither confirm nor deny'' policy for
similar reasons, but the request was denied. Army officials have told
me this is still a problem for them. Will you reconsider that request?
Answer. It is my understanding that the Army is no longer pursuing
such an exception.
Question. In my letter to you I requested a timeline for
implementing the amendment. I still have not received that. Please
provide a timeline for the review of security policies, for the
notification of workers, and for the report to Congress.
Answer. The policy, procedures and implementing guidance for a
program to comply with section 1078 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 will take time to
develop and sufficient funds to implement. As a comparison, the Nuclear
Test Personnel Review (NTPR), which is a program to identify military
personnel who participated in our atmospheric nuclear test program, has
cost $225 million to execute to date and has been in progress nearly
twenty-four years. As soon as the Department of Defense has a plan and
the estimated resources to complete it, you, as well as the appropriate
congressional committees, will be notified.
Question. The letter from Mr. Verga hints that it may be difficult
to find all the former workers who are supposed to be notified under
the amendment. But we do know the workers at the Iowa plant and have
records for them. Will you ensure that these Iowa workers are notified
quickly while efforts continue to identify other covered workers?
Answer. It is my intent to comply with the law and we appreciate
any assistance that you can provide regarding the records of the Iowa
workers. I intend to work the problem in a comprehensive manner with a
realistic plan of action. In the spirit of fairness I think that it
would be improper to single out Iowa workers for quick notification
since the law requires me to notify all other workers who were, or are,
engaged in activities as defined in section 1078.

MEETING THREATS TO U.S. NATIONAL SECURITY

Question. Today you emphasized that spending on national missile
defense is a small percentage of the total Defense Department budget
and that ballistic missiles are just one of several threats to our
security. Could you provide the funding level in the Defense Department
fiscal year 2001 budget and in the fiscal year 2002 proposed budget
that is allocated for defense of U.S. territory against each of the
following weapons of mass destruction and possible delivery systems?
--Ballistic missiles
--Cruise missiles
--WMD smuggled into the U.S. (``suitcase bomb'')
--WMD made in the U.S. by terrorists
--Conventional attack on a U.S. nuclear plant or chemical plant
--Biological weapons
--Chemical weapons
--Nuclear weapons
Answer. With the exception primarily of missile defense, Department
of Defense spending does not have funding categories for specific
threats. The entire DOD budget is geared to deterring and defending
against all categories of threats, such as those cited in your
question. America's military presence and ability to respond in any
major global region is the foundation of our protection of U.S.
territory and U.S. interests overseas.
A specific example: Our global naval presence and dominance serves
as our primary protection against cruise missiles launch or other
weapons launched from hostile ships. Our DOD capability is also
supported by Coast Guard capabilities. But as this example shows, one
cannot take the total Coast Guard budget, plus our total Navy budget,
and say that that is what we spend to defend against cruise missiles.
That spending is to counter all threats to the United States and its
interests, not just cruise missiles.
In sum, total DOD spending aims to deter and defend against all
weapons (nuclear, chemical, biological, and conventional) and all means
of delivery (long-range ballistic missiles, cruise missiles, aircraft,
naval vessels, etc.) There are no subcategories for each type of weapon
or each means of delivery.
The one subcategory that does exist and has meaning is Ballistic
Missile Defense, which seeks to defend the U.S. homeland against
ballistic missiles carrying any category of weapon (nuclear, chemical,
biological, or conventional). For BMD, the fiscal year 2002 budget
request was $8.3 billion, and the fiscal year 2001 budget was $5.4
billion.
For threats within American borders (WMD smuggled into the United
States, WMD made in United States by terrorist, and conventional attack
on American nuclear plants or chemical plants), virtually all of our
nation's protection against these threats is provided by non-DOD
entities: private security arrangements to protect non-government
facilities, state and local police, and the FBI and other federal
agencies. DOD spending does cover protection of its facilities against
terrorist threats, but again there is no meaningful spending
subcategory. DOD spending for police and security at its facilities
does go solely or even largely for protection against terrorist
attacks; such spending goes also for traffic control, crime prevention,
etc.
______

Questions Submitted by Senator Richard J. Durbin

ROCK ISLAND ARSENAL

Question. I would like to take this opportunity to tell you of my
strong support for the Army Arsenals, the Rock Island Arsenal in
particular. The Arsenals play a very important role in protecting our
defense industrial base, yet have languished in a ``Catch-22''
situation of having to cover costs of extra capacity that is being held
in reserve in case of war. I would welcome your support for the role of
the arsenals.
Recent efforts by the Army Materiel Command to urge Army program
managers to use the capabilities at the arsenals has resulted in the
first significant hire of workers at the Rock Island Arsenal in over a
decade. This policy helps arsenals maintain the skills and capabilities
needed to meet national mission requirements. It also largely does not
affect private industry because it taps the arsenals for work that is
mostly specialized and not done easily by private manufacturers. Can we
count on you to continue this policy?
Answer. We will continue this policy. In October 1999, the Army
issued written guidance that clarified longstanding policy requiring
all Army acquisition organizations, including program managers, to give
preferential cost treatment to Army arsenals and factories when making
source selections for direct sources of supply. This policy follows
generally the Comptroller General's consistent interpretations of the
Army Arsenal Act. Subsequently, in February 2000, the Secretary of the
Army initiated a review of mission needs that drive retention of
industrial reserve capacity with a particular focus on meeting those
needs without distorting the economics of program acquisition
decisions. RAND has been asked to recommend alternatives for the Army.
This should lead to a comprehensive arsenal and ammunition plant
strategy.

155 MM HOWITZER PROGRAM

Question. I am troubled by the significant problems in the 155 mm
Lightweight Howitzer program. Two successive GAO reports show
continuing and growing problems that raise serious questions about
whether this system will ever be built. We now have a gun that may
always have cracks in important titanium components and that may be
impossible to accurately aim. I am also concerned that the design flaws
will make the Howitzer very difficult to manufacture. This is a vital
capability that many of our young soldiers will have to stake their
lives on. Have you looked at this program? Have you considered
terminating the program and re-competing it?
Answer. The Lightweight 155 mm Towed Howitzer (LW155) will provide
a lightweight, highly mobile and deployable fire support system to our
expeditionary forces and brigade combat teams. The Marine Corps has
made a significant investment in this program and the issues identified
by the GAO have been addressed in the current design of the weapon.
Initial contractor testing on the first weapon (August 2000)
revealed one minor crack in the spade. The crack was repaired in the
field and the weapon continued firing without recurrence. Subsequently,
the spade design was strengthened and there have been no additional
issues with regards to cracking in the spade or elsewhere on the
weapon.
Accuracy of the weapon remains a risk area, however there have been
significant improvements made during development by stiffening the
structure, tightening tolerances, improving the fire control linkage
and insulating key components from thermal effects. The adequacies of
these improvements are being assessed as part of the ongoing
developmental testing.
BAE SYSTEMS has already delivered five weapons. Three additional
weapons will be delivered by year-end, and they have selected their
U.S. partners to produce more than 70 percent of the LW155 in the
United States. They have resolved the initial issues with weld
distortion and have introduced castings to improve manufacturability
and reduce cost. To mitigate the risk associated with transitioning
production from the United Kingdom to the United States, the current
contract with BAE SYSTEMS was modified to incorporate the manufacture
of two pilot production weapons using the selected U.S. production
partners. The Pilot Production effort will provide additional data to
demonstrate readiness for production.
While it is fair to say that this program has had some
difficulties, issues of this nature are not uncommon for programs at
this stage of development. It is in the best interest of the Marine
Corps and the Army to assess the results of the ongoing testing to
confirm the program's readiness to support a low rate production
decision late next year.

FUTURE STRATEGIES AND BASE CLOSURES

Question. Many defense planners say that the United States may have
to respond to an ``anti-access strategy'' by potential enemies which
will make it more difficult to maintain our forward bases in certain
hot spots around the world, making us rely on long-range systems to
project military power. If the United States will have to pull back
from some foreign bases to bases in the continental United States, it
seems that, in 10 or 15 years, we may need some of the bases some think
we could do without today. Did you consider this issue when you
recommended another round of base closures?
Answer. Yes, we did. A provision regarding overseas basing
considerations, which was included in the Administration's proposal, is
also incorporated in the Senate version of pending base closure
legislation. That provision requires that the Department consider the
anticipated continued need for and availability of military
installations worldwide. In evaluating the need for military
installations inside the United States, this provision also requires
the Department to take into account restrictions on the use of military
installations outside the United States and the potential for future
prohibitions or restrictions on the use of such military installations.

BALLISTIC MISSILE TESTING AND THE ABM TREATY

Question. Phillip Coyle, former Pentagon Director of Operational
Test and Evaluation said there is no reason presented by the current
missile defense test schedule that the United States would need to
withdraw from the Anti-Ballistic Missile (ABM) Treaty this year
specifically, causing you to say that we may need to if no agreement
can be reached with Russia?
Answer. The Administration redesigned the missile defense program
to a robust research, development and testing program designed to give
us deployment options in the 2004 to 2008 period. As a result, the new
program requires the ability to do the following: use all available
sensors to support missile defense testing; pursue all basing modes
(air, sea, mobile-land, and space); share ARM technology with friends
and allies, testing without any distinction between shorter and longer-
range defense; concurrent testing of ARM and non-ARM components; and
finally, no numerical or geographic restrictions on test assets.
The assertion that the ARM Treaty is not currently hindering our
test program not is incorrect. On October 25, 2001, we announced that
four missile defense test activities planned for this fall are
cancelled because they might have violated the ABM Treaty. Three of the
test activities involved the use of sea-based radars aboard IJ.S. Navy
Aegis ships to track missiles and a Titan II space launch vehicle,
while the fourth activity involved the use of a ground-based radar at
Vandenberg Air Force Base in California to track a missile during an
upcoming missile defense flight test.
Since taking office, the Bush Administration has stressed that we
will not violate the ARM Treaty as long as we are a party to the
agreement. The President has directed the Defense Department to examine
all available technologies and basing modes for missile defense and to
construct the most efficient and effective testing program, without
respect to the ARM Treaty. As the Administration has said for several
months, because we have adopted this approach, our missile defense
program would inevitably encounter the constraints of the ARM Treaty,
which has now occurred.

RUSSIA'S SECOND STRIKE CAPABILITY AND MISSILE DEFENSE

Question. A panel of scientists released a report in June called,
Toward True Security, A U.S. Nuclear Posture for the Next Decade, which
reported that, on any given day, Russia actually only fields 100
strategic weapons that it can consider safe from a U.S. first strike.
Why then, wouldn't even a relatively modest missile defense system be
considered by Russia to neutralize their small deterrent capability?
Answer. The success of U.S. policy is not now, nor has it ever
been, based on carrying out a nuclear first strike on Russia. U.S.
missile defenses will not pose a threat to the Russian strategic
deterrent even at drastically reduced levels. The missile defense
system we intend to deploy will be capable against a few handfuls of
RVs, not a large-scale attack. Furthermore, while Russian strategic
nuclear capability may decline to 2,000 weapons over the next decade,
it will still be a significant force.
Further, the Cold War is over and Russians are seeking the benefits
of democracy. Our foreign policy is designed to encourage Russia's
continuing moves towards democracy and free enterprise as we build an
entirely new relationship based on mutual trust, friendship and
cooperation.

VIEQUES

Question. I believe it is time, now, for the United States to pull
out of Vieques. The handwriting has been on the wall for a long time
now that it was time for the Navy to find alternative training
arrangements.
What is DOD doing to find alternatives to Vieques?
Answer. The real issue here is effective training for our Sailors
and Marines. The Department of the Navy has a study in progress to
identify combinations of methods, places, and technologies that could
provide the equivalent readiness levels now attained using the range on
Vieques. The results are due out in the Spring of 2002 and it is
premature to predict the study findings.
A previous study was unable to find a single site alternative to
Vieques, and that conclusion, by all indications, remains valid. In
addition to the impact area on Vieques, the collocated sea, air, and
land maneuver space is valuable to national defense readiness.
______

Questions Submitted by Senator Harry Reid

SHORT-TERM AND LONG-TERM NEEDS

Question. The Defense Department needs to address both short-term
and long-term needs. These include quality of life, readiness,
modernization, transformation, and missile defense. How will priorities
be set in light of potential budget shortfalls? In other words, what
programs would be most seriously impacted by cuts in the defense
budget? Is missile defense sacrosanct?
Answer. My discussions with congressional leaders indicate that
they we all share the conviction that we must not shortchange U.S.
defense. If shortfalls occur, the most likely programs hurt would be
long-term modernization to transform America's armed forces. If cuts
were required, no programs should be considered sacrosanct.

F-22 STEALTH FIGHTER

Question. During a visit to the Hill earlier this year, Air Force
General David Deptula said the F-22 provides a huge asymmetric fighting
advantage for U.S. pilots. What do you see as the role of the F-22
stealth fighter in the force structure? Is it an essential element of
defense transformation?
Answer. The F-22 will fulfill a wide and diverse array of roles in
the military's force structure. In military operations, the F-22 will
provide air superiority to all components of the Joint Force, be
instrumental in attacking mobile targets, and be capable of overcoming
anti-access threats. The F-22's integration of advanced stealth,
supercruise, and fused data avionics make it capable of attacking all
types of targets across the width and breadth of any high-threat
environment theater. Based on its capabilities, it should come as no
surprise that recent press accounts acknowledge that the Secretary of
the Air Force plans to make the F-22 the weapon system of choice within
the Air Force for hunting and destroying mobile targets. While gaining
access through reliance on advanced stealth and supercruise, the F-22's
fused avionics will link off-board and on-board sensors with the most
lethal, precise, and autonomous munitions in the U.S. arsenal to permit
destruction of even the most challenging targets.
The characteristics and capabilities that are distilled into the F-
22, basically result in a weapon system that synthesizes what was
previously required of many different aircraft. The advanced stealth,
supercruise, and fused avionics of the F-22 are all force multipliers
that allow a single F-22 to achieve unprecedented operational effects
and multiple or numerous F-22s to achieve strategic effects.
The advent of previous stealth fighters into the force structure
had a similar strategic effect for the United States. The use of the F-
117 stealth fighter in Desert Storm is a prime example. The F-22's
stealth capability is a generation ahead of the F-117 and even more
advanced than the B-2 guaranteeing the preservation of a key asymmetric
advantage of the United States. Open source accounts reveal that the F-
22's radar cross section (RCS) is just the size of a marble compared to
the F/A-18's beach ball size. This advanced generation of stealth
permits the F-22 to operate in threat environments posed by advanced
SAMs, like the S-300 series and double-digit types (SA-10, -12, -20)
that legacy systems simply cannot survive within in the future.
The F-22 is the only aircraft in the world capable of supercruise--
flying supersonic without a gas-guzzling and high infrared source
afterburner. Supercruise provides the F-22 with many force multiplying
effects. The ability to fly supersonic and not rely on an afterburner
to do so permits the F-22 in effect to increase its high-speed range
over legacy fighters since it does not burn up its fuel at as fast a
rate. Also, when combined with the F-22's high altitude capability
(10,000 feet above most other aircraft) supercruise provides a
``booster'' effect to air-to-air combat increasing the range of its
missiles by 50 percent due to additional velocity. Supercruise permits
the F-22 to engage in warfights where it is outnumbered and attack from
a position of safety.
The integrated or fused avionics of the F-22 is another unique
force multiplying characteristic. The fused avionics of the F-22 allow
the routing of all the sensors through a central computer process that
will analyze all inputs and present a simplified and accurate picture
to the cockpit on an active-matrix liquid crystal display. This will
provide a pilot maximum situational awareness and a reduced taskload.
Fused avionics also give the F-22 electronic warfare capabilities
possessed by the EA-6B and F-16CJ. The F-22's dedicated radar system
provides 360 degree coverage in all bands and detect emitters at ranges
exceeding 250nm, while its passive system permits the tracking and
shooting of multiple aircraft by one undetectable F-22. The ``Raptor''
will have a ``first-look, first-shoot, first-kill'' capability on
multiple targets. Further improvements in the F-22's fused avionics
capability and the adoption of new operation concepts will result in
next generation approaches to Suppression of Enemy Air Defenses (SEAD)
and Destruction of Enemy Air Defenses (DEAD) along with ``hunter-silent
killer'' attacks against mobile targets using two F-22s and their
associated datalinks.
In conclusion, with its unique characteristics the F-22 is the
premiere multi-role weapon system of the United States Air Force. It
will assume the duties of multiple past legacy platforms and meet them
readily, ensuring that the United States asymmetric advantage in
aerospace power persists into the 21st century. The F-22's advanced
capabilities ensures its place in the future force structure as a ``go-
to'' system to meet the 21st century requirements for destroying
targets and assuring air superiority. The F-22 is needed to give the
U.S. military the freedom to attack and freedom from attack in high
threat environments. As important as its role in the future force
structure is the F-22's role in the new defense strategy of the nation.
The 2001 Quadrennial Defense Review (QDR) Report outlined a new
defense strategy, built around four defense policy goals: Assuring
allies and friends; dissuading future military competition; deterring
threats and coercion against U.S. interests; and if deterrence fails,
decisively defeating any adversary.
The F-22 while just one weapon system in the nation's national
security toolbox supports each one of these pillars of the new defense
strategy. The F-22 has capabilities that no other aircraft in the world
possesses. Our allies and friends around the globe do not have the will
or capability to provide the type of air superiority or target
destruction effects that the U.S. military does. The fact is that when
needed, American allies rely upon us to provide unmatched air
superiority and overwhelming yet precise attack capability from the
air. The F-22 assures allies that such reliance on the United States
should continue.
The concept of dissuasion is a recent addition to the strategic
lexicon of the United States. The QDR acknowledges that the United
States can exert influence over the nature of future military
competitions and complicate potential adversaries' future military
planning in part by maintaining or enhancing advantages in key areas of
military capability. In other words, this influence can ``dissuade'' a
future adversary from pursuing a certain military modernization effort.
The F-22's unparalleled effectiveness against advanced Surface-to-Air-
Missiles (SAMs) and foreign aircraft potentially will assist in
dissuading nations from pursuing development and procurement of such
systems, particularly if a large number of F-22s are fielded quickly by
the United States.
As the public advertisements for the Raptor state, ``the first
thing it kills is the enemy's appetite for war.'' This is pure
deterrence. The F-22 ensures the United States will go for overmatching
not just meeting its future opponents both in the air and on the
ground. Knowing this, potential enemies may disengage from threatening
U.S. interests, being deterred. However, when not deterred the enemies
of the United States will face the prospect of decisive defeat. The F-
22's role in being part of imposing that decisive defeat will be great.
No matter what the F-22 is contributing whether it be the destruction
of advanced SAMs or defense against cruise missiles, to the pursuit and
annihilation of mobile targets or protection of joint and coalition
forces, it will be needed should deterrence fail.
Not only is the F-22 capable of completing multi-mission roles and
being a key tool in implementation of the new defense strategy, but it
is also an essential element of defense transformation. The F-22's
incorporation into the force structure will permit the eventual
retiring of legacy air systems to old to operate in peacetime and to
vulnerable to fly in wartime. The F-22 will be easier to operate.
Lastly, through the use of new operational concepts and the innovative
integrating of technologies the F-22 will spearhead another
transformation of warfare.
The Air Force approach to transformation is one of consistency and
completeness. The Air Force defines transformation as fundamental
change involving three principal elements and their interactions with
one another: Advanced technologies, which, because of the new
capability they yield, enable new concepts of operation that produce
order-of-magnitude increases in our ability to achieve desired military
effects, and organization change that codifies the changes in the
previous elements or significantly enhances our ability to execute our
national security strategy from the Air Force point of view, military
transformation involves much more than the acquisition of new systems.
For this reason, although the F-22 is an essential element in the
current defense transformation it is by no means the only element. The
F-22 paired with small-diameter bombs capable seeking mobile targets is
more transformational than an F-22 armed with current or legacy
munitions. The air superiority provided by the F-22 is worthless
without future ground combat systems or other air combat systems
operating within it. New Intelligence,Surveillance and Reconnaissance
(ISR) platforms both manned and unmanned are needed along with new
space-based systems. Without new concepts of operations such as the
Global Strike Task Force, the F-22's operational role with other
systems such as the B-2 and JSF remains undefined.
The F-22 is a key element of the Air Force's continuing
transformation. The F-22's advanced capabilities allows the Air Force
to replace multiple systems with it, and still fight in different and
more effective ways. The F-22 signifies a move away from the one-for-
one weapon system replacement approach too often used as procurement
strategies. The F-22 will transform the way the Air Force and the
United States fights wars. The F-22 as a provider of air superiority
will paralyze and neutralize an enemy's air defenses at the outset of
war, making follow-on military operations incomparably less risky and
more effective. As a strategic strike asset, the F-22 will deliver
several precision weapons with high accuracy and low risk across the
breadth and width of an enemy territory against time-sensitive targets.
Simply stated, the F-22 provides the United States with an asymmetric
advantage it cannot forgo.

SIERRA ARMY DEPOT

Question. The Sierra Army Depot, just 55 miles from Reno, was
California's leading air polluter during 1999 and poses a significant
health threat to northern Nevada. The Army continues to use open
burning and detonation to dispose of munitions, which according to the
EPA, discharges millions of pounds of toxic chemicals into the air
every year. I'm requesting support in this year's defense budget for a
project at the Hawthorne Army Depot in Nevada to develop a safe viable
alternative to open detonation of munitions. What are the Department's
plans to develop safe and environmentally friendly technology to
demilitarize large quantities of ammunition/explosives?
Answer. The report implicating Sierra Army Depot as California's
leading air polluter in 1999 was a mistake based on incorrect
assumptions. The corrected data was resubmitted showing that Sierra was
never the leading air polluter. The Department of Defense is committed
to developing alternative technologies for the safe, environmentally
friendly demilitarization of excess, obsolete, or unserviceable
ammunition and explosives and has been engaged in an active research,
development, testing, and evaluation program since the early 1990's.
Hawthorne Army Depot, for example, is home to the Western Area
Demilitarization Facility (WADF) which has the capability to
demilitarize ammunition through resource recovery versus destructive
methods. In fiscal year 2001, funds were received to initiate
optimization of the hot gas decontamination facility at WADF, thereby
greatly enhancing WADF and DOD's capability to explore fully
alternative technologies. Work on the project continues.

NEW FORCE-SIZING

Question. Based on what we read in the press, the QDR will spell
out a new force-sizing requirement of being able to win one war
decisively, while repelling and defeating aggression in another part of
the world. If the United States isn't prepared to fight a war on two
fronts, doesn't that provide an invitation to China to initiate a major
conflict with Taiwan when the United States is engaged in a major
conflict in another part of the world?
Answer. Under the new force-sizing construct in the 2001 QDR
Report, U.S. forces will be shaped to defend the United States, deter
aggression and coercion forward in critical regions, swiftly defeat
aggression in overlapping major conflicts, decisively defeat the
adversary in one of those conflicts, and conduct a limited number of
smaller-scale contingency operations.
The new construct serves as a bridge from today's force, developed
around the threat-based, two major theater construct, to a further,
transformed force. The United States will continue to meet its
commitments around the world, including Southwest and Northwest Asia,
by maintaining the ability to deter aggression in two critical areas in
overlapping timeframes. The United States is not abandoning planing for
two conflicts to place for fewer than two. On the contrary, DOD is
changing the concept altogether by planning for victory across a
spectrum of possible conflict.
______

Questions Submitted by Senator Dianne Feinstein

NATIONAL MISSILE DEFENSE PROGRAM

Question. As I understand it, one of the problems in convincing
China that the National Missile Defense (NMD) is not aimed at them is
that regardless of what architecture is under consideration even a
rudimentary system is well configured to counter the threat facing the
United States from China's nuclear missile forces. What is your
understanding of this issue? If U.S. development and deployment of NMD
causes China to seek to ``break out'' and deploy additional nuclear
missiles, will NMD have served its objective of making the United
States more secure from the threat of nuclear attack, or will it, in
fact, have made us less secure? Are there alternate NMD architectures
that might address some of China's concerns?
Answer. The United States has been working to make clear to China
that the U.S. missile defense program does not threaten them. Our
missile defense program is designed to counter the comparatively
limited missile threat from rogue states and the possibility of an
accidental or unauthorized launch. Only those foreign actors with
hostile intent towards the United States and its interests have reason
to be concerned about U.S. missile defenses.
China's modernization efforts predate the U.S. missile defense
program, and China will increase the size and capabilities of its
nuclear arsenal regardless of U.S. BMD-related actions. Thus, linking
the modernization of China's offensive nuclear forces to U.S. missile
defense efforts is misleading. In our continuing consultation with the
Chinese, we have told them that their ongoing modernization efforts are
unnecessary and injurious to regional stability. Missile defense--which
is one element of a broader U.S. strategy to combat the proliferation
of missiles and weapons of mass destruction--can contribute to that
stability.

MISSILE DEFENSE PLANS

Question. According to a story earlier this year in the Russian
periodical Nezavisimaya Gazeta, Russia and China have held talks on a
defense treaty designed ``to oppose U.S. influence and to counter the
Pentagon's plans to create an anti-missile shield in America and a part
of Asia.'' Are you concerned that U.S. plans for missile defense may
drive increased Russian-Chinese security cooperation? How should the
United States react to closer Russian-Chinese security ties?
Answer. Since that story appeared, Russia has indicated a
willingness to move forward on its relationship with the United States
irrespective of U.S. plans to move beyond the ABM Treaty. The United
States has been regularly discussing our missile defense plans with
both Russia and China. These discussions are part of an effort to
create a new strategic framework. We are encouraged by our progress to
date and are confident that this new framework can be achieved.

NATIONAL MISSILE DEFENSE

Question. According to a September 2, 2001 story in the Washington
Post, an administration official indicated that as a ``sweetener'' for
China to accept U.S. plans to test and deploy NMD, the United States
would ``signal that it recognizes both sides might want to resume
nuclear weapons testing in the future.'' An article in The New York
Times, also on September 2, 2001, indicated that the Administration
planned to abandon its objections to a Chinese nuclear and missile
buildup in an effort to overcome China's opposition to NMD. What is the
Administration's policy regarding engaging China on National Missile
Defense? Has or will the Administration signal to China, either tacitly
or otherwise, that it can go forward with nuclear testing or a nuclear
or missile buildup? Are you concerned that such a course might set off
a nuclear arms race in Asia? If China tests nuclear weapons or seeks to
build up its nuclear or missile forces, what is your expectation of how
India might react? Pakistan? Other countries in the region?
Answer. These press stories are incorrect. The United States will
not seek to overcome China's opposition to missile defense by telling
the Chinese that we do not object to an expansion of their nuclear
ballistic missile force or that we would accept their resumption of
nuclear testing. The Administration's policy is to reduce the level of
offensive nuclear weapons in the world, to lessen the risk of nuclear
war, and to protect the United States and its military forces, allies,
and friends from the threat of ballistic missile attack. In that
context, the Administration is committed to holding intensive
discussions with China.
______

Questions Submitted by Senator Herb Kohl

MISSILE DEFENSE PRIORITY

Question. As we all know, our budget is turning out to be much
tighter than we imagined it would be earlier this year. We have very
little money to work with for fiscal year 2002, and a host of
priorities on which we all agree we should spend significant funds--a
prescription drug benefit, education reform, NIH research, crime
fighting, etc. Not the least of these priorities are your plans to
modernize our nation's defense system.
Given all these great needs, and our dwindling federal resources,
can you explain to me why now the time to pursue the possibly
unattainable goal of completely walling ourselves off from outside
threats with a massive, untested missile defense system? Is this really
this best time--financially and in terms of the threats that we
actually face--to take such a high cost gamble?
Answer. The priority the Department places on missile defense
reflects the current Administration's understanding of the growing
threat the United States faces from short-, medium-, and long-range
ballistic missiles. While we are just beginning to field systems to
reliably counter the shorter-range threats, there is still much work to
be done before we will be in a position to deploy capabilities to
protect United States and allied cities and troops against the emerging
longer-range threats from rogue states, whose leaderships may use these
offensive capabilities for purposes of terror, coercion, or aggression.
While we currently have deployed many systems to counter threats
from the land, sea, and air, and we have initiatives and operations to
take care of numerous other defense needs, today we have no capability
against longer-range threats against the American population. Nor do we
currently have a capability to defeat the medium- and intermediate
threats that could threaten our troops and allied and friendly cities
this decade. Much like the threat we expect to face, the Ballistic
Missile Defense System we are endeavoring to deploy is unprecedented.
The Administration will pursue a robust missile defense research,
development, test, and evaluation (RDT&E) program to acquire the
capabilities to deploy limited, but effective missile defenses as soon
as possible to protect the United States, our deployed forces, and our
friends and allies. The proposed missile defense funding for fiscal
year 2002 represents our commitment to developing a rigorous test
program, which will be essential to our ability to determine which
technologies and basing modes will be most effective against what by
all measures is a very dynamic threat. Early deployed capabilities may
be expected to provide more protection than we currently have.
Missile defense technologies have been under development for years.
Many of the technologies required to build an effective BMD system are
in hand and are improving year by year. The challenge before missile
defense developers is in engineering the system. We will increase our
knowledge of system capabilities over time through our RDT&E
activities, and especially our testing program. These activities will
give us a sound understanding of the technological and engineering
possibilities inherent in the system we intend to deploy.

ADDITIONAL FUNDS

Question. According to a recent editorial the budget you have sent
to Congress is larger after adjusting for inflation than some of the
budgets you prepared in the Ford Administration. With spending at 90
percent of the Cold War levels--but with no threat like the former
Soviet Union in sight, why do we need the extra $18 billion in funds
for fiscal year 2002 just recently requested by the Administration?
Answer. The $18 billion is needed to begin to bolster our readiness
and capabilities to counter 21st century threats like terrorism.

REDUCTIONS

Question. If we cannot find the extra $18 billion you have
requested without severely cutting back other budgeted priorities, can
you make reductions in your own budget to cover these new initiatives?
Answer. If the President's full request was not appropriated, the
Department's alternatives would be to try to find reductions that would
not undermine current high priorities like fighting terrorism (almost
impossible) or urging the President to request supplemental fiscal year
2002 appropriations.

MILITARY HEALTH CARE

Question. Part of the 2001 Supplemental included funds for military
retiree health care. Many retirees in the state of Wisconsin have
contacted my office because they cannot find health care providers
willing to accept TRICARE Prime. Wisconsin is a primarily rural state
with no active duty bases so doctors are not familiar with DOD health
programs. What is the Administration doing to promote TRICARE Prime and
ensure the retirees have choice no matter where they live?
Answer. We are working hard to assure an adequate provider network
in Wisconsin. The Prime service area now includes 403 specialists and
166 Primary Care Managers.
There are a number of efforts ongoing within Wisconsin to improve
access for all of our beneficiaries in the state. In the majority of
highly populated areas, TRICARE networks are in place. There is a
TRICARE Service Center located in the Royce Federal Plaza in Milwaukee
that assists beneficiaries with information about providers who accept
TRICARE. They may be reached at 1-800-941-4501 during normal business
hours. As part of the ongoing effort to enhance services in rural
areas, TRICARE lead agent staff from Region 5 are now working with the
County Veterans Services (CVS). The CVS will work closely with Humana
Military Healthcare Services and Region 5 staff to help inform people
about TRICARE in their home counties.
Humana is also working with the Department of Veterans Affairs
(DVA) to offer more choice to TRICARE beneficiaries. Negotiations are
underway in Veterans Integrated Service Network (VISN) 12, which
includes facilities in Chicago and the state of Wisconsin. The VISN 12
network includes three DVA medical centers and several outpatient
clinics. This contractual arrangement will allow additional network
choices for TRICARE beneficiaries in the state of Wisconsin.

OPERATIONS TEMPO

Question. Patrolling the no-fly zones in Northern and Southern Iraq
seem to be the most exhausting and difficult missions for the
services--especially since these missions have gone on for almost ten
years. Is the Administration developing alternative methods for
accomplishing these missions that do not entail increasingly dangerous
overflights?
Answer. In the aftermath of the September 11 attacks, President
Bush is ruling out no alternatives with respect to troubled regions--
notably including the region in and around Iraq. Still, the operations
tempo of our armed forces is increasing and likely to remain high as we
focus on defeating global terrorism.

BASE CLOSURE AND EFFICIENT FACILITIES INITIATIVE

Question. I am glad to see the Administration has outlined a
proposal to reduce unneeded defense infrastructure. Another round of
base closures has the potential to save the Department of Defense
billions of dollars in the long run. Is the Administration's Efficient
Facilities Initiative more insulated from political influence that the
previous base closure rounds? What impact will environmental pollution
have in determining which bases are targeted for closure?
Answer. Establishing an independent, bi-partisan Commission
provides the insulation from political influence. Similarly, the
requirement for both the President and Congress to vote Commission
recommendations on an ``all or nothing'' basis insures fairness in the
recommendation and approval phases. Additionally, the base realignment
and closure (BRAC) legislation recently passed by the Senate contains
two provisions to further enhance fairness: (1) to emphasize the
importance of military value over any other consideration, the Senate
version requires military value to be the primary consideration in
making recommendations for base closures and realignments; and, (2) to
require that privatization in place must be specified in the Commission
recommendation as a method of closure or realignment and that it be the
most cost effective method of implementation, if the Department would
choose this avenue to implement a base closure.
Regarding the impact of environmental pollution during a future
BRAC round, the environmental impact was one of the eight criteria used
in the previous rounds for selecting military installations for closure
and realignment. However, the Department gave priority consideration to
the first four criteria, collectively referred to as military value. By
policy, environmental costs at closing bases were not to be considered
in the cost of closure calculations. Using environmental costs as a
determining factor would lead the Department to the perverse logic of
closing only the cleanest facilities. The Department has a continuing
legal obligation for environmental restoration regardless of whether a
base is closed or realigned. DOD budgeted about $7 billion during the
1990-2001 implementation period of the four BRAC rounds for
environment. Factoring these costs, as well as the other implementation
costs for these rounds, still yields net savings during this period of
$16 billion.
______

Questions Submitted by Senator Ted Stevens

ENGAGEMENT POLICIES AND PROGRAMS

Question. Secretary Rumsfeld: The Department of Defense has
increased its engagement policies and programs throughout the world to
support the United States' interests overseas. Each of the regional
CINC execute programs to enhance cooperation and build relationships
through mutual understanding. The engagement policies are particularly
helpful in the Asia-Pacific region, which lacks a formal NATO-type
defense framework. Over the years, the Pacific engagement program has
increased the goodwill and influence of the United States and provided
important access throughout the region. What is your view of Pacific
command's engagement programs and policies?
Answer. The President's fiscal year 2002 defense budget request did
sustain key programs to support U.S. interests in the Asia-Pacific
region. In the aftermath of the September 11 attacks, my staff will
need to reevaluate all our major regional programs.

KEY PROGRAMS

Question. Does the fiscal year 2002 defense budget sustain the key
programs to support U.S. interests in the Asia-Pacific region?
Answer. The President's fiscal year 2002 defense budget request did
sustain key programs to support U.S. interests in the Asia-Pacific
region. In the aftermath of the September 11 attacks, my staff will
need to reevaluate all our major regional programs.
______

Questions Submitted by Senator Pete V. Domenici

PERCENT OF GROSS DOMESTIC PRODUCT (GDP) AS A MEASURE OF THE DEFENSE
SPENDING

Question. Some in the Defense Department have pointed out that the
Cold War average of defense spending has been 5 percent of the Gross
Domestic Product; it is now at 3 percent of GDP. Some urge that
defense's share of GDP be increased to 3.5 or even 4 percent.
Increasing defense spending from the current 3 percent to 3.5
percent sounds modest, but it actually is a significant increase, is it
not? (Committee staff calculate a defense budget at 3.5 percent of GDP
to be about $380 billion, a $37 billion increase over the currently
proposed $343 billion.)
Answer. Increasing defense spending to 3.5 percent of GDP indeed
would be significant.
Question. In some past years, the defense budget was smaller, and
the economy was much smaller. A percent of GDP calculation would have
shown a smaller defense budget to be a higher percent of GDP. For
example, in 1941 when the economy was much weaker, defense spending was
very small, and Japan attacked Pearl Harbor, defense comprised 5.6
percent of GDP.
Moreover, the percent of GDP for defense can increase not just by
raising defense spending but also when defense spending is level and
the economy is contracting. For example, if this country goes into
recession and defense spending remains constant, the percent of GDP for
defense may increase well above 3.5 percent.
Percent of GDP is a strange measure of defense spending. It can
show increases when defense spending is stagnant or even shrinking.
Conversely, it can show decreases when defense spending is increasing.
What are your views on the use of share of GDP as a measure of
defense spending? Why do some in DOD use it?
Answer. The use of share of GDP is a good, not perfect measure of
defense spending. It is useful because it takes factors out of
inflation and it takes into account the size of the U.S. economy as
measured by GDP.

CONSEQUENCES OF NOT SUPPORTING BUDGET AMENDMENT

Question. Chairman Conrad (and Senator Levin [Chairman of Armed
Services]) have made it clear they may not agree to increase the 2002
defense budget by the additional $18.4 billion the President has
requested. They explain that this additional spending could mean a
``raid'' on the Medicare ``surplus'' and perhaps also the Social
Security ``surplus.''
If the Chairman of the Budget Committee refuses to release the
Reserve Fund in the Budget Resolution to accommodate the President's
2002 budget amendment and if the Senate refuses to approve the
additional spending by the 60 votes that would be needed to overcome
that decision by Chairman Conrad, what would be the consequences?
Answer. Failure to fully fund the President's fiscal year 2002
request would devastate military force readiness and seriously hamper
our ability to counter terrorism and other 21st century threats.
Question. Where would the Defense Department make the necessary
reductions, if it were given a choice?
Answer. I do not know where we would make reductions without real
damage. I expect I would urge the President to request supplemental
fiscal year 2002 appropriations, given the urgency of moving decisively
against global terrorism.
Question. What would be the consequences for your ``Strategic
Review?'' Readiness and training?
Answer. The consequences would be widespread and deep damage to our
strategy and readiness to focus more effectively on 21st century
threats like terrorism.
Question. The ability to support ongoing deployments such as in the
Balkans? the Persian Gulf? the Middle East?
Answer. The consequences would be severe.
Question. The financial management reform that the Chairman of the
Appropriations Committee, Senator Byrd, has urged?
Answer. We would continue full speed ahead with financial
management reform, since that does not depend heavily on current year
funding.

DEFENSE HEALTH PLAN COST GROWTH

Question. Since 1994, DOD budget requests have underfunded the
Defense Health Program. For example, in 2000, Congress was forced to
add $1.3 billion to pay actual Defense Health Program costs. In the
2001 Supplemental, DOD requested an additional $1.4 billion to pay
actual costs; the House increased that amount to $1.6 billion; the
Senate increased it to $1.5 billion.
For the 2002 budget, DOD requested an additional $3.9 billion to
pay new benefits to military retirees added by Congress (CBO had
estimated the cost of these benefits at just $1.7 billion, [DOD
anticipates a higher participation rate]). DOD also added another $2.6
billion to pay for what are anticipated to be actual costs.
The 2002 budget resolution assumed an additional $1.4 billion for
the Defense Health Program in 2001, the full $3.9 billion estimated by
DOD to pay new benefits for military retirees legislated by Congress,
and up to an additional $3.1 billion for full Defense Health Program
costs, all in 2002.
The total Defense Health Program is currently estimated at $17.9
billion in the Operations and Maintenance budget for 2002. This amount
does not include the salaries of Defense Health Program personnel,
which approximates an additional $5 billion in the Military Personnel
budget.
Question. Why are the Defense Health Programs accelerating as fast
as they are?
Answer. The fiscal year 2002 Defense Health Program (DHP)
President's Budget was submitted at $17.6 billion for Operations and
Maintenance funding which represents a $5.9 billion increase over
fiscal year 2001. Congress provided a new TRICARE for Life benefit that
represents $4.1 billion of the increase. The bulk of the remaining
increase is explained by the 15 percent growth in the pharmacy budget
and an increase in the cost of purchasing health care from the civilian
sector.
Question. What additional Defense Health Program cost growth do you
anticipate in the future?
Answer. In the future, the DHP is likely to see upward cost growth
pressure in several areas. It seems unlikely that the cost of pharmacy
supplies will decrease below double-digit growth rates over the next
five years. Nor does it seem likely that the cost of purchased health
care will decrease much below current rates of growth, which are in the
range of 12 percent, over the same period of time.
As the government focuses upon Homeland Defense and asymmetric
warfare threats, the Department will need to review our current budgets
for equipment, training, and facilities to effectively counter
chemical/biological and similar threats. The DHP maintains about 80
hospitals and hundreds of clinics worldwide. The cost to harden and
secure these facilities to acceptable standards will be high.
Question. What cost growth containment are you considering?
Answer. The DHP is striving to evaluate performance through the use
of relevant, reliable metrics. This process should lead to decisions at
all levels that emphasize economic efficiencies. The DHP will continue
to achieve efficiencies in the cost of providing heath care through
improved contracting practices to procure supplies and equipment and
through improved contract vehicles to procure purchased health care.
There will be a strategic review of the DHP's MILCON plan to ensure it
is consistent with the Department's policy and reflects the most
appropriate use of these resources. The DHP will continue to insist
that Information Management and Information Technology (IM/IT)
procurements are cost effective and utilize commercially available
software where appropriate. We are currently developing and testing
several new programs to distribute resources more effectively. The
Department is currently implementing Activity Based Costing (ABC) that
will enable the TRICARE Management Activity to carefully review DHP
costs and tie obligations to performance. We are also testing a plan to
better utilize our Military Treatment Facility resources within
geographic regions through a program to empower them to optimize
resources across the region. In cooperation with the Defense Financing
and Accounting Service, the DHP is working to improve the efficiency of
its financial systems. Controlling the growth in health care cost
growth is a high priority of the DHP.
______

Questions Submitted by Senator Christopher S. Bond

C-17

Question. The need for additional strategic airlift assets has been
widely discussed and reinforced with the MRS-05 study (Mobility
Requirements Study completed late 2000 showing we need additional
airlift). The current budget proposal does not include a request for a
follow-on multi-year procurement program or funding for advance
procurement for a new multi-year acquisition program for the C-17. It
has been reported that by establishing such a follow-on multi-year
program for the current production run which ends this year we can save
in the neighborhood of $20 million per aircraft. If we establish a new
MYP and purchase another 60 aircraft, which we can certainly justify in
terms of stated requirements, we will realize a savings to the taxpayer
of $1.2 billion!
If we're to fund the future defense force in a fiscally tight
environment wouldn't it seem prudent to fund advance procurement for
the C-17 for fiscal year 2002 and establish a Multi-Year Procurement
for the C-17?
Answer. The Air Force supports the fiscal year 2003 C-17 follow-on
multi-year procurement (MYP) program and the Commercial Application of
Military Airlift Aircraft (CAMAA) program. The Air Force acknowledges
that this was not evident in our recent budget submission, however, the
Air Force just received Department of Defense (DOD) support for these
programs.
We support the intention of the language written by both the House
Armed Services Committee (HASC) and the Senate Armed Services Committee
(SASC). We will continue to support the committees through conference
as they draft the final authorization bill language. In addition, the
Air Force has provided draft language to HASC, SASC, Senate
Appropriations Committee (SAC), and House Appropriations Committee
(HAC) for review and potential inclusion into the fiscal year 2002
Defense Acts. This potential language will enable the Air Force to
pursue a fiscal year 2003 MYP and CAMAA.

GUARD AND RESERVES

Question. What criteria or protocols are exercised in determining
the value and relevance of Guard and Reserve structure that enable that
structure to be factored into the National Military Strategy?
Answer. The Defense Quadrennial Review Study directed the
Department to undertake a comprehensive review of Active and Reserve
mix, organization, priority missions, and associated resources. It
indicated that the review would build on recent assessments of Reserve
component issues that highlighted emerging roles for the Reserve
components in the defense of the United States, in smaller
contingencies, and in major combat operations.
The review will commence immediately and will identify a range of
innovative options concerning active and reserve force mix. An interim
report will be completed by 1 March 2002. The final report will be
completed by May 2002.
Question. Recent developments indicate severe fiscal constraints
for defense spending. To what extent has the lack of resources for
defense competed with strategy-based decision making in determining the
size and shape of our military forces and, significantly, the roles and
missions for the National Guard and Reserve?
Answer. The lack of resources drives many of the decisions with
regard to priority, resourcing, force structure types, and basing. The
roles and missions of the Guard and Reserve are considered right along
with the active component. The Military construction (MILCON) and Real
Property Maintenance accounts have been bill payers for other DOD
priorities for many years. However, for the first time in over two
decades, the President's fiscal year 2002 Reserve component MILCON
request begins to buy back that deficit by addressing three basic
basing elements. First is the reduction of approximately 20 percent of
the infrastructure through the Efficient Facilities Initiative. Next is
to focus the resources on a 67 year plant replacement cycle, and to fix
those facilities in a C-3 and C-4 (less than minimum) facilities
readiness status. This approach is considered to be a good first step,
one that when coupled with other aspects of funding is positioned to
affect the quality of life, recruitment and retention of the force.
Question. What is your long-term view of the role of the Guard and
Reserve in war-fighting plans and how would the Guard and Reserve be
included in the process?
Answer. The Guard and Reserve have demonstrated their capability to
contribute to virtually every scenario in the war-fight. Every CINC has
plans to employ Reserve components over a wide range of requirements.
Six of the eight Army National Guard Divisions are part of the new
Joint Strategic Capabilities Plan. These divisions will be considered
in war planning conducted by the CINC's staff. The current Air Bridge
could not function without the Guard and Reserve, nor could the
increased security demands be filled without their presence. The Guard
and Reserve will continue to be an integral part of any plan or
execution for the foreseeable future.

B-1 PROGRAM

Question. The decision to remove the B-1 program from the Guard and
use the alleged savings to modernize the B-1 program in the active
component is a process by which the Guard structure is being sacrificed
to modernize active component equipment. Are we likely to see this
process continue as we attempt to modernize equipment across the board?
Answer. No. The decision to reduce the Air National Guard force
structure is not based on credibility or lack thereof of the reserve
component. The decision is based on a requirement to maintain the B-1
as viable, survivable and lethal throughout the next decade. Our
studies have indicated that 60 fully capable B-1s, in synergy with the
remaining bomber fleet, will meet the nation's global security
requirements we foresee today. Consolidation savings were generated by
reducing duplicative small scale operations and in this case, two of
the three units were Air National Guard. It is still an important Air
Force priority to capture the superb experience, capability and service
the Air National Guard men and women bring to the Air Force combat
mission.
______

Questions Submitted by Senator Kay Bailey Hutchison

PAC-3 TECHNOLOGY FOR SM-5

Question. One method potentially worth examining concerning missile
defense is integrating the proven seeker technology from the Patriot
PAC-3 into the SM-5 STANDARD missile. Such an approach may both
expedite fielding of the Navy's area-wide defense system, and reduce
the expense of what may be an otherwise redundant development effort.
Will you ask the Navy to explore this idea?
Answer. We are committed to exploring every potential avenue for
accelerating the delivery of a Navy Area Theater Ballistic Missile
Defense capability to the field. The Ballistic Missile Defense
Organization and the Navy are exploring the integration of PAC-3 seeker
technology onto the standard missile. Integration of PAC-3 technology
may be feasible and ongoing analysis is focused on identifying and
quantifying in terms of cost, schedule and performance, the merit of
adopting such an approach.
The SM-5 missile is a Navy science and technology initiative for an
advanced interceptor optimized for Land Attack Cruise Missile Defense
and Offensive Counter Air missions. Working with the Army for the past
several years, the SM-5 technology demonstration team has already used
applicable PAC-3 technology. SM-5 expands the PAC-3 seeker design
concept with advanced signal processing to counter future stressing
threats and incorporated a pre-terminal semiactive capability to
improve long-range accuracy. Funding for this initiative is expected to
be an in-core element of the Navy PR03 budget, to include a live-fire
demonstration in fiscal year 2005; however, no program of record for
SM-5 engineering, manufacture, and design or fielding exists at
present.

SPECTRUM MANAGEMENT

Question. Last week you and General Shelton sent a letter to the
Congress regarding third generation wireless communications. In that
letter you indicated that if the Department were to be forced to
relocate from the Federal Government band of 1755-1850 MHz, such an
action would have serious consequences on our National security and
increase the risk to our military personnel. How is this so?
Answer. The letter sent to Congress indicated that if DOD were
forced to relocate from the Federal band of 1755-1850 MHz prematurely,
without a number of conditions being satisfied such as DOD relocation
timelines, such action would have serious consequences to our National
security and increase the risk to our military personnel. The
conditions that must be met are provision of comparable alternate
spectrum for systems to migrate to, timely cost reimbursement to pay
for the relocation, and protection of existing DOD operations
throughout any transitional period to avoid harmful interference
between DOD systems and third generation (3G) systems. Initial studies
by the DOD indicate that adequate comparable government spectrum may
not be available.
The consequences of not satisfying the proposed conditions will be
a degradation in DOD's ability to conduct missions associated with
critical military systems that currently use this band. This mission
degradation will result from unacceptable operational restrictions
resulting from interference to and from 3G systems. The DOD systems
currently requiring the use of this band provide a range of
capabilities from the control of airborne precision strike munitions to
tactical radio communications networks used by the Army and Marine
Corps, to air combat training systems used to prepare U.S. fighter
pilots to execute and survive missions over hostile territory, to space
systems that provide communications, navigation, intelligence and
weather support to U.S. forces. Without these systems, military
personnel will face increased vulnerabilities in hostile situations,
and the military options available to our nation's leaders will be
substantially limited, causing a serious impact to National security.
Question. Why can't DOD migrate from this band prior to the next
decade?
Answer. Many of the DOD major terrestrial systems that use the
1755-1850 MHz band are combat related. There are no commercial off-the-
shelf (COTS) systems available to replace these systems. The DOD
process of modifying or replacing current systems would involve the
steps of requirements validation, establishing acquisition programs,
budgeting funds, executing contracts, system design, testing the new
systems, training personnel, and fielding new systems. Completing this
process simultaneously for multiple major terrestrial systems operating
in the band would be difficult to accomplish even by the 2010 date
specified by DOD for non-space systems. Additionally, for space
systems, the timeline of at least 2017 is based on the life expectancy
of most satellite systems currently in space or about to be launched.
Operational spacecraft cannot be modified on-orbit and must be allowed
to continue operations to satisfy a variety of DOD missions that
provide communications, navigation, meteorological data, surveillance
and intelligence. Abandoning the use of operational spacecraft and
their associated ground support infrastructure would cause serious loss
of DOD capability that would jeopardize National security and the
welfare of DOD personnel and destroy our ability to wage the war
against terrorism.

AIR FORCE PILOT TRAINING REQUIREMENTS

Question. The following statement is an excerpt from the Secretary
of Defense's justification for closing Reese Air Force base in Texas:
``The Air Force has more undergraduate flying training bases than
necessary to support Air Force pilot training requirements.'' That is
now an ironic statement considering that the Air Force is 1,200 pilots
short even though its undergraduate flight training infrastructure is
maxed-out.
Isn't this illustrative of how difficult it is to accurately
forecast military requirements even in just a few years into the
future?
Answer. It is difficult to accurately forecast military
requirements, and forecasting pilot requirements is no exception. Reese
AFB, Texas, and Williams AFB, Arizona, were closed for two principal
reasons. First, it was thought that the Air Force could reduce its
forces since the threat had diminished (e.g., dissolution of the USSR,
reduction of Iraq's military). With fewer operational forces--for
instance, active operational fighter and bomber aircraft have been
reduced by over half in the past 10 years--the requirement for pilots
and associated training was reduced. Second, Congressional legislation
directed Joint undergraduate flying training where practical. The
result of the legislation is the Joint Primary Aircraft Trainer System
(JPATS). This comprehensive training package, in the process of being
fielded, includes the T-6 Texan II, simulators and associated ground
based training devices, scheduling software, academic courseware, and
contractor logistic support. The JPATS system will replace the Air
Force T-37B and the Navy T-34C. Additionally, the Air Force is
currently fielding the T-38C, an enhanced aircraft with up-to-date
avionics to be used for teaching advanced flying training and fighter
fundamentals to our future pilots.
In the mid 1990's it became apparent that reduced retention, due to
the high demand from the airline industry for pilots, and the higher
than anticipated operational tempo (fivefold higher in the late 1990's
than in the late 1980's), were putting a strain on our reduced forces.
When combined with reduced pilot production, it became clear that an
increase in pilot production was needed. Chief of Staff of the Air
Force (CSAF) set the goal of 1,100 for annual pilot production. While
the Air Force is able to meet the 1,100 pilot training annual
requirement with its present infrastructure (T-37, T-1, T-38 aircraft
and dedicated training bases), the standup of Moody AFB, GA as a
training base will give us even more capability. Moody AFB will be the
first Air Force base to utilize the JPATS methodology for training
pilots. Moody AFB will specialize in JPATS training for the T-6
introductory trainer, while also utilizing the T-38C for training our
pilots in fighter fundamentals. This differs from our other pilot
training bases that have a more comprehensive training mission of
introductory (T-6), advanced (T-1 and T-38), and fighter fundamentals
(T-38C). Moody AFB gives us the capacity to produce even more pilots by
surging without overstressing our established flight training
infrastructure.

FUNDING

Question. A number of articles have appeared which assert that two
Army Divisions, two Carrier Battle Groups and two Air Force Wings may
be cut. How can this committee appropriate funds with and confidence
that the programs we are funding will survive the QDR process?
Answer. The 2001 QDR was released on October 1, 2001, and so the
committee can review it before appropriating funds.
reprogramming request
Question. Should we expect to see a massive reprogramming request?
Answer. No. The QDR's impact on the fiscal year 2002 budget will
not be so great as to require a massive reprogramming request.
______

Questions Submitted to General Henry H. Shelton

Questions Submitted by Senator Kay Bailey Hutchison

SURVIVOR BENEFIT PLAN

Question. I appreciate your strong support for legislation I
introduced in June which would allow DOD to posthumously retire those
service members who die in the line of duty. As you said in your
letter, imminent deaths are the ultimate disability. Our military
families should not be penalized because a loved one was not yet vested
in the military retirement system. This is the only system that
requires a person to serve at least twenty years before they are
vested. Our Bill would allow the Departments to consider those who have
made the ultimate sacrifice to our country to fully vest upon death.
Do the Services share your support for this legislation? Are they
able to find their share (approx. 2 million) per year to solve this
inequity?
Answer. The Services support providing Survivor Benefit Plan
annuities to families of Service members who die on active duty.
Legislation that would alleviate the inequities between the benefits
provided to survivors of active duty members who die instantly, and
those who die after being disability retired, is the right thing to do.
OSD, the Joint Staff, and the Military Departments have been
considering a legislative initiative to accomplish these objectives as
part of the fiscal year 2003 Unified Legislation and Budgeting process.
However, the specific elements of the proposal being developed have not
yet been agreed upon, nor specific language adopted.
Finally, the funding associated with such a proposal is not
included in the Military Department budgets. One of the Services' major
concerns, as well as mine, is adding an increase to the Services'
budgets without identifying a source for the necessary funding.
environmental impacts limiting testing and training
Question. Members of the subcommittee have become increasingly
aware of the growing impact environmental concerns have on our
Services' ability to thoroughly and realistically train its forces.
Would you please describe those impacts and your recommendations on
remedying the situation?
Answer. This is a critical training readiness issue. Historically,
specific encroachment issues have been addressed at individual ranges,
most often on an ad hoc basis. We have won some of these battles, and
lost others, but in the aggregate we are losing ground, sometimes
literally. The myriad forms of encroachment our ranges face threaten to
complicate and in some cases severely restrict our ability to conduct
critical training. The overall trends are adverse, because the number
of external pressures is increasing, and the readiness impacts are
growing. Future testing and training needs will only further exacerbate
these issues, as the speed and range of test articles and the number of
training scenarios increase in response to the need to match real-world
situations that our forces will face when deployed. This is why we must
begin to address these issues in a much more comprehensive and
systematic fashion. It will also be important to work with regulators,
special interests, other federal agencies, and communities in order to
clearly define the issues from all viewpoints and to reach mutually
acceptable solutions, whenever possible.
The Senior Readiness Oversight Council (SROC) determined that DOD
needs a comprehensive and coordinated approach to address range
sustainability with an emphasis on: (1) Endangered Species Act, (2)
unexploded ordnance (UXO), (3) frequency spectrum encroachment, (4)
maritime sustainability, (5) national airspace system, (6) air quality,
(7) airborne noise, (8) urban growth, and (9) outreach. The DOD
strategy for range sustainment will include a comprehensive
sustainability framework that addresses the test and training mission,
regulatory requirements, community support, and the range capabilities
used to support the mission. Currently, the Sustainable Range Working
Group (SRWG) is coordinating efforts to finalize a DOD sustainability
directive that will lay the foundation for this comprehensive strategy.

RESOURCE SHORTFALL

Question. When this subcommittee received the testimony of the
CINC's, they expressed concern over a lack of preferred munitions for
training and operations.
How does this resource shortfall affect the readiness of our Armed
Forces?
Answer. The lack of preferred munitions for training and operations
has been highlighted as a CINC concern in the Joint Monthly Readiness
Review process and reported by the Department in the Quarterly
Readiness Report to Congress. Although the shortfall of preferred
munitions is a concern, current inventories are fully adequate to
support a Major Theater War (MTW) scenario. Other less accurate
munitions may need to be used should a second MTW arise concurrently,
and the use of these substitute munitions would increase the risk of
meeting operational timelines and objectives in the second war. To
address these concerns, funding for preferred munitions was increased
in the President's fiscal year 2002 budget.

CONCLUSION OF HEARINGS

Senator Inouye. This concludes our scheduled hearings for
the year, and I want to thank the members of the committee for
their participation. This subcommittee will stand in recess
subject to the call of the chair. Thank you very much.
[Whereupon, at 12:45 p.m., Wednesday, September 5, the
hearings were concluded, and the subcommittee was recessed, to
reconvene subject to the call of the Chair.]

LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

----------
Page
Achgill, Dennis, American Society of Mechanical Engineers
International.................................................. 800
Prepared statement........................................... 801
Atkins, Richard N., M.D., National Prostate Cancer Coalition..... 725

Bacon, James L., Program Manager for Chemical Demilitarization
Program, Department of Defense................................. 443
Questions submitted to....................................... 481
Barnes, Joe, Director of Legislative Programs, Fleet Reserve
Association.................................................... 772
Prepared statement........................................... 773
Bester, Brigadier General William T., Chief, Army Nurse Corps,
U.S. Army, Defense Health Programs, Department of Defense...... 255
Prepared statement........................................... 268
Questions submitted to....................................... 337
Blair, Admiral Dennis C., U.S. Navy, Commander in Chief, U.S.
Pacific Command, Department of Defense......................... 399
Prepared statement........................................... 403
Bond, Hon. Christopher S., U.S. Senator from Missouri:
Prepared statement........................................... 648
Questions submitted by....667, 673, 678, 682, 686, 1004, 1009, 1084
Statements of.............................................962, 1026
Boudjouk, Philip, Ph.D., Chairman, Coalition of EPSCoR States.... 763
Prepared statement........................................... 765
Brannon, Brigadier General Barbara C., Director of Nursing
Services, Office of the Surgeon General, U.S. Air Force,
Defense Health Programs, Department of Defense................. 255
Prepared statement........................................... 263
Questions submitted to....................................... 342
Burke, Donald, M.D., Chairman, Legislative Task Force, American
Society of Tropical Medicine and Hygiene....................... 752
Prepared statement........................................... 752
Bursell, Sven, M.D., Joslin Diabetes Center...................... 717
Prepared statement........................................... 718
Byrd, Hon. Robert C., U.S. Senator from West Virginia, questions
submitted by.................................................298, 689

Carlton, Lieutenant General Paul K., Surgeon General, U.S. Air
Force, Defense Health Programs, Department of Defense.......... 1
Prepared statement........................................... 220
Questions submitted to....................................... 320
Clark, Vernon E., Chief of Naval Operations, U.S. Navy,
Department of the Navy, Department of Defense.................. 966
Prepared statement........................................... 968
Questions submitted to....................................... 1002
Coalition of Oklahoma Institutions of Higher Education Center for
Aircraft and Systems/Supporting Infrastructure, prepared
statement...................................................... 857
Cochran, Hon. Thad, U.S. Senator from Mississippi:
Prepared statement........................................... 401
Questions submitted by...............................481, 907, 1009
Statements of........................................869, 961, 1024
Craig, Hon. Larry E., U.S. Senator from Idaho, prepared
statements...................................................884, 962
Cunnion, Stephen O., M.D., Captain, U.S. Navy [retired],
Glaxosmithkline................................................ 850
Prepared statement........................................... 851

Davis, General Russell C., U.S. Air Force, Chief, National Guard
Bureau, Department of Defense.................................. 567
Prepared statement........................................... 573
Questions submitted to....................................... 682
Dean, Chief Master Sergeant Richard M., U.S. Air Force [retired],
Legislative Assistant, Air Force Sergeants Association......... 710
prepared statement........................................... 711
Domenici, Hon. Pete V., U.S. Senator from New Mexico:
Prepared statement........................................... 5
Questions submitted by....................................908, 1082
Statements of...............................................4, 1022
Duggan, Dennis Michael, Deputy Director, National Security-
Foreign Relations Division, The American Legion................ 819
Prepared statement........................................... 820
Durbin, Hon. Richard J., U.S. Senator from Illinois, questions
submitted by................................................699, 1074

England, Hon. Gordon R., Secretary of the Navy, Department of the
Navy, Department of Defense.................................... 959
Biographical sketch.......................................... 966
Prepared statement........................................... 964
Questions submitted to....................................... 999
Statement of................................................. 963

Feinstein, Hon. Dianne, U.S. Senator from California:
Questions submitted by....................................888, 1079
Statements of.............................................870, 1025
Florida State University, prepared statement..................... 859
Foil, Martin B., Jr., National Brain Injury Research, Treatment
and Training Foundation........................................ 732
Prepared statement........................................... 734

Goldberg, Joan, Executive Director, American Society for Bone and
Mineral Research on behalf of the National Coalition for
Osteoporosis and Related Bone Diseases......................... 768
Prepared statement........................................... 770
Grimes, Harold G., Sr., National Commander, Uniformed Services
Disabled Retirees.............................................. 741
Prepared statement........................................... 743

Hanson, Marshall, Director of Legislation, Naval Reserve
Association.................................................... 842
Prepared statement........................................... 843
Harkin, Hon. Tom, U.S. Senator from Iowa, questions submitted by. 943,
953, 1071
Harnage, Bobby L., Sr., National President, American Federation
of Government Employees, AFL-CIO............................... 803
Prepared statement........................................... 804
Henderson, James Eli, Associate Commissioner, Calhoun County,
Alabama........................................................ 501
Prepared statement........................................... 504
Henderson, Rogene F., Ph.D., Lovelace Respiratory Research
Institute...................................................... 730
Prepared statement........................................... 731
Hendrix, Mary J.C., Ph.D., President, Federation of American
Societies for Experimental Biology............................. 701
Prepared statement........................................... 703
Herriot, James W., Ph.D., Vice President, Bios Group,
Incorporated................................................... 816
Prepared statement........................................... 818
Hershkowitz, Louise E., CRNA, American Association of Nurse
Anesthetists................................................... 743
Prepared statement........................................... 745
Hinestrosa, Maria Carolina, Board Member, National Breast Cancer
Coalition...................................................... 779
Prepared statement........................................... 781
Hollings, Hon. Ernest F., U.S. Senator from South Carolina:
Questions submitted by................................296, 318, 332
Statement of................................................. 1022
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas:
Questions submitted by....................................... 290,
312, 325, 667, 901, 946, 954, 1001, 1006, 1011, 1085, 1087
Statements of...............................................4, 1028

Inouye, Hon. Daniel K., U.S. Senator from Hawaii:
Opening statements of...........................867, 911, 959, 1015
Prepared statements..........................................3, 255
Questions submitted by....................................... 329,
337, 340, 342, 396, 442, 475, 904, 949, 999, 1002, 1007
Statements of.................................2, 346, 400, 446, 534

Jones, General James L., Commandant of the Marine Corps, U.S.
Marine Corps, Department of the Navy, Department of Defense.... 971
Prepared statement........................................... 975
Questions submitted to....................................... 1007
Juvenile Diabetes Research Foundation International, prepared
statement...................................................... 865

Kinney, Rufus, on behalf of Families Concerned About Nerve Gas
Incineration, Anniston, Alabama................................ 511
Prepared statement........................................... 514
Knapp, Deirdre J., Ph.D., American Psychological Association..... 707
Prepared statement........................................... 708
Ko, Harvey, Ph.D., Coalition for National Security Research...... 737
Prepared statement........................................... 739
Kohl, Hon. Herb, U.S. Senator from Wisconsin:
Questions submitted by....................................... 1080
Statement of................................................. 1024
Kulungowski, Meg, Senior Issues Specialist, National Military
Family Association............................................. 755
Prepared statement........................................... 756

Lautenbacher, Conrad C., Jr., Vice Admiral, U.S. Navy [retired],
President, Consortium for Oceanographic Research and Education. 797
Prepared statement........................................... 798
Leahy, Hon. Patrick J., U.S. Senator from Vermont:
Questions submitted by...........................299, 695, 698, 906
Statement of................................................. 1018
Lindell, Brenda, on behalf of Families Concerned About Nerve Gas
Incineration, Anniston, Alabama................................ 508
Prepared statement........................................... 510
Lord, Commander Mike, U.S. Navy [retired], co-chair, The Military
Coalition Health Care Committee................................ 826
Prepared statement........................................... 827

Martin, Rear Admiral Kathleen L., Director, Navy Nurse Corps,
U.S. Navy, Defense Health Programs, Department of Defense...... 255
Prepared statement........................................... 259
Questions submitted to....................................... 340
McCarthy, Major General Dennis M., Director, Reserve Affairs
Division, U.S. Marine Corps Reserve, Department of the Navy,
Department of Defense.......................................... 541
Prepared statement........................................... 543
Questions submitted to....................................... 673
McConnell, Hon. Mitch, U.S. Senator from Kentucky, statement of.. 444
Mix, Robert R., Executive Director of Government Affairs,
Noncommissioned Officers Association on behalf of the National
Military and Veterans Alliance................................. 834
Prepared statement........................................... 836
Morris, Robert V., Executive Director, Fort Des Moines Memorial
Park and Education Center...................................... 815
Prepared statement........................................... 816
Nelson, Vice Admiral Richard A., Surgeon General, Medical Corps,
U.S. Navy, Defense Health Programs, Department of Defense...... 1
Prepared statement........................................... 210
Questions submitted to....................................... 301
Nelson, William G., Ph.D., Association for the Cure of Cancer of
the Pros-
tate........................................................... 725
Prepared statement........................................... 727
Northwestern University, prepared statement...................... 862

Olanoff, Chief Master Sergeant Mark H., U.S. Air Force [retired],
National Legislative Director, The Retired Enlisted Association 722
Prepared statement........................................... 723

Parker, Michael, Program Manager for Assembled Chemical Weapons,
Chemical Demilitarization Program, Department of Defense....... 443
Prepared statement........................................... 456
Questions submitted to....................................... 485
Partridge, Colonel Charles C., U.S. Army [retired], National
Association for Uniformed Services............................. 839
Prepared statement........................................... 840
Peake, Lieutenant General James B., Surgeon General, U.S. Army,
Defense Health Programs, Department of Defense................. 1
Prepared statement........................................... 231
Questions submitted to....................................... 279
Pearce, Eli, Ph.D., President-elect, American Chemical Society... 785
Prepared statement........................................... 786
Peccei, Roberto, Ph.D., Vice Chancellor for Research, UCLA, on
behalf of Association of American Universities................. 813
Prepared statement........................................... 814
Plewes, Major General Thomas J., Chief, Army Reserve and
Commanding General, United States of America Reserve Command,
Department of the Army, Department of Defense.................. 523
Prepared statement........................................... 525
Questions submitted to....................................... 663

Ralston, General Joseph W., Commander-in-Chief, United States
European Command, North Atlantic Treaty Organization Issues,
Department of Defense.......................................... 345
Opening remarks of........................................... 347
Prepared statement........................................... 356
Regan, Lt. Col. Kevin, U.S. Marine Corps Reserve on behalf of the
Ovarian Cancer National Alliance, prepared statement........... 864
Reid, Hon. Harry, U.S. Senator from Nevada:
Prepared statement........................................... 1029
Questions submitted to....................................... 1076
Roche, Hon. James G., Secretary, Department of the Air Force,
Department of Defense.......................................... 867
Biographical sketch.......................................... 874
Prepared statement........................................... 872
Questions submitted to....................................... 888
Rumsfeld, Hon. Donald H., Secretary of Defense, Office of the
Secretary of Defense, Department of Defense.................... 1015
Prepared statement........................................... 1036
Questions submitted to....................................... 1071
Ryan, General Michael E., Chief of Staff, Department of the Air
Force, Department of Defense................................... 867
Prepared statement........................................... 872
Questions submitted to....................................... 904

Salter, Russell, Director, Chemical and Radiological Preparedness
Division, Federal Emergency Management Agency.................. 487
Prepared statement........................................... 489
Schultz, Major General Roger C., Director, Army National Guard,
Department of the Army, Department of Defense.................. 585
Prepared statement........................................... 585
Questions submitted to....................................... 694
Shelby, Hon. Richard C., U.S. Senator from Alabama:
Prepared statement........................................... 1021
Questions submitted by......................311, 325, 473, 483, 485
Statements of........................................401, 444, 1020
Shelton, General Henry H., USA, Chairman, Joint Chiefs of Staff,
Department of Defense.......................................... 1041
Prepared statement........................................... 1046
Questions submitted to....................................... 1087
Tribute to................................................... 1030
Sherrard, Major General James E., III, Chief, Air Force Reserve
and Commander, United States Air Force Reserve Command,
Department of the Air Force, Department of Defense............. 548
Prepared statement........................................... 550
Questions submitted to....................................... 678
Shinseki, General Eric K., Chief of Staff, United States Army,
Department of the Army, Department of Defense.................. 911
Opening remarks.............................................. 913
Prepared statement........................................... 915
Questions submitted to....................................... 949
Specter, Hon. Arlen, U.S. Senator from Pennsylvania:
Questions submitted by..........................482, 485, 945, 1000
Statement of................................................. 1027
Spiegel, Jayson L., Executive Director, Reserve Officers
Association of the United States............................... 787
Prepared statement........................................... 789
Stevens, Hon. Ted, U.S. Senator from Alaska:
Opening statements of....................1, 345, 399, 443, 523, 701
Questions submitted by....................................... 279,
301, 320, 437, 663, 671, 673, 678, 682, 694, 696, 1082
Statements of...................................868, 913, 960, 1017

Taylor, Robert, M.D., Ph.D., co-chair, Government Affairs and
Advocacy Committee, Research Society on Alcoholism............. 749
Prepared statement........................................... 750
Totushek, Rear Admiral John B., Chief, Naval Reserve and
Commander, U.S. Naval Reserve Force, Department of the Navy,
Department of De-
fense.......................................................... 534
Prepared statement........................................... 537
Questions submitted to....................................... 671

University of Medicine and Dentistry of New Jersey, prepared
statement...................................................... 860
University of Miami, prepared statement.......................... 853

Violi, Ron, Joslin Diabetes Center............................... 717

Weaver, Major General Paul A., Jr., Director, Air National Guard,
Department of the Air Force, Department of Defense............. 622
Prepared statement,.......................................... 625
Questions submitted to,...................................... 696
Westphal, Hon. Joseph, Acting Secretary of the Army, Chemical
Demilitarization Program, Department of Defense................ 443
Opening statement by......................................... 447
Prepared statement........................................... 449
Questions submitted to....................................... 473
White, Thomas E., Secretary of the Army, Department of the Army,
Department of Defense.......................................... 911
Opening remarks.............................................. 912
Prepared statement........................................... 915
Questions submitted to....................................... 943
Williams, Craig, Director, Chemical Weapons Working Group........ 495
Prepared statement........................................... 498
Wilson, James L., Attorney, Wilson & Drexler, P.C., prepared
statement...................................................... 864
Wolff, Liesel, Legislative Assistant, People for the Ethical
Treatment of Animals........................................... 847
Prepared statement........................................... 848

Zakheim, Dr. Dov, Comptroller, Office of the Secretary of
Defense, Department of Defense................................. 1015

SUBJECT INDEX

----------

DEPARTMENT OF DEFENSE

Chemical Demilitarization Program

Page
Accomplishments and priorities................................... 451
Additional committee questions................................... 473
Alternative destruction technologies............................. 481
Alternative technologies...................462, 466, 475, 478, 484, 485
Anniston timetable............................................... 471
Assembled chemical weapons assessment (ACWA) technology.......... 485
Challenges....................................................... 455
Chemical Demilitarization Program:
Description of the........................................... 450
Managing the...............................................469, 480
Priority of the.............................................. 468
Chemical Stockpile Emergency Preparedness Program (CSEPP)........ 460
Chemical Weapons Convention commitment........................... 446
Chemical weapons disposal........................................ 459
Meeting the program schedule................................. 475
Construction costs............................................... 465
Cost savings..................................................... 482
Demilitarization costs........................................... 445
Destruction schedules and projections..........................463, 465
Destruction timelines, costs, and variables...................... 470
Emergency preparedness.........................................474, 483
Environmental and regulatory requirements, meeting and exceeding. 454
Environmental impact statements.................................. 459
Environmental Protection Agency:
Changes in regulations of the................................ 458
Regulations.................................................. 458
Facility closure issues and environmental costs, managing
unidentified................................................... 454
Johnston Atoll chemical agent disposal system (JACADS), closing.. 480
Johnston Island: Completing chemical weapons disposal............ 479
Major accomplishments............................................ 448
Major challenges................................................. 474
Management structure............................................. 473
Medical studies.................................................. 483
Mission, maintaining funding necessary to fulfill................ 455
Panelists, welcoming of.......................................... 444
Partnering with our communities.................................. 454
Program cost growth.............................................. 458
Program costs.................................................... 455
Program management structure..................................... 461
Program schedule, meeting the.................................... 482
Program status................................................... 451
Public outreach efforts.......................................... 474
Public safety..................................................461, 472
Storing chemical weapons..................................... 477
Safety........................................................... 454
Assessment................................................... 462
Schedules, completion............................................ 468
Storage, risk of continued....................................... 482
Technology approach.............................................. 451

Defense Health Programs

A healthy, fit, and medically protected force.................... 231
Additional committee questions................................... 279
American troops, health of.....................................297, 333
Applications, processing......................................... 272
Bio-chemical terrorism........................................... 329
Blood-related disease research.................................296, 332
Budget blueprint................................................. 249
Certified registered nurse anesthetists (CRNA)................... 273
Civilian health personnel recruitment.....................318, 338, 343
Compensation..................................................... 6
Defense Health Program (DHP):
Full funding of the...................................282, 304, 322
Funding shortfalls, current year......................280, 302, 320
Department of Veterans Affairs, joint initiatives with the....... 218
Direct care system............................................... 249
Equipment, transfer of unused.................................... 252
Flight nurse training............................................ 275
Global:
Expeditionary medical system................................. 219
Settlement................................................... 253
Healthcare needs................................................. 288
Hospital system.................................................. 299
Joint medical command............................................ 252
Kosovo........................................................... 246
Mail Order Pharmacy Program...................................... 218
Medical personnel.........................................293, 315, 327
Medical recruiting and retention..........................286, 308, 324
Mental health care............................................... 250
Military bonus system............................................ 262
Military healthcare facilities, access to........................ 325
Mission.......................................................... 229
Nurse anesthetists............................................... 273
Nurses:
Advanced practice in the military.....................337, 340, 343
Nursing:
Shortage...................................................257, 261
Specialty.................................................... 267
Training..................................................... 263
Optimization of care......................................339, 340, 343
Organizational reform.....................................286, 307, 323
Outcomes management project...................................... 298
Personel issues.................................................. 248
Readiness........................................................ 262
Recruiting....................................................... 261
Programs..................................................... 275
Reserve Officer Training Corps................................... 278
Shortfall......................................................243, 245
Funding...................................................... 244
Soldier and the military family, manage the health of the........ 236
Specialists, retention of........................................ 251
Stable funding................................................... 209
Supplemental..................................................... 6
Fiscal year 2000......................................279, 301, 320
Third party collections...................................295, 317, 329
Trained and equipped medical force, deploy a..................... 234
Tri-Service Nursing Research Program...........................340, 342
TRICARE:
Benefits..................................................... 217
Business practices....................................290, 312, 325
Expenditures................................................. 242
For life....................................281, 291, 303, 314, 321
Payments..................................................... 241
Recent satisfaction survey............................286, 307, 323
Uniformed Services University of Health Sciences................. 245
Venture capital.................................................. 276
For the direct care system............................283, 305, 322
War readiness skills, maintaining................................ 332

Department of the Air Force

Additional committee questions................................... 887
Aging infrastructure and physical plant recapitalization......... 873
Air Force Way (AFWAY)............................................ 907
Airborne laser................................................... 905
Program...................................................... 880
Airlift requirements of offshore States.......................... 878
Asia-Pacific region.............................................. 889
B-1.............................................................. 901
B-2.............................................................. 883
Spirit stealth bomber........................................ 905
Bombers.......................................................... 879
BRAC............................................................. 903
Issue........................................................ 904
Budget:
Fiscal year 2002............................................. 886
Information.................................................. 886
C-5.............................................................. 878
C-17............................................................. 876
Aircraft..................................................... 907
Commissaries, closure of......................................... 902
F-22...........................................................875, 904
Beddown...................................................... 885
Testing program.............................................. 876
Force structure.................................................. 908
Guard and Reserve................................................ 903
Intelligence, surveillance, and reconnaissance (ISR)............. 895
Jackson C-17 conversion.......................................... 907
Joint Strike Fighter............................................. 901
KC-135........................................................... 906
Tankers...................................................... 879
Mobility requirements study...................................... 876
Modernization.................................................... 873
Mountain Home Air Force Base..................................... 885
Multiyear procurement............................................ 877
Schedule..................................................... 877
Operation Allied Force (Kosovo) lessons of....................... 898
People........................................................... 873
Pilot training bases............................................. 881
Quality of life.................................................. 872
Issues....................................................... 899
Readiness......................................................872, 873
Recruiting....................................................... 874
Science and technology budgets................................... 908
Security environment, new........................................ 888
Strategic bombers................................................ 894
Supplemental appropriations...................................... 875
Tactical aircraft................................................ 891
Terrorism........................................................ 882
Threats and missions, new........................................ 882
Transformation and modernization................................. 900
V-22 Program..................................................... 903
Weapon system.................................................... 902
X-33 space plane................................................. 880

Department of the Army

Active component/Reserve component integration................... 924
Active duty divisions............................................ 956
Additional committee questions................................... 943
Armored security vehicle (ASV)................................... 952
Army:
Aviation..................................................... 935
Museum....................................................... 945
And Grizzly system....................................... 922
Training and manning......................................... 951
Base closure...................................................933, 947
Comanche software support........................................ 936
Conus housing privatization...................................... 946
Crusader.......................................................938, 950
Deployed troop morale, training, and readiness................... 933
Deployment duration.............................................. 928
Digitization..................................................... 954
Environmental concerns........................................... 955
Family housing................................................... 926
Force structure.................................................. 926
Funding:
Challenges................................................... 942
Deferred..................................................... 924
Grizzly.......................................................... 945
High mobility trailers and waste................................. 944
Information sharing.............................................. 956
Infrastructure, aging............................................ 957
Installation security............................................ 947
Interim Brigade combat team fielding............................. 922
Interim force.................................................... 949
Iowa Army Ammunition Plant....................................... 943
Legacy Force..................................................... 949
Modernization................................................ 925
Medium tactical vehicles (FMTV) funding, family of............... 957
National training center......................................... 931
Objective force fielding......................................... 924
155 mm light-weight howitzer..............................931, 932, 953
Overseas housing privatization................................... 946
Reserve component:
Performance.................................................. 929
Utilization.................................................. 948
Rock Island Arsenal.............................................. 944
Theater high altitude area defense (THAAD) program acceleration941, 942
Transformation................................................... 951
Army National Guard role in.................................. 928
Challenges.................................................911, 950
Models....................................................... 950
Status....................................................... 954
Unexploded ordnance.............................................. 937
Unutilized plant capacity........................................ 953
Waste, elimination of............................................ 934
Well being....................................................... 946

Department of the Navy

Additional committee questions................................... 998
Amphibious sealift............................................... 998
Amphibious ship stationing and lift..........................1003, 1008
AV-8B Harrier...........................................996, 1005, 1010
Cooperative engagement capability............................1000, 1003
DD-21..........................................................982, 990
Land attack destroyer........................................ 1002
Defense supplemental.........................................1004, 1009
EA-6B............................................................ 987
F/A-18 G.....................................................1005, 1011
F/A-18E/F...............................................994, 1004, 1010
Futenma Marine Corps Air Station................................. 996
Joint Strike Fighter.....................................983, 999, 1007
Missile defense.................................................. 991
Modernization.................................................... 978
Programs..................................................... 991
Naval forces, the context for.................................... 969
Navy surface fire support....................................1004, 1008
Our marine warrior culture....................................... 981
Pilot training................................................... 995
Prior year shipbuilding cost growth.............................. 999
Priorities and challenges........................................ 969
Readiness......................................................977, 993
Retention........................................................ 1007
Supplemental..................................................... 984
T-45.........................................................1005, 1006
T-45 TS.......................................................... 1010
Training and education........................................... 981
Training ranges.................................................. 1006
V-22....................................................985, 1000, 1008
Vieques.......................................................... 988
Vision........................................................... 975

National Guard Bureaus

Additional committee questions................................... 663
AEF rotations.................................................... 696
AFRC unfunded miscellaneous equipment list (fiscal year 2002).... 655
Aircraft upgrades................................................ 645
America Connected with........................................... 574
Army:
Aviation modernization plan.................................. 686
Guard aviation assets........................................ 694
Guard Flying Hour Program.................................... 694
National Guard:
Fiscal Year 2002 Posture Statement....................... 586
Requirements............................................. 695
Around the world, throughout our States, within our communities.. 573
Balkans tour length to the....................................... 695
C-17............................................................. 624
Aircraft at Jackson, Mississippi............................. 643
Conversion................................................... 641
C-130............................................................ 699
Civil support teams status and location of....................... 568
Communications equipment (SINCGARS radios)....................... 688
Computer attacks................................................. 647
Counterdrug mission.............................................. 691
Deployment expenses.............................................. 640
Deployments...................................................... 660
Equipment and communication...................................... 650
Executive summary................................................ 573
Expeditionary aerospace force..................................623, 637
F-16............................................................. 624
Family support................................................... 625
First and emergency responder training........................... 693
Force:
Manning the.................................................. 595
Resourcing the............................................... 607
Sustaining the............................................... 604
Training the................................................. 612
Forward.......................................................... 586
Full-time:
Manning....................................................643, 686
Support...................................................... 595
Funding shortfalls............................................... 696
Guard:
And Reserve equipment........................................ 697
Equipment.................................................... 685
Equipping the................................................ 599
Military construction........................................ 685
Missioning the............................................... 590
Hart-Rudman...................................................... 689
Health insurance................................................. 644
Homeland security..............................................575, 690
Mission...................................................... 691
KC-135.........................................................624, 698
Knowledge infrastructure......................................... 608
M109A6 procurement............................................... 695
Manning requirements............................................. 643
MILCON funding................................................... 694
Military construction............................................ 688
Requirements................................................. 642
Missions difficulties in support of.............................. 683
Modernization.................................................... 623
Morale........................................................... 636
National Guard:
Counterdrug Program.......................................... 692
Force structure and equipment................................ 693
Posture statement for fiscal year 2002....................... 573
Reserve equipment account..................................682, 687
National military strategy support of our........................ 682
On guard for the 21st century.................................... 584
Operational Tempo (OPTEMPO) increased............................ 638
Operations Tempo................................................. 623
Our strategic vision............................................. 573
Pay and allowances............................................... 638
PERSTEMPO........................................................ 697
Preparing for the future......................................... 588
Quality installations............................................ 617
Quality of life.................................................. 620
Readiness........................................................ 602
And relevance................................................ 578
Real property maintenance........................................ 697
Recruiting.....................................................633, 638
Resources.................................................... 684
Reserve affairs.................................................. 662
Retention........................................................ 624
Rotation policy.................................................. 682
Strategic integration............................................ 574
Student Loan Repayment Program................................... 635
Success Organizing for........................................... 598
The Guard today.................................................. 587
Tour length policy............................................... 685
Weapons of mass destruction...................................... 567

North Atlantic Treaty Organization Issues

A changing and challenging strategic environment................. 357
Additional committee questions................................... 396
Aircraft radio security.......................................... 385
AOR responsibilities............................................. 379
Army transformation.............................................. 384
Balkan region, future stability in the........................... 389
Barracks and military family housing............................. 355
Bosnia........................................................... 350
Engagement.....................................................358, 376
Ethnic demographics.............................................. 352
EUCOM's area of responsibility................................... 347
Europe:
Force structure in........................................... 376
Stationing of U.S. forces in................................. 377
European security and defense identity........................... 396
European union defense force, creation of........................ 378
FYROM (Macedonia) unrest in,..................................... 392
FYROM/Kosovo border, NATO activities on.......................... 380
Ground safety zone............................................... 353
HIV/AIDS in Africa............................................... 390
Host nation support.............................................. 393
For U.S. military, origins of................................ 375
Intelligence and communications infrastructure................... 372
Key theater missions and challenges.............................. 361
Kosovo/FYROM border:
Conflict on.................................................. 353
Number of deployed NATO troops in............................ 381
Macedonia (FYROM):
Conflict in.................................................. 396
Escalation of fighting in.................................... 382
Supply route requirements in................................. 375
Modernization and personnel issues............................... 370
National Guard and Reserves...................................... 391
National missile defense.......................................386, 389
NATO:
Allies force structure....................................... 376
Force protection............................................. 384
Inoperability................................................ 382
Military construction (Milcon)............................... 394
Relevancy of................................................. 392
NATO/EU cooperation on defense force creation.................... 379
Non-combat education operations.................................. 377
Operation Northern Watch......................................... 349
Real property maintenance military construction, funding for..... 354
Resources........................................................ 373
Secretary's strategic review..................................... 377
Supplemental funding, need for................................... 386
Terrorist missile threat......................................... 390
Training and readiness, affect of Balkan operations on........... 388
Vehicles, use of unmanned........................................ 380
War criminals, NATO's role in the arrest of...................... 381

Office of the Secretary of Defense

ABM Treaty....................................................... 1069
Additional committee questions................................... 1071
Additional funds................................................. 1080
Air Force pilot training requirements............................ 1086
Allies, interoperability with.................................... 1058
B-1 program...................................................... 1085
Ballistic missile testing and the ABM Treaty..................... 1075
Base closure and efficient facilities initiative................. 1081
Base closures.................................................... 1052
Bizarre thinking................................................. 1019
Budget:
Amendment, consequences of not supporting.................... 1083
Priorities................................................... 1031
Request, overview of fiscal year 2002........................ 1031
C-17............................................................. 1084
Chemical demilitarization........................................ 1056
China policy, no change in....................................... 1030
Chinese military capabilities.................................... 1054
Defense:
Budget increase, source of................................... 1067
Health plan cost growth...................................... 1083
Spending, need for added..................................... 1051
DOD spending..................................................... 1063
Engagement policies and programs................................. 1082
Environmental impacts limiting testing and training.............. 1088
F-22 stealth fighter............................................. 1076
Funding.......................................................... 1087
Future strategies and base closures.............................. 1075
Gross domestic product (GDP) as a measure of the Defense
spending, percent of........................................... 1082
Guard and Reserves............................................... 1084
Contributions of............................................. 1065
Intelligence and communications transformation................... 1049
Interim brigade combat teams..................................... 1054
Iowa Army Ammunition Plant (IAAP)................................ 1071
Joint force, building tomorrow's................................. 1047
Key programs..................................................... 1082
Military health care............................................. 1081
Missile defense:
Deployment................................................... 1067
Plans........................................................ 1079
Priority..................................................... 1080
Rationale for................................................ 1062
National Missile Defense Program................................. 1079
Navy shipbuilding............................................1053, 1064
New force-sizing................................................. 1078
Nuclear testing.................................................. 1030
155 mm Howitzer Program.......................................... 1074
Operations tempo................................................. 1081
PAC-3 technology for SM-5........................................ 1085
Postponed procurement programs................................... 1052
QDR and force structure.......................................... 1070
Reductions....................................................... 1081
Reprogramming request............................................ 1087
Reserve components, modernization and the........................ 1056
Resource shortfall............................................... 1088
Rock Island Arsenal.............................................. 1074
Russia's second strike capability and missile defense............ 1075
Short-term and long-term needs................................... 1076
Sierra Army Depot................................................ 1078
So-called rogue nations.......................................... 1068
Spectrum management.............................................. 1086
Survivor benefit plan............................................ 1087
Sustaining a quality force....................................... 1046
Transformation................................................... 1048
Other issues................................................. 1049
U.S. national security, meeting threats to....................... 1073
U.S. nuclear stockpile, safety and reliability of................ 1060
Vieques.......................................................... 1076
Weapons of mass destruction...................................... 1061

Reserves

Additional committee questions................................... 663
Aerospace expeditionary force.................................... 680
Aircraft upgrades................................................ 535
An enviable force................................................ 540
Army Reserve unit readiness...................................... 668
Army Reservists additional....................................... 665
Balkans tour lengths to the...................................... 667
Equipment:
Maintenance and storage program.............................. 667
Requirements and shortfalls current.......................... 669
Expeditionary aerospace force.................................... 548
Fiscal year 2001 funding.......................................663, 678
Outlook improved............................................. 540
Fleet support priorities......................................... 536
Full-time support................................................ 533
Future roles and missions........................................ 547
Highlights of 2000............................................... 551
Information technology........................................... 536
Infrastructure................................................... 546
Legacy weapons systems.........................................542, 545
Manpower......................................................... 535
Marines and their families....................................... 543
Military construction funding current rate of.................... 666
Modernization..................................................546, 555
National Guard and Reserve equipment account...................667, 673
New missions..................................................... 556
OPTEMPO and readiness............................................ 553
Paying dividends today!.......................................... 537
People........................................................... 526
Pilot retention.................................................. 560
Readiness......................................................527, 549
Recruiting....................................................... 560
And retention.........................................526, 549, 552
Status................................................... 679
Fiscal year 2001..................................... 664
Nonprior..................................................... 560
Service people........................................... 557
Relevance........................................................ 528
Reserve forces:
Equipment.................................................... 666
Compatibility............................................ 681
Military construction underfund.............................. 666
Reserve:
MILCON....................................................... 680
Pilots....................................................... 680
Repair and construction of centers........................... 669
Reserves......................................................... 679
Overusing the................................................ 663
Resourcing....................................................... 531
Sentinel battlefield radar....................................... 563
Tax reform....................................................... 562
Terrorism........................................................ 563
Top five priorities.............................................. 538
Training......................................................... 535
War-fighting capabilities........................................ 541

U.S. Pacific Command

Additional committee questions................................... 437
Air and sealift improvements..................................... 403
All calls........................................................ 422
Army transformation.............................................. 423
Asia-Pacific Center for Security Studies......................... 420
Asia-Pacific region, developments in the......................... 403
China............................................................ 433
Military engagement with..................................... 439
East Timor....................................................... 440
Ehime Maru incident.............................................. 423
Enhanced military engagement..................................... 421
Exercise NORTHERN EDGE........................................... 442
Force structure.................................................. 439
Funding shortfalls, fiscal year 2001............................. 429
Indonesia........................................................ 427
United States activities with................................ 428
Intelligence:
Assets in the Pacific........................................ 442
Dissemination................................................ 425
Gathering.................................................... 424
International military education and training.................... 421
Korean Peninsula................................................. 441
Milcon-family housing............................................ 431
Military-to-military contacts.................................... 421
North Korea....................................................435, 441
Northern Edge funding............................................ 432
Operating challenges............................................. 437
Strategic review................................................. 437
Taiwan:
Arms sales................................................... 435
Defense...................................................... 426
Theater missile defense.......................................... 425
U.S. Pacific Command priorities.................................. 408
USPACOM military incidents....................................... 403